This week, Senator Rand Paul (R-KY) made a brief, unsuccessful effort to challenge President Trump’s recent tariffs. Fortunately for the administration, he didn’t succeed. A tie-breaking vote from Vice President JD Vance ensured the tariffs went forward.
Paul brought up familiar libertarian arguments, labeling tariffs as “unrepresented taxation” and suggesting he’s fighting against government tyranny. However, he overlooked a key detail: Donald Trump campaigned on a bold, provocative platform and secured a win. Voters supported this direction.
If Paul genuinely aims to shrink government size and influence, aligning with Trump’s tariffs is essential.
In fact, tariffs align well with the goals of limited government. This compatibility is why figures like the Founding Fathers and esteemed presidents—those who are now immortalized on Mount Rushmore—endorsed them.
Understanding Tariffs and Small Governments
Tariffs can diminish government power in various ways. They reduce foreign demand for U.S. debt, curtailing the need for borrowing. They also encourage full employment, helping to lessen reliance on welfare programs. Furthermore, they shield American businesses from external interference.
The U.S. has been in a trade deficit since 1974, accumulating a staggering $25 trillion when adjusted for inflation. Just this year, the deficit in goods and services has approached $920 billion.
We haven’t offset that deficit through domestic production—but rather, we’ve sold off assets—real estate, stocks, bonds. Countries like China send goods to the U.S. and, in turn, purchase our future.
That future includes our debts. The demand for Treasury debt has surged as nations like China need to recycle their trade surpluses. This inflated demand allows Washington to borrow more easily and cheaply, impacting our economy significantly.
Currently, foreign entities own about $8.5 trillion of U.S. public debt—nearly 29% of the total. This trend exploded after China joined the World Trade Organization in 2001, leading to a dramatic rise in our trade deficit.
The consequence? Washington tends to overspend, and the interest payments made to foreign creditors alone exceed $300 billion, draining the economy. That’s roughly on par with our annual trade deficit with China.
By increasing tariffs, we can decrease the trade deficit and lessen foreign interest in U.S. debt, thereby limiting the availability of cheap credit in Washington. This is precisely what fiscal conservatives should advocate for.
In the long term, restricting federal borrowing will become inevitable if tariffs replace income taxes as the primary revenue source. Unlike income taxes, customs duties can be dodged; if prices are too steep, consumers will opt for domestic products. This sets natural limits on tax revenue and borrowing potential.
In essence, tariffs impose financial constraints.
Choosing Work Over Welfare
Since 2001, the U.S. has seen a loss of over 5 million manufacturing jobs.
This situation erodes the bargaining power of workers. Stagnant wages become more common when employers can threaten to move jobs overseas. Productivity no longer reliably translates to better pay. Workers feel they must accept whatever they can get.
This “race to the bottom” has eroded middle-class wages and increased reliance on welfare. Over 10 million Americans are now classified as chronically unemployed, with many effectively out of the workforce.
As discussed in my book, “Re-shore,” significant unemployment carries political ramifications. Those without jobs often lean toward favoring higher taxes, greater social programs, and even socialist principles.
Even conceding the libertarian claim that tariffs distort the market, they still promote freedom. Protecting jobs helps maintain dignity, lessens reliance on welfare, and sparks a decrease in government involvement.
Work is ultimately more valuable—both economically and socially—than welfare.
The Value of Economic Boundaries
Paul argues that tariffs end up picking “winners and losers,” suggesting the market should decide instead.
That would be fine—if America were competing fairly. But we aren’t. Chinese firms don’t operate under a free-market system; they receive substantial backing from the Chinese Communist Party (CCP). The CCP has increased subsidies and provided cheap financing, among other advantages—including the estimated theft of up to $600 billion annually in American intellectual property.
Small and medium-sized U.S. businesses find it nearly impossible to compete against such state-sponsored entities. The fallout is evident; entire American industries, communities, and families have been devastated.
Tariffs function like economic barriers, shielding American companies from foreign government interference. They aim to restore genuine market competition in the U.S., allowing private firms to engage without navigating the complexities imposed by communist competition.
And it isn’t just businesses competing; it’s workers vying for jobs, businesses looking for clientele, and nations striving for global status. Globalism threatens to flatten these dynamics into one vast market dominated by the most powerful government—currently that’s Beijing.
Tariffs bring order by maintaining enough separation between national economies to foster fair competition. They bolster domestic rivalry while ensuring international boundaries remain intact. Most importantly, they prevent the CCP from gaining a monopoly over the American market.
If Rand Paul truly aims to limit government size and reach, he has no alternative but to support President Trump’s tariffs.
