The Trump trade veteran affirmed the president’s plans to form an External Revenue Service and radically reduce the United States trade deficit.
Senior Trade Counselor Peter Navarro doubled down on much of the trade agenda outlined in President Trump’s Jan. 20 trade executive memorandum during a discussion hosted by POLITICO in Washington, DC on Tuesday. During his conversation, Navarro advocated for the use of tariffs to reduce the trade deficit and confirmed the president still intends to create an External Revenue Service to collect these tariffs.
“If President Trump succeeds like he wants to succeed,” Navarro said. “We’re going to structurally shift the American economy from one over-reliant on income taxes and the Internal Revenue Service to one which is also reliant on tariff revenues and the External Revenue Service.”
Navarro noted the United States has a long history of tariffs that stretches back to the founding of the nation. Indeed, President George Washington’s Tariff of 1789, which established a 5% blanket tariff on all imports to fund the national debt, was the second bill he signed during his time in office. Similarly, Trump intends to implement tariffs as a means of increasing U.S. revenue rather than a trade enforcement tool alone.
“Tariff revenues are going to play a very important role, and it’s going to be part of a long-term transition,” Navarro said.
The president hasn’t wasted time in applying tariffs. On Feb. 1, Trump ordered 25% tariffs on Canada and Mexico, citing border security and fentanyl trafficking. This announcement immediately drew the United States and those two countries into separate negotiations, which resulted in a 30-day postponement of tariffs for both.
However, the president also imposed an additional 10% tariff on Chinese imports on Feb. 1 that have since taken effect. When asked whether China could get a delay on the tariffs, Navarro replied, “It’s up to the boss,” but Trump is reportedly happy to stall conversations with Chinese leader Xi Jinping.
When asked if tariffs might increase inflation, Navarro countered that export-dependent countries will reduce their prices and supply chains will shift in response to tariffs, with “more investment here, not there” ultimately coming to the United States. Commerce Secretary nominee Howard Lutnick’s remarks during his confirmation hearing last week mirror this position.
On Tuesday, Navarro also outlined roles within the second Trump administration’s trade team, which integrally includes Lutnick in what Navarro termed “the finest trade team ever” and a “definite upgrade from the last time around.” Notably, the first Trump administration was beleaguered with infighting over trade strategy. This time around, “we’re all pulling the same direction,” Navarro said on Tuesday.
Lutnick, Navarro said, will lead most of the Trump administration’s tariff negotiations, especially in matters concerning Section 232 of the Trade Expansion Act, which permits Commerce to investigate whether particular imports harm U.S. national security. As Treasury Secretary, Scott Bessent will lead the Committee on Foreign Investment in the United States and manage currency manipulation concerns. Jamieson Greer, Trump’s pick for the United States Trade Representative, “will take point,” Navarro said, on the United States-Mexico-Canada Agreement, the trade deal up for a formal review in July 2026. Greer is also charged with “re-calibrat[ing] the Section 301 tariffs on China” and evaluating whether China has lived up to the Phase 1 Agreement it signed with the president in his first term. According to Navarro, National Economic Council Director Kevin Hassett will evaluate “the macro aspects of tariffs.”
Navarro also expressed his disappointment in media coverage of Trump’s use of tariffs and trade engagement so far, emphasizing the enormous change he believes the president’s trade agenda will achieve:
“The goal of the trade policy — tariffs are but one tool of the trade policy — is to make sure that American workers and families face a level playing field in the international environment, and that’ll be measured by the jobs and factories that are created and by the fall from a trillion dollar year trade deficit down to zero. And you’ll see the rise of the External Revenue Service, and you’ll be less hounded by the Internal Revenue Service.”
Navarro’s interview can be found in full here: