President-elect Donald Trump took to social media on Tuesday to announce the creation of a new government agency, the External Revenue Service (ERS), aimed at collecting tariffs, duties, and revenue from foreign sources.
"For far too long, we have relied on taxing our great people using the Internal Revenue Service," wrote Trump on Truth Social.
"Through soft and pathetically weak trade agreements, the American economy has delivered growth and prosperity to the world, while taxing ourselves. It is time for that to change."
The announcement likely means trouble for Canada, which is currently without a functioning federal government due to the suspension of parliament by Justin Trudeau and an impending federal election.
Trump has threatened to impose 25% tariff on Canadian goods entering the U.S. unless border security problems are dealt with.
Over 77% of Canadian exports are directed towards the U.S., including a large amount of oil.
Trump's announcement, which promises to shift the burden of taxation from American citizens to international trade partners, has sparked discussion about a potential trade war between Canada and the U.S.
On Sunday, Foreign Affairs Minister Mélanie Joly said Canada is not ruling out the restriction of energy exports to the U.S. as a potential tariff countermeasure.
"All options are on the table when it comes to defending Canadian interests, and that includes our energy exports to the United States," said Joly, sparking outrage from Alberta Premier Danielle Smith, who warned of a national unity crisis.
"We will begin charging those that make money off of us with trade, and they will start paying, finally, their fair share," wrote Trump on Truth Social.
"January 20, 2025, will be the birth date of the External Revenue Service. Make America Great Again."
