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Trump Pitches External Revenue Service to Collect Tariffs: What to Know

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Trump Pitches External Revenue Service to Collect Tariffs: What to Know

President Trump has promised to generate a “massive” amount of revenue with tariffs on foreign products, an amount so big that the president said he would create a new agency — the External Revenue Service — to handle collecting the money.

“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens,” Mr. Trump said on Monday in his inaugural address, where he reiterated a promise to create the agency. “It will be massive amounts of money pouring into our Treasury coming from foreign sources.”

Much about the new agency remains unclear, including how it would differ from the government’s current operations. Trade experts said that, despite the name “external,” the bulk of tariff revenue would continue to be collected from U.S. businesses that import products.

Here’s what you need to know about what Mr. Trump has proposed.

Tariff revenue is currently collected by U.S. Customs and Border Protection, which monitors the goods and the people that come into the United States through hundreds of airports and land crossings.

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This has been the case nearly since the country’s inception. Congress established the Customs Service in 1789 as part of the Treasury Department, and for roughly a century tariffs were the primary source of government revenue, counted in stately customs houses that still stand in most major cities throughout the United States, said John Foote, a customs lawyer at Kelley, Drye and Warren.

With the creation of the income tax in 1913, tariffs became a minor source of government revenue, and after the Sept. 11 attacks, the customs bureau was moved from the Treasury Department to the Department of Homeland Security.

Customs officials today collect tariff revenue, but also monitor food safety, enforce intellectual property rights, inspect crops for pests and screen imports for goods made with forced labor, Mr. Foote said.

Creating a new agency is the provenance of Congress, not of the president, so it is not clear how the administration might go about establishing the new unit.

In an executive order issued on Monday evening, the president directed the leaders of Treasury, Commerce and Homeland Security to “investigate the feasibility of establishing and recommend the best methods for designing, building, and implementing an External Revenue Service (ERS) to collect tariffs, duties, and other foreign trade-related revenues.”

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The money that the United States collected from tariffs grew significantly as Mr. Trump imposed levies on foreign metals, solar panels and thousands of goods from China in 2018 and 2019. The government collected $111.8 billion in trade duties, taxes and fees in 2022, up from $41.6 billion in 2018, according to Customs data.

That number could increase by multiples if Mr. Trump follows through on his promises to tax all American imports, and impose even higher levies on products from China. On Monday evening, Mr. Trump said that he planned to move forward with a 25 percent tariff on Canada and Mexico on Feb. 1, and was considering a universal tariff on all foreign products.

Mr. Trump and other Republicans are eagerly looking to tariff revenue to help to finance tax cuts. Still, tariffs are likely to earn just a tiny slice of what the United States takes in through income taxes. Economists say revenue from even very substantial tariffs would likely max out in the hundreds of billions of dollars, while the United States took in $4.2 trillion in income and payroll taxes last fiscal year. Tariffs would also decrease U.S. deficits, lower growth and raise consumer prices, the Congressional Budget Office calculated last month.

Mr. Trump insists that foreign countries pay the tariffs but it’s actually so-called importers of record — the companies responsible for bringing products into the United States — who pay tariffs to the government. Most importers sign up for a government electronic payment system, and the tariff fees are automatically deducted from their bank accounts as they bring products into the country.

Importers of record can be of any nationality: U.S. companies, U.S.-based divisions or branches of foreign companies, or foreign companies directly importing, without a business presence within the United States, Mr. Foote said.

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But Richard Mojica, a customs lawyer at Miller & Chevalier, said U.S. importers “are usually U.S. companies.” He said that Mr. Trump had created confusion by saying that the External Revenue Service “would collect duties and tariffs ‘that come from foreign sources’ — a term that nobody understands.”

“I don’t see how the E.R.S. could collect tariff payments from a foreign manufacturer who is not also the U.S. importer of record,” Mr. Mojica added.

