Earlier this week, Sen. Rand Paul (R-Ky.) launched a short-lived attempt to block President Trump’s new tariffs. Fortunately, in this case, he lost. Vice President JD Vance cast the tie-breaking vote.
Paul played all of the libertarian greatest hits, from calling tariffs “taxation without representation” to claiming they represent big-government tyranny. He ignored one key fact: Donald Trump ran, and won, on an explicitly pro-tariff platform. The American people voted for this.
If Paul really wants to reduce the size and scope of government, he has no choice but to support Trump’s tariffs.
The reality is that tariffs are the form of taxation most compatible with small government. That’s why America’s founders — and every president on Mount Rushmore — supported them.
How tariffs promote small government
Tariffs shrink the power of government in three ways. First, they reduce foreign demand for U.S. debt, limiting borrowing. Second, they promote full employment, reducing welfare dependency. Third, they protect American businesses from foreign state interference.
America has run trade deficits every year since 1974. The cumulative total, adjusted for inflation, approaches $25 trillion. In 2023 alone, the trade deficit in goods and services neared $920 billion.
We didn’t pay for that deficit with domestic production. Instead, we sold off assets — real estate, stocks, and bonds. China and its trading partners ship us goods, then buy up our future in return.
That includes our debt. Foreign demand for Treasury bonds has exploded because countries like China must recycle their trade surpluses somewhere. This artificial demand makes it easier — and cheaper — for Washington to borrow without raising yields.
Foreign entities now hold $8.5 trillion in U.S. public debt, about 29% of the total. The explosion started in 2001 when China joined the World Trade Organization, and our deficits soared.
The result? Washington spends recklessly. And the cost of servicing that debt — over $300 billion in interest payments to foreign creditors — bleeds out the economy. That’s roughly equal to our annual trade deficit with China.
Higher tariffs would shrink the trade deficit and lower foreign demand for American debt. That would limit Washington’s access to cheap credit — exactly what fiscal conservatives should want.
Long term, if tariffs replaced the income tax as the government’s primary revenue source, federal borrowing would face a hard cap. Unlike the income tax, tariffs are avoidable. If rates rise too high, people buy domestic. That reality places a natural limit on tax revenue and borrowing capacity.
In short: Tariffs enforce fiscal restraint.
Tariffs favor work over welfare
Since 2001, the U.S. has lost more than 5 million manufacturing jobs — along with the service jobs that depended on them.
Offshoring gutted labor’s bargaining power. When employers can threaten to send jobs to China, wages stagnate. Productivity no longer guarantees compensation. Workers take what they can get, or they’re replaced.
This “race to the bottom” helped erode middle-class wages and drive up welfare dependency. Over 10 million Americans now qualify as chronically unemployed, with many dropped from the labor force entirely.
As I explain in my book “Reshore,” mass job loss carries political consequences. Unemployed citizens are more likely to vote for higher taxes, expanded social programs, and even socialist policies. Poverty breeds dependency — and dependency fuels government growth.
Even if you buy the libertarian argument that tariffs “distort” markets, the result still favors liberty. The jobs tariffs protect are real. They preserve dignity, reduce welfare rolls, and shrink government.
Work is cheaper — and better — than welfare.
Good fences make good neighbors
Paul argues that tariffs let government “pick winners and losers.” He wants the market to decide.
Well, sure. That would make sense — if America competed on equal footing. But we don’t. Chinese businesses don’t operate under free market conditions. They’re backed by the Chinese Communist Party, which props them up with subsidies, below-market financing, land-use preferences, and outright theft — up to $600 billion per year in American intellectual property.
U.S. small businesses can’t compete with state-sponsored enterprises. That’s why entire American industries, towns, and families have disappeared.
Tariffs serve as economic fences. They shield American firms from foreign governments — not just foreign competitors. That protection restores actual market competition inside the United States, where private companies can go head-to-head without facing a communist superstate.
And economic competition isn’t just about firms. It happens at every level: workers vying for jobs, companies for customers, nations for global influence. Globalism collapses these layers into a single, rigged marketplace where the biggest government wins — and right now, that’s Beijing.
Tariffs restore order by separating national economies enough to maintain fair play. They enhance domestic competition while preserving international boundaries. Most importantly, they keep the CCP — the world’s largest and most authoritarian government — from dominating American markets.
If Rand Paul really wants to reduce the size and scope of government, he has no choice but to support President Trump’s tariffs.
Opinion & analysis, Rand paul, Tariffs, Taxes, Trade deficit, Trade war, Manufacturing, China, Donald trump, Jd vance, Debt, Treasury bonds, World trade organization, Wto, Reshoring, Foreign investment, Property, Affordable housing, Welfare, Employment, Limited government, Middle class