Key takeaways
– Trump announced a new External Revenue Service to collect tariffs
– The agency has not moved beyond the planning stage
– Commerce Secretary Howard Lutnick took charge of the project
– Forecasts showed tariff revenue could not replace income tax
– Insiders doubt the plan’s direction and future
Introduction
Shortly before taking office, the president unveiled a bold plan to reshape how the nation collects money from trade taxes. He envisioned an External Revenue Service to handle all tariffs and duties paid by foreign businesses. This new agency would collect huge sums that the administration claimed could lower debt and even fund rebates for taxpayers. However, months after the announcement, the plan has not progressed. In fact, people close to the White House say it has stalled completely. They point to leadership changes and low revenue estimates as the main roadblocks. This article explains what happened and why insiders are worried.
Trump’s Big Promise
From the start, the leader praised his global tariffs as a massive new income source. He argued that these taxes on imports would bring in more money than ever before. Moreover, he suggested that the funds could replace parts of the regular tax system. In a social media post just before his inauguration, he described the External Revenue Service as key to making this vision real. He said it would collect every cent from tariffs, duties, and other fees paid by foreign firms. The announcement gained quick attention, and many experts began to study how the agency might work. At that point, the idea still seemed bold but plausible.
A Shift in Leadership
As plans moved forward, the president tapped the Commerce Secretary to lead the new agency. He passed the project to Howard Lutnick even though a full review of its feasibility remained incomplete. Some insiders were surprised by this choice. They wondered if the Commerce Secretary had the right expertise for collecting trade revenue. Traditionally, trade policy falls under another office, but the president seemed to trust Lutnick’s vision. Once in charge, Lutnick publicly praised the idea. He even spoke about positioning himself at the center of trade policy. Yet behind closed doors, he never fully embraced the service.
Revenue Reality Check
Soon after Lutnick took over, officials began to assess how much money the agency might actually generate. The early projections looked weak. Trade experts warned that the income from tariffs would fall far short of replacing income tax. In fact, the numbers showed only a fraction of the needed revenue. After seeing these estimates, enthusiasm for the project faded. Discussions about creating a large sovereign wealth fund out of tariff income also lost steam. While the president had floated that idea in private meetings, it never left the room. As the months passed, no new reports emerged on funding or staffing for the agency.
Insider Skepticism
Within the administration, people started to question both the plan and its leadership. Some career officials expressed doubt that the Commerce Secretary could handle a major revenue service. They worried that without a clear road map, the agency would remain just an idea. One senior aide admitted surprise when the secretary took the helm. Many wondered if he really understood the complexities of collecting and auditing trade taxes. Despite public optimism from the president’s team, the mood behind the scenes grew tense. Staff turnover and shifting priorities further slowed progress.
Bureaucratic Challenges
Creating a new federal agency involves many steps. It requires legal authority, funding approvals, staffing plans, and technology systems. To move an External Revenue Service from concept to reality, the administration first needed a thorough feasibility study. That study would outline costs and benefits. It would also clarify how the new agency would coexist with existing agencies. However, that review never finished. Without it, there was no firm budget or timeline. As a result, proposals for new IT platforms, auditor training, and office space remained on hold. In short, the lack of planning documents meant the project never left the starting line.
Political Stakes
The president’s promise had a political edge. By framing tariffs as a way to reduce debt and reward taxpayers, he aimed to win support from key voter groups. He also took credit for putting American workers first in trade deals. However, critics argued that tariffs could raise consumer prices and hurt businesses that rely on imports. Many economists warned that high trade taxes might slow economic growth. As debate around the plan intensified, party infighting within the administration added to the delay. Some allies supported the new agency while others pushed back, citing legal and practical concerns.
What Comes Next
At this point, the future of the External Revenue Service is uncertain. The White House has not released any new updates or deadlines. Officials who once championed the plan have gone quiet on public forums. Meanwhile, the tariff program itself continues to generate revenue, though not at the record levels once predicted. Lawmakers on Capitol Hill have expressed varying degrees of interest in creating a dedicated agency. Some say they will only back it if a detailed plan emerges. Others have suggested folding the duties into existing structures instead. For now, the topic remains in limbo, awaiting a clear push from the administration.
Conclusion
An ambitious promise to launch an External Revenue Service has hit roadblocks at every turn. Despite early excitement, leadership changes and low revenue estimates pushed the project aside. Insiders question the choice of officer to lead it and the absence of a solid feasibility review. In the end, the plan stalled before it began, leaving many to wonder if it will ever become reality. As debates over tariffs and trade policy continue, the idea of a new revenue agency remains trapped in bureaucracy and doubt. Only time will tell if the president revives his vision or lets it fade away.