Show notes
Sen. Rand Paul (R–Ky.) has been speaking out against President Donald Trump's tariffs. He supported a bill to repeal the emergency powers that allowed him to levy tariffs on Canada and recently co-sponsored a joint resolution with Sen. Ron Wyden (D–Ore.) to immediately terminate the national emergency that Trump declared in order to impose the worldwide tariffs. Paul joins the show today to explain his opposition to tariffs, defend free trade, warn about the dangers of expansive emergency powers, and discuss his own bill to end unilateral tariffs for good: the No Taxation Without Representation Act of 2025. This interview was recorded on April 8, 2025. Sources Referenced: List of largest daily changes in the Dow Jones Industrial Average A joint resolution terminating the national emergency declared to impose duties on articles imported from Canada. Trump blasts "disloyal" Republicans on Truth Social Flexport's reverse engineering of tariff formula Just Asking Questions with Batya Ungar-Sargon: The Case for MAGA Leftism Chapters: 00:00 Coming up… 00:22 Introduction 01:04 Can the president start a trade war alone? 04:25 Congress vs. emergency powers on tariffs 06:11 Paul reacts to Trump's market and trade comments 09:09 Is the middle class really hollowed out? 13:59 Tariffs, class warfare, and the MAGA Left 16:33 Debunking the Rust Belt narrative and the future of jobs 20:46 Paul on the Taxation Without Representation Act This is an AI-generated transcript. Check against the original before quoting. Zach Weissmueller: Can the president really just start a trade war by himself? Just asking questions. Senator Rand Paul of Kentucky is here today because he objects to the idea that the president can unilaterally levy taxes—which is what tariffs are—without any input from Congress. He's got a bill that makes that clear, and he joins us today to talk about it. Senator Paul, thank you for coming on. Sen. Rand Paul: Glad to be with you. Zach Weissmueller: There's been market turmoil since the tariffs were announced. We've seen two of the top 10 largest daily point losses in the Dow's history in just the past week. You and your fellow Kentuckian Mitch McConnell have been breaking with the GOP on this. Why do you think this policy hurts your constituents? Sen. Rand Paul: Well, you know, it's interesting. I have yet to have anybody that's in business in Kentucky call me and say, "Oh, pleased to have tariffs." I have the farmers who call me and they say, "We export about 20 percent of what we sell, but we're still suffering from the tariffs in the previous Trump administration in 2018, 2019." The bourbon industry contacts me and says, "Well, retaliatory tariffs by Europe, Canada, and other countries will hurt our exports of bourbon." I have shippers, international shippers, and domestic shippers who also do international. They say it'll hurt them. Homebuilders say, "Well, if lumber and steel go up, the price of houses will go up." And already we have high interest rates, and we already have inflation in homes. So I really don't get anybody coming to me and saying, "Please have tariffs." I'll say they're worried about the tariffs. But I think more generally, the problem is there's an economic fallacy that's being promoted. The fallacy is that somebody's getting ripped off—that when you trade, somebody gets ripped off. And the problem with this is it's completely false. It's not even just a little false. It's completely and entirely false. The U.S. doesn't trade with China. You trade with Walmart. You go to Walmart and you buy something. But in that trade, it has to be mutually beneficial. You have to perceive it as a benefit to you. You will give your 50 bucks for some kind of electronics there, or a hundred dollars for electronics, only if you value the electronics more than your 50 dollars, and vice versa. Trade is always mutually beneficial. So how can we have millions of trades with Walmart or Target or all these companies, and they're all mutually beneficial, and then we say, "Well, we add them all up and we've been ripped off. China is ripping us off." It's just not true. Another way to look at this is for the last 70 years, trade has been growing exponentially—international trade—but you know what else has been growing exponentially? GDP. GDP per capita is growing exponentially over 70 years. Trade is actually proportional. We have to actually have the fundamental debate: Is trade good or bad? And without question, the statistics overwhelmingly say trade is good. We're getting richer. One hundred thousand people escape poverty every day because of capitalism and its extension, trade. Liz Wolfe: You recently co-authored with Senator Tim Kaine a joint resolution that just passed the Senate and would, in fact, terminate the emergency powers that President Trump is using to impose tariffs on Canada. For this, he unfortunately blasted you and a handful of other Republicans as disloyal. Do you feel like Congress has real hope of checking his power right now? Sen. Rand Paul: You know, I don't like the idea of living under emergency rule. Emergency rule basically would be overruling the Constitution