Challenging Presidential Power: The Fight Against Emergency Tariffs

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 call mutually beneficial. It's a win-win. The more trading, the more economic activity, it's winning all around.

But there's this misconception that's promoted that we've been losing for decades. We haven't been losing for decades; we've been winning for decades. The more international trade, the more trade—domestic trade, any kind of transaction in the marketplace—the more we are all winning. The statistics prove this out. But there have been too many people out there saying, "Oh, the middle class is hollowed out, we're all poor."

The only way we've become poor in recent times is through inflation and loss of purchasing power when prices rise faster than your wages do. That is a real thing. But as far as trade goes, trade has actually been doing the opposite. Trade is proportional to wealth.

Liz Wolfe: Zach and I were pushing back on this recently when sparring with some of our guests on whether or not free trade matters and is valuable for our country. One of the things we kept citing over and over again is: Look, if the Rust Belt were as hollowed out as people claim, why would we not see unemployment be way, way higher than it is?

We have certain sectors in this country where there actually are shortages, and these are working-class jobs that require not a four-year college degree or an advanced degree, but rather going to trade school. Like, we have a predicted shortage of plumbers coming our way in just a few years—by 2027, I believe.

What do you make of this argument? I'm very sympathetic to the idea that it is important for the middle class to have dignified work here, but the idea that the Trump administration appears to have, where these factories will just spring up overnight and suddenly provide gainful employment and we'll hop into higher sort of Rust Belt factory towns the way we used to—it just strikes me as totally unmoored from reality, especially in an age of automation. What do you make of this claim?

Sen. Rand Paul: You know, it's based on falsehoods. There's a shortage of workers. When I go to a tech school in Louisville—I went to an HVAC class in a tech school recently, there were about 50 or 60 people in the class. Their tuition had all been paid. If they graduate, their tuition will be completely paid for by HVAC—air conditioner repair and salespeople. Everyone had a job. Everyone's tuition was paid. There's not enough people doing HVAC.

And you say, "Well, I don't want to do HVAC. I'll never make any money." If you own an HVAC company, you'll make more than every doctor in town. Air conditioners are a great business to be in. So I would tell someone who says, "Well, this person's bright, they're intelligent, but they don't like reading books," go into HVAC. Go into electricity. Go into plumbing.

Electrical contractors make more than every doctor in town. These are wonderful jobs you're going to have. And even if you're just an electrician, you might make $60,000 to $90,000 a year as an electrician. If you own it and you have four electricians working for you, you'll make a million dollars a year.

So there's a ton of jobs out there. It's the best time to ever be alive in our life. And we just have to get over the negativity of what we perceive. There's a fancy name for this: they call it the availability heuristic. The more things are available—we learn from things because they're bad—and we tend to sense and remember bad things. If the stock market's been going up for 50 years, we remember the three times it went down. By golly, we're going to be prepared for the downturn, when in reality, the compound interest of the market going up has been something we should have taken advantage of.

So it's incumbent upon us that we discuss this from first principles: Is trade good or bad? How does trade occur? And how can each individual trade be a good thing, but all trade gathered together be a negative thing? It's because you're grouping it through artificial sorts of lenses. You're circling around it with an artificial periphery.

Nobody cares about the trade deficit between South Carolina and North Carolina. Nobody cares about the trade deficit between me and the grocery store. It's an artificial designation. Everybody knows it's meaningless. So is the trade difference between us and China. It's completely meaningless. Because you know what would happen if it were destroying us? We wouldn't have any more money. How do we have more money to buy their stuff for generations?

We've had a trade deficit with China every quarter since 1976. If it's been bad, how come our economy keeps growing? How come the GDP keeps growing? How come our middle class is joining the upper class since that period of time? It's almost the exact same period our upper class has tripled—since we began running a trade deficit. If we weren't rich anymore, the trade deficit would go down. If we weren't rich anymore, we couldn't buy their stuff. So people have to get to first principles in this basic discussion: Is trade good or bad? I think, without question, trade is good.

I think we're getting close to our end though. How close are we, guys?

Zach Weissmueller: Yeah, I've got one last question about your Taxation Without Representation Act, which I'm going to bring up here. Unlike other bills being proposed, it specifically reins in the ability of the president to levy tariffs without congressional approval. It reaches back into the history and applies to various tariff laws and trade agreements over the past century. Why do you think this is a misuse of emergency power in need of correction?

Sen. Rand Paul: Well, I think it's primarily a misuse of taxation power. Tariffs are a tax, and taxes have to be passed first in the House and then sent to the Senate. In addition to being an abuse of the taxation power, it's an abuse of emergency power.

Emergencies, to me, are someone invading—you know, the Japanese have invaded, it's World War II, and they've come ashore in California. That's an emergency. Saying that we've had a trade deficit with Vietnam is not an emergency.

So I voted last week with those who believe we shouldn't have an emergency with Canada. Ostensibly, they say it's because of fentanyl. I've also seen statistics now that say that more fentanyl goes to Canada from the U.S. than comes from Canada into the U.S. So it's hardly a fentanyl emergency on our northern border.

Now, it is the opposite in the south. We have a problem with fentanyl coming in from Mexico. But in Canada, they say more is going to Canada from the U.S. than coming in. Also, Canada agreed to do more policing of it. So there's no reason in the world we should put tariffs on them.

But we're also putting tariffs on about a hundred different countries. We're going to have an emergency with Vietnam? An emergency with Cambodia? An emergency with the Philippines? An emergency with Israel?

It's interesting—and you want to know how potent an issue this is? Netanyahu came here from Israel. And usually he wants more money or arms to be involved with the latest war. He came this time to say, "Lay off us on the tariffs."

So the tariffs are the most pressing issue to Israel right now, and they're in the middle of a war in Gaza. But the most important issue to their well-being and their ability to survive over there is American tariffs. That should give you pause when you think about whether tariffs are a good or bad idea.

Liz Wolfe: We understand you have to go and get back out there and vote, Senator Paul. Thank you so much for talking to Reason.

• Producer: John Osterhoudt

The post Rand Paul: Why I Oppose Trump's Tariffs appeared first on Reason.com.