The question of who pays the tariff to the government is somewhat distinct from the issue of who ultimately bears the tariff’s costs. The importer can pass the cost of the tariff on to American consumers in the form of higher prices, or it could try to force its foreign factories to sell its goods more cheaply.

Every case is different, but several economic studies have found that American consumers mostly bore the brunt of Mr. Trump’s previous tariffs on China.

Some trade analysts say that the name “External Revenue Service” is an effort to disguise who really pays for tariffs.

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Scott Lincicome, the vice president of economics and trade at the Cato Institute, which supports free trade, called the agency’s name “more branding than substance — and misleading branding at that.”

“Trump could call it the ‘Foreigners Pay the Tariffs Agency,’ and it still wouldn’t change the fact that Americans really are,” he said.

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After Heathrow, Who Pays for Missed Cruises and Hotel Bookings?

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After Heathrow, Who Pays for Missed Cruises and Hotel Bookings?

Last Friday’s power outage in Heathrow Airport disrupted vacations across the world, causing countless thousands of travelers to miss prepaid reservations and forgo long-anticipated adventures.

Among them were Sheila Addison, a therapist from Seattle, who missed out on a four-day whisky-tasting in the Scottish Highlands, forfeiting a $500 nonrefundable hotel room and a rare break from her work routine; Zachary Wang and friends from Brown University, who lost $260 in “Les Misérables” tickets, $180 from an Airbnb reservation and two days of spring break in London; and Steve Wehr of Hyde Park, N.Y., who missed two days in Jordan — including the first day of a cruise — a loss of about $1,500.

Who pays when your vacation gets ruined through no fault of your own?

The answer, all too often, is you. Though travelers can recoup some losses through refunded flights and vouchers for meals and hotel stays, airlines generally do not pick up the tab for reservations that can’t be canceled, expensive last-minute flights that must be booked, or missed family events like weddings.

Unfortunately, there is no perfect way to protect yourself, but there are three imperfect ones. Here’s what you can do:

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Mr. Wehr does not expect to recover that $1,500 he lost by missing two days in Jordan. “We didn’t have trip insurance,” he lamented in an email.

It probably wouldn’t have mattered. Travel insurance is generally a “covered peril” type of policy, meaning that the fine print has a list of events that you are covered for, like illness, hijacking and natural disasters. Guess what is almost never on there: airport power outages.

“It covers a lot. It doesn’t cover everything,” said Stan Sandberg, a co-founder of TravelInsurance.com, an online marketplace. Companies try to update policies to match the current travel environment, he said, but only one he knew of covered what happened at Heathrow.

Indeed, Travel Guard’s Deluxe and Preferred plans specifically protect against airport closures caused “by a fire or a power outage.” But they “must result in a delay of the Insured’s Trip for at least 48 consecutive hours,” according to the policy. So even if Mr. Wehr had chosen one of those plans, he would have had to show that his delay was long enough. Claims adjusters are sticklers by nature.

Comparison shop on sites like TravelInsurance.com, or its competitor SquareMouth, and make sure the policies best cover the risks that fit your own circumstances (infirm relatives) or your destination’s (hurricanes). It is usually best to avoid policies offered at checkout by airlines and online travel agencies, which are generally one-size-fits-all, and to not put too much hope into policies included with some credit cards.

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Another option is a Cancel for Any Reason, or CFAR, plan that typically allows you to back out of a trip, no questions asked, though you often don’t get a 100 percent refund. But most require you to cancel 48 hours before the trip starts, Mr. Sandberg said — which wouldn’t have helped the typical Heathrow strandee.

But Iris Planamento of Manchester Township, N.J., was not typical. She was on her way to see London, Paris and Normandy with EF Go Ahead Tours when her flight got canceled. The company’s CFAR plan is AnyReason Protection, a $75 add-on that offers trip credit, not your money back — but that expires only at airport check-in.

Ms. Planamento was delighted to confirm she was covered and plans to rebook soon. “Give a plug to the company,” she said — not a common sentiment among stranded travelers.

