President-elect Donald Trump has announced the creation of a new government department that will require foreign governments to pay tariffs.
President Trump called the new department the “Foreign Revenue Service,” after the Internal Revenue Service, which manages federal tax payments from U.S. citizens.
“We will start charging those who profit from us in trade and they will finally start paying their fair share.”
“For too long, we have relied on using the Internal Revenue Service (IRS) to tax the greats. Through soft and pathetically weak trade agreements, the American economy has taxed itself while It has brought growth and prosperity to the world.” message on social media.
“It's time to change that,” he added.
President Trump said, “Today I am announcing the creation of the Office of Internal Revenue Service to collect all duties, duties, and revenues from foreign countries.'' “We will start charging the companies that profit from us in trade, and they will finally start paying their fair share.”
He declared that January 20, the first day of his second term, would be the National Tax Agency's “birthday.”
President Trump has long promoted higher tariffs as a way to get money from foreign trading partners and as a negotiating tool. Critics of the plan say the tariffs would lead to retaliatory tariffs and often end in damaging trade wars.
The president of Mexico, one of the targets of President Trump's tariffs, made the claim in an effort to dissuade threats of tariffs on the country.
“Mexico's major exporters to the United States include General Motors, Stellantis, and Ford Motor Company, which arrived in Mexico 80 years ago,” President Claudia Sheinbaum wrote. “Why impose tariffs that put them at risk? Such measures are unacceptable and will lead to inflation and job losses in both the United States and Mexico.”
Others point out that tariffs are often simply passed on to consumers in the form of higher prices for products and services.
“While this is smart marketing, it doesn't change the fact that U.S. consumers end up paying higher tariffs.” answered Heather Long is an economics columnist for The Washington Post.
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