Cato Daily Podcast Trade, Tariffs, and Our Big Spending Congress
Mar 7, 2025
Rand Paul, Republican U.S. Senator from Kentucky, critiques the Trump administration's tariff policies, warning they could spell disaster for U.S. businesses, particularly in the auto and bourbon industries. He argues that tariffs often harm the economy and emphasizes the real benefits of trade. The discussion also covers U.S. foreign aid spending and the urgent need for fiscal responsibility, advocating for permanent spending cuts and better auditing of federal programs in light of irresponsible budget practices.
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Kentucky Businesses and Tariffs
- Sen. Rand Paul discusses the negative impact of tariffs on Kentucky businesses like Toyota, Ford, and General Motors.
- He also mentions the bourbon industry and farmers, who face retaliatory tariffs, highlighting the widespread economic consequences.
Uncharted Tariff Territory
- The fallout from new tariffs, especially the 25% on Canada and Mexico, is unpredictable but likely disastrous.
- Sen. Paul points out that these tariffs are unprecedented, even compared to McKinley's policies.
Trade Fallacy
- Tariffs are a tax on trade, reducing its volume and based on the fallacy that trade is a zero-sum game.
- Sen. Paul argues that voluntary trade benefits both parties involved, citing the example of buying a radio from China.