Losing one day of a weeklong trip to Paris is a shame, but don’t ask the rest of us for sympathy. Missing a wedding or a cruise ship departure is another story.

Here’s a basic rule: Book flights that are scheduled to arrive at least 24 hours in advance of anything you can’t miss. You’ll want to extend that cushion based on a number of factors, like how crushed you’d be to miss the wedding and whether your cruise ship’s next port of call is reachable by 20 daily flights or one monthly tugboat.

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You’ll also want to consider your backup plan. If you’re headed from New York to Chicago and your flight gets canceled, there’s a pretty decent chance you’ll be on another flight that day from the same or another area airport, or, worst case scenario, you could drive overnight. There are fewer options if you’re headed from Hawaii to Dubrovnik, Croatia, to catch an island-hopping cruise.

The carrier you choose matters. As you book, look at how many flights a day each airline has, and lean toward the one with the most flights, even if it’s somewhat more expensive. Airlines are often very stubborn about booking you on competitors, sometimes even if they’re in the same alliance.

Your wallet size matters, too. Those with a financial cushion need less of a time cushion: If you’d be willing to plunk down a few grand for a new last-minute flight, a 24 hour cushion might be plenty.

Gloria-Jean Masciarotte’s flight to London turned around midflight and returned to Boston. She and her family were able to cancel most of their plans, but “the fly in the ointment,” she said, was their $3,146 Airbnb rental. Airbnb did not declare the outage a “major disruptive event” — nor should they have, given the company’s definition of that term. But after two days of texts and phone calls, she said, she was able to finagle a $2,730 credit.

Once something does go wrong, take action. Be the person who waits in line at the customer service desk while on hold with the customer service line and writing the airline via social media. Get in touch with hotels as soon as possible to ask for a refund, but settle for a partial one. Realize that if your prepaid plans include a vacation rental, it is your host, in most cases, who must grant a refund, not the company. They also stand to lose money through no fault of their own, so be really, really nice.

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Actually, be nice to everyone, even if you happen to run into, say, the people in charge of Heathrow’s backup power supply. They’re already stressed enough.


Follow New York Times Travel on Instagram and sign up for our Travel Dispatch newsletter to get expert tips on traveling smarter and inspiration for your next vacation. Dreaming up a future getaway or just armchair traveling? Check out our 52 Places to Go in 2025.

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Foreign Travelers Are Rethinking Travel to the U.S.

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Foreign Travelers Are Rethinking Travel to the U.S.

International tourists detained at U.S. borders. Steep tariffs imposed on trade partners. Threats against longtime allies.

The onslaught of contested policies and language by the Trump administration in recent weeks is causing tourists around the globe to either cancel or reconsider travel to the United States. A growing number of visitors say they feel unwelcome or unsafe and are reluctant to support the economy of a country that some foreign officials say is waging trade wars and destabilizing its allies. A draft of a new travel ban circulating through the administration could restrict citizens from up to 43 countries, including Belarus, Cambodia and St. Lucia, from entering the United States.

“So many Americans are looking to escape the tense and toxic atmosphere at home. Why would anyone want to visit, especially right now with all the arbitrary detentions at immigration?” said Mallory Henderson, 53, a marketing consultant in London who usually visits the United States twice a year, but canceled a trip to visit her brother and niece in Boston this Easter.

“It’s a really hostile and scary time, and quite frankly, there’s plenty of other inviting and pleasant places I can go to meet up with my family,” she said.

Even before the change in administration in January, the U.S. travel industry was struggling to recover from the pandemic, mainly because of the strength of the dollar, which makes it more expensive for foreign travelers to visit, and long visa wait times. Inbound international visitor numbers were not expected to reach 2019 levels until later this year and foreign visitor spending is not projected to fully recover until 2026, according to the U.S. Travel Association.

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But those expectations may now be even harder to reach, travel experts say.

