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Who Pay’s the Tariffs? Foreign Countries or Americans? // Ron Paul Liberty Report
Ron Paul | Trusted Newsmaker
Who Pays the Tariffs? Foreign Countries or Americans?
Introduction
In a recent episode of the Ron Paul Liberty Report, Dr. Ron Paul and co-host Chris Rossini discussed an often misunderstood economic question: Who really pays tariffs? While political rhetoric often frames tariffs as a way to make foreign countries “pay up,” the reality, as they explained, is that the financial burden falls squarely on Americans.
Tariffs as Taxes on Americans
Dr. Paul began by pointing out that tariffs are essentially taxes collected from U.S. companies and individuals who import goods. These costs don’t vanish; businesses typically pass them along to consumers in the form of higher prices. Despite political claims that tariffs enrich the U.S. Treasury at foreign nations’ expense, the truth is that the money comes directly from American pockets.
He noted that while the government boasts about billions in revenue from tariffs, these funds come from domestic corporations and citizens. The Treasury can use this money for anything, from paying down debt to funding new programs, with no strings attached.
The Bigger Picture: Government Expansion
Chris Rossini added that the problem isn’t just tariffs—it’s the growing size of government. He recalled initial optimism about shrinking government bureaucracy, but said the trend quickly reversed, with deficits and government power expanding. Tariffs, he argued, are simply another tax layered on top of many others.
If tariffs were part of a broader effort to reduce government, they might be more tolerable. But instead, they come alongside policies that increase spending and expand central control over industries.
Corporatism and Central Planning
The conversation turned to what they see as an unhealthy alliance between big business and big government. They cited examples like the “golden share” arrangement in the Nippon Steel acquisition of U.S. Steel, where the administration secured influence over company decisions. Deals involving revenue shares from AI chip sales to China were also criticized as forms of central planning, where the government directly negotiates and profits from private business arrangements.
Dr. Paul and Rossini warned that such precedents—once set—are used by future administrations, regardless of party, to justify further interference in markets.
Free Market Principles Under Threat
Dr. Paul emphasized the importance of individual choice in trade. He illustrated with a simple example: if American-made shoes cost $100 and imported shoes from China cost $25, consumers should have the right to choose without government-imposed price hikes through tariffs. Tariffs distort markets, limit consumer freedom, and protect special interests at the expense of ordinary people.
Economic Consequences
Both hosts argued that tariffs ultimately harm the economy by increasing costs for consumers and businesses, contributing to deficits, and fostering an environment where government and corporate power are intertwined. This corporatism, they contend, is the opposite of free markets and individual liberty.
They also linked the tariff debate to broader fiscal issues: excessive government spending, military-industrial complex entanglements, and an erosion of personal liberties. Dr. Paul concluded that without cutting spending and adopting sound monetary policy, tariffs won’t solve the nation’s economic problems.
Conclusion
The key takeaway from their discussion is that tariffs are not paid by foreign governments—they are paid by Americans. While they may appear politically attractive, they act as hidden taxes on consumers and businesses, reduce market efficiency, and expand the power of government over the economy.
For advocates of limited government and free markets, the solution lies not in more tariffs, but in reducing government spending, eliminating corporate favoritism, and trusting individuals to make their own trade decisions.
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