and saying that the separation of powers no longer exists. When our Founding Fathers wrote the Constitution, they were very, very wary of a king, and they didn't want to create an executive branch or a president that was anything like a king. So they gave our president very little power on important powers like taxation. Some people call taxation the power to destroy. Our Founding Fathers gave that power to Congress, and even more specifically, they said taxes have to originate in the House of Representatives before they come to the Senate. So I think the president taking emergency powers to institute taxes is unconstitutional and shouldn't be allowed. I voted against the emergency powers and will continue to do so. In our history, we've had tariffs from almost the very beginning. We've had some form of tariffs, but the tariffs were passed by Congress. They weren't instituted by the president, and no self-respecting constitutionalist in the early parts of our country's history would have ever approved of letting the president do it without congressional authority. Liz Wolfe: We have a few highlights of President Trump talking to reporters about the market plunge from Air Force One on Sunday. I'd like to roll that clip and get your reaction real fast. President Trump: We have to solve our trade deficit with China. We have a trillion-dollar trade deficit with China, hundreds of billions of dollars a year we lose with China because of the tariffs. We have $7 trillion already committed to be invested in the United States, building auto plants, building chip companies, and all sorts of companies are coming into our country at levels that we've never seen before. What's going to happen with the market? I can't tell you, but I can tell you: Our country has gotten a lot stronger. I don't want anything to go down, but sometimes you have to take medicine to fix something. Liz Wolfe: Is what's happening in the stock market right now simply a tough pill that we have to swallow, a medicine as President Trump claims? Sen. Rand Paul: I think the goal of encouraging foreigners and others to invest in our country is good. And I think that the way you should encourage them is by having freedom—freedom of expression, freedom in your home to keep the government or invaders out of your home, freedom in your business to have low regulations and low taxes—and those should be encouragement enough to bring people to our country. But the idea that somehow we've been ripped off by having a trade deficit with China is just not true. For example, the trade deficit with China goes down when we have a recession. When we have terrible economics, the deficit goes down. When we have boom or growth, our deficit goes up. Trade deficits go up during booms and down during depressions. What does that tell you? Trade deficits are not a good indicator. Trade is proportional to economic well-being. So it's just not true, but it's easy for people to believe. They're like, "We want to blame somebody. We wish our life was better. We think something's wrong about our life and we think the Chinese did it," or it used to be the Japanese who they said did it. In the 1980s, I remember distinctly, everybody said the Japanese are taking over this and that, and we have to do something about the Japanese owning things in our country. It turns out Japanese investment has been good in our county in Kentucky. Toyota employs 14,000 Kentuckians. They assemble the Camry there. They make between $70,000 and $120,000 a year working on the line. These are very good jobs. I'm very happy that Toyota is in our state. Jim Beam is now owned by Suntory, which is a Japanese company. I'm happy they're in our state as well. We have German brake manufacturers. International trade is good. It is good for our country. We just need to get over that. But this is why the basics of trade have to be debated, and we have to understand that the U.S. doesn't trade with China. Individuals buy stuff from the internet or from a grocery store, but the individuals are all getting a good deal, not a bad deal, and I don't want to restrict their purchases or make their purchases more expensive with a tax. Liz Wolfe: Okay, so I feel you on this point that people are looking for a convenient scapegoat, but is there any truth to this idea that's currently raging in our political discourse that goes something like this? The middle class has been hurting for far too long, and that's because the Rust Belt and America's manufacturing capacity have really been hollowed out. Those jobs have been outsourced overseas, and now there's a real glut of people without dignified work in lots of regions of the country, and that this is a push to ensure that they are able to emerge into the workforce once again and be richer than ever before. Is there truth to this narrative that the middle class has been hollowed out? Sen. Rand Paul: No, it's absolutely untrue. If you look at the statistics on household income over the last 70 years, if you call lower class $50,000 and under, middle class $50,000 to $100,000, and upper class above $100,000, what you find is that the lower class has shrunk. Under $50,000, there are fewer people; slightly. Between $50,000 and $100,000, the middle class, there's slightly fewer people also. What does that mean? They didn't become poor. Where did they go? The upper class, above $100,000, has tripled over the last 70 years. So the middle class has not been hollowed out by becoming poor. The middle class is slightly smaller, but by becoming richer. What people don't understand is they see things in immediate sort of terms. During the Biden administration with inflation, significant inflation, the purchasing power of your check went down. And so you were transiently, in the last four years, the middle class was poor. Not because of trade, but because of inflation, because of debt, printing up new money to pay for the debt, the inflation, the loss of purchasing power, the diminishing value of the dollar, and the increase in general prices. That made people transiently poor. But on a 70-year curve, we've all gotten richer. HumanProgress.org talks a lot about this. Steven Pinker talked about this in Enlightenment Now. What you find is actually that 100,000 people are escaping poverty every day around the world. In 1820, 98 percent of people lived in abject poverty—less than $2 a day. When I was married in 1990, it was down to a third of the world living in abject poverty. Today, it's less than 10 percent. Why are the poor coming up out of poverty? Trade. What is trade? It's an extension of capitalism. Essentially, trade is volunteerism, but it's also the extension of the division of labor. Adam Smith wrote about this, and he said that prosperity is only limited by the extent of the division of labor. So the division of labor occurred when somebody in every household made their own shoes, and then one person in the village made shoes for the whole community. Then it turned out some guy two counties over—or woman—was even better. And that person began making shoes for the whole region. Then the state, and then we traded across state lines and national lines. With every extension of the division of labor, the specialization of labor changed. Some manufacturing was lost because of regulations, and some of it was lost because of governmental enhancements of unions. When governments began protecting unions in the 1930s—not just the right to bargain collectively, which is a basic economic and capitalist right, but when they protected unions from competition and gave them special privileges—they enhanced labor rates above the world labor rate, and that cost us some. We also didn't innovate. When we started doing steel, the electric arc furnace was an innovation. We didn't innovate with that, and we still have the blast furnace. We haven't been as efficient or cost effective with making steel, and the rest of the world got past us. As countries advance, as they get richer, many jobs in manufacturing actually do go to other parts of the world. As you become richer, you buy more stuff because you're rich. If you ask a rich person what their trade deficit is with Amazon, a rich person has a much bigger trade deficit with Amazon than a poor person. We're a rich country. We buy more stuff. We're always going to have a bigger trade deficit than everybody as long as we are rich. If you want to get rid of the trade deficit, we could become poor. If we went into a massive recession and we quit buying stuff, we didn't have any money to buy anything, we'll get rid of the trade deficit—and we'll be poor. It's so important that people realize that the trade deficit grows smaller when we spend less, when we have a recession. The trade deficit actually grows larger when we're buying more, when we're in an economic boom. Zach Weissmueller: Yeah, I mean, you're talking about this as growing the pie for everyone. But what I'm hearing from the supporters of these tariffs within Trump's coalition is more of a zero-sum argument where, yeah, this might temporarily hurt Wall Street, but it's going to help Main Street and bring back working-class jobs. And those things are in tension. That's exactly what we heard from a guest we had last week, Batya Ungar-Sargon, who describes herself as a MAGA leftist. Have you been surprised to see this more of a class warfare type of lens spread throughout the Republican Party? And how do you respond to that way of looking at things? Sen. Rand Paul: Well, populism and nationalism are not pro-capitalist, pro-free markets, or pro-freedom. It's really a disjointed philosophy that is built upon incorrect premises. So you're right. They see everything as zero sum: If someone wins, someone has to lose. Actually, the marketplace is win-win. It's one of these curious things about trade. If I buy something from you, in my mind I have to think I want it. If I have $100 and I want to buy the microphone that's in front of you for $100, I give you $100 but I want the microphone more than my $100. I feel like I won. But interestingly, from your perception, you think you won because you wanted my $100 more than you wanted the microphone. When we make a trade—any trade, any purchase—both sides of the equation, it has to be what they…
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