The research firm Tourism Economics had originally forecast travel to the United States to grow by 9 percent this year, but in February, it updated its outlook, expecting inbound travel to decline by 5.1 percent and hotel demand to decline by 0.8 percent in 2025 — the equivalent of an $18 billion drop in spending. Much of the decline is the result of a boycott by Canadian travelers. In February, after President Trump announced tariffs on Canada, the number of Canadians driving across the border fell by 24 percent compared with the same period in 2024.

Airlines are responding to the uncertainty. Some, including Delta Air Lines and American Airlines, cut their financial forecasts for the first few months of the year, citing softness in travel spending. Scott Kirby, the chief executive of United Airlines, said the carrier had reduced the frequency of numerous routes to Canada because of a “big drop in Canadian traffic” into the United States.

“The negative sentiment shift is anticipated to be sustained by an evolving mix of Trump administration factors, including geopolitical friction on trade and national security policies, charged rhetoric and adversarial posturing,” said Adam Sacks, the president of Tourism Economics.

“High-visibility border security and immigration policies and enforcement actions are also expected to discourage visits,” he added.

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Uncertainty at the U.S. border has led several countries, including Britain, Germany and Canada, to update their travel advisories for the United States, highlighting that a visa waiver does not guarantee entry into the country and that foreign visitors suspected of breaking entry rules could be detained or arrested at the border. The warnings come after a series of detentions at U.S. ports of entry that involved foreign tourists and green card holders. This month, French officials said a French scientist was denied entry because his phone, which was searched on arrival, contained personal opinions about the Trump administration’s policies. U.S. authorities rejected the claim, saying that the refusal was not tied to his “political beliefs.”

Travel operators in Europe have not yet reported large waves of cancellations on the scale of Canada, where many residents are boycotting travel to the United States, but a growing number of travelers are rethinking their spring and summer plans. Eric Dresin, the secretary general of the European Travel Agents’ and Tour Operators’ Associations, said “turbulent times” are expected, particularly if more countries are affected by U.S. policy changes.

Arrivals into the United States from Western Europe fell by one percent in February after increasing by 14 percent the same period last year, according to preliminary data from the U.S. National Travel and Tourism Office.

Christoph Bartel, 28, a German citizen who lives in Norway, had planned a trip to Arizona this summer to visit national parks. He canceled his plans last week in response to the Trump administration’s firing of national park employees and reversal of environmental regulations.

“It does not feel right to support the American economy when the president is causing so much sabotage,” Mr. Bartel said. “It is disappointing to abandon a special trip we planned for months, but we will go to Canada or Mexico instead.”

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After Canada and Mexico, Britain supplies the largest number of visitors to the United States, with nearly four million last year. Travel agencies are seeing a split among those clients who frequently visit the United States and are not being deterred by the political climate, and those who are looking for alternative destinations in response to the policy changes.

The sheer expense of visiting the United States in the wake of the pandemic also appears to be taking a toll.

“America was always thought of as a really good value,” said Alan Wilson, the managing director of Bon Voyage Travel & Tours, a British company specializing in trips to the United States and Canada. Along with the strength of the dollar, prices of hotels have also been going up, and steep tips are a problem for many visitors.

“The British market absolutely hates the 20 percent tipping culture and how America always has its hand held out for the next gratuity,” he said. “They would rather pay the money up front.”

Mr. Wilson said his company had seen a 5 percent downturn in U.S. bookings this year compared with the same period last year, but he didn’t expect that number to change much by the summer, as most customers are already booked on multi-destination U.S. itineraries that were confirmed a year in advance.

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In places like New York, Florida and California, the crunch is being felt by small travel businesses, which were optimistic that 2025 would bring growth. Luke Miller, the owner of the family-run company Real New York Tours, said his business was being decimated after droves of mainly Canadian visitors canceled following Mr. Trump’s announcement on tariffs.

“I just had 20 busloads of seniors cancel their upcoming tours. That’s thousands of dollars of losses for my small business,” Mr. Miller said, adding that he is receiving cancellations as far out as the winter holiday season and has no bookings from Europeans this summer, his second biggest market after Canada. He called the situation “heart-wrenching.”

Major destinations like New York and California are ramping up marketing efforts to reassure international tourists that they are welcome. Visit California, the state’s tourism agency, revised its overall projections for 2025 visitor spending this month to $160 billion from $166 billion, following the slowdown in the growth of international travelers and the devastating wildfires in Los Angeles in January.

“The good news is, thanks to California’s strong brand on the global stage, international visitors continue to show a strong affinity for the Golden State,” Caroline Beteta, the agency’s president, said in a statement.

New York has had similar messaging. Addressing the expense of visiting the city, Julie Coker, the president of New York City Tourism+ Conventions, said it was possible to visit on a budget, and the marketing organization would highlight those opportunities.

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“This is an excellent opportunity to highlight the other boroughs and parts of New York City outside of Manhattan that are just as vibrant and have amazing, award-winning culinary, arts and cultural experiences,” she said, adding that New York had faced obstacles before and is confident that it will be able to reach its goal of recovering international spending by 2026 despite the current challenges.

Mr. Miller of Real New York Tours is not convinced. He said that if bookings did not pick up this summer, he would have to consider laying off staff.

“The reality is that we are being hit the hardest and might not survive,” he said.

Christine Chung contributed reporting.


Follow New York Times Travel on Instagram and sign up for our Travel Dispatch newsletter to get expert tips on traveling smarter and inspiration for your next vacation. Dreaming up a future getaway or just armchair traveling? Check out our 52 Places to Go in 2025.

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Who Is Jeffrey Goldberg, the Editor Mistakenly Added to the Signal Chat?

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Who Is Jeffrey Goldberg, the Editor Mistakenly Added to the Signal Chat?

Jeffrey Goldberg may be one of the last journalists the Trump administration would want to inadvertently include on a private text thread discussing war plans. But according to Mr. Goldberg’s stunning revelation on Monday, that is exactly what happened.

Mr. Goldberg, 59, was a well-known national security reporter before he took over as editor in chief of The Atlantic in 2016. He was born in Brooklyn and studied at the University of Pennsylvania before dropping out and moving to Israel to serve in the Israel Defense Forces. He wrote about his time as a prison guard in 1990, during the First Intifada, for a 2006 book, “Prisoners: A Muslim and a Jew Across the Middle East Divide.” He also began a career in journalism while in Israel as a columnist for The Jerusalem Post.

Mr. Goldberg returned to the United States and worked as a police reporter at The Washington Post. He wrote for New York magazine and The New York Times Magazine, and became the New York bureau chief of the Jewish newspaper The Forward. In 2000, The New Yorker hired him as its Middle East correspondent, a role he held for five years before becoming the Washington correspondent.

In 2007, he was lured to The Atlantic after its owner, David Bradley, sent ponies to Mr. Goldberg’s Washington home for his three young children. He took over as its editor in chief nine years later.

Under Mr. Goldberg’s editorship, The Atlantic won its first Pulitzer Prize, in 2021, and also won one in 2022 and another in 2023. The magazine won the National Magazine Award for General Excellence in 2022 and 2023. Mr. Goldberg is also the moderator of PBS’s “Washington Week With The Atlantic.”

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The magazine has been controlled by the Emerson Collective, an organization run by Laurene Powell Jobs, since it acquired a majority stake in 2017. Last year, The Atlantic announced that it was profitable and had more than one million subscriptions. It increased the number of print magazines it publishes to 12 a year, up from 10.

Recently, Mr. Goldberg has been beefing up political coverage at The Atlantic, hiring several top journalists from The Washington Post. The Atlantic also announced that the MSNBC “Morning Joe” co-host Jonathan Lemire and the programmer Alex Reisner would be contributing writers.

Mr. Goldberg has frequently been an antagonist to President Trump. In 2020, he reported that Mr. Trump had disparaged American military members who died during service as “losers.” In 2024, he wrote that Mr. Trump continued to have disdain for the U.S. military and had said he needed “the kind of generals that Hitler had.”

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