Rand Paul Attacks Trump’s Tariffs, Says Trade Deficits ‘Economic Fallacy’
Charlie Kirk Staff
05/20/2025

Kentucky Republican Sen. Rand Paul is continuing to attack President Donald Trump’s economic plans.
The senator, who has been a thorn in the side of the president for months, spoke against the tariffs again when he spoke to ABC News anchor Jonathan Karl on “This Week.”
“Well, tariffs are taxes, and when you put a tax on a business, it’s always passed through as a cost. So, there will be higher prices. And I think this is what’s important to know. People talk about, oh, this is America versus China. The U.S. doesn’t trade with China. You trade with Walmart, or you trade with Target, or you trade with Amazon. Americans go in and buy a product,” the Republican senator said.
“Now, it might come from China, but think about it this way — think if the entire trade with China was all TVs. A million people go to Walmart. They all buy a TV. They like the quality. They like the price, and it happened to come from China,” he said.
“But then you draw a circle around China and the U.S., and you say, oh, my goodness, it’s a trade deficit. We buy all of our TVs from over there. But each individual transaction — each individual who bought a TV was happy. How can you draw a circle around a million happy people and say they all got ripped off?” Paul continued.
“So, there is an economic fallacy here, and the fallacy is that trade deficits actually mean anything. They’re an artificial accounting. The only trade that means anything is the individual who buys something. That’s the only real trade. And that by very definition, if it’s voluntary, is mutually beneficial, or the trade doesn’t occur,” he said.
The anchor said that the trade deficit with Canada is less than $1 billion and asked if that was subsidizing Canada as the president has said.
“No, they’re really not related at all. What happens if we trade with another country because they have less expensive goods is we become richer. You also have more money that you can spend,” Paul responded.
“So, let’s say you’re an average American and you shop at Walmart, you save about $4,000 or $5,000 a year because you’re able to purchase goods that are important from other countries. What do you do with that? I don’t know, maybe you go to Disneyworld, maybe you go to Dollywood. You know, you go — you can — you spend a lot of it in America, maybe you get somebody to cut your grass. There’s all kinds of things that happens to that extra money, but you are richer because you’ve gotten a product at a lower cost,” he said.