Sen. Rand Paul (R-KY) isn't buying President Donald Trump's latest explanation for how tariffs will benefit Americans. In fact, he's calling out what he sees as a major contradiction.
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Tax Cuts to Soften Tariff Blow?
After Trump suggested cutting or even eliminating federal income taxes for Americans making under $200,000, Paul fired back on X. Quoting a headline from The Hill, Paul wrote, “Wasn't the pro-tariff crowd trying to tell us tariffs wouldn't increase the cost of goods? Sure seems like an admission…”
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In a Sunday post on Truth Social, Trump floated the idea of income tax relief as a way to soften the blow of his aggressive trade policies. “When Tariffs cut in, many people's Income Taxes will be substantially reduced, maybe even completely eliminated,” he wrote. “Focus will be on people making less than $200,000 a year.”
Paul has been critical of Trump's approach to trade for years, and he doubled down in recent interviews.
“It's backwards and upside down,” Paul told CNBC last month. “The fallacy is this: that somehow in a trade, someone must lose … that China's ripping you off or Japan's ripping you off.”
Paul Pushes Back on Tariff Logic
To Paul, trade is not a competition with winners and losers. It's cooperation. “Every trade that occurs in the marketplace is mutually beneficial,” he said. “If you want to sell me your coat and I give you $200 for it, we both agree to it and we're both happy with the trade.”
He added, “I have a trade deficit with my grocery store.”
Trump has leaned into a different view, framing international trade deficits as proof that the U.S. is being taken advantage of. “They ripped us off left and right. But now it's our turn to do the ripping,” he said at last month’s National Republican Congressional Committee dinner.
Paul isn't just poking holes in Trump's logic—he's also worried about the economic fallout. He said Trump's tariffs could hurt Americans' retirement savings and slow the economy. “The higher the trade deficits, the more prosperity. The lower the trade deficits, the less prosperity,” he said.
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He also blasted Trump's math behind the tariff rates. According to Paul, the administration's so-called “reciprocal” tariffs are based on flawed calculations.
Paul brought up Trump's frequent claim that Canada charges a 270% tariff on U.S. dairy products. “Well, you know what the real tariff is? Zero,” Paul said.
While polls show that the majority of Americans expect Trump's tariff policies to raise consumer prices, Trump maintains that his strategy is delivering results. He claims new factories and jobs are being created and calls the shift a “BONANZA FOR AMERICA.”
Paul, meanwhile, remains unconvinced. “We have to start talking about the truth,” he told CNBC.
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