April 7, 2025 • 27 mins
President Trump unilaterally declares the largest tax hike in almost 60 years with his so-called “Liberation Day” tariffs. These tariffs could significantly harm the economy and lead to a recession that the Democrats will use to seize back power for themselves. Why is Trump risking everything he’s fought for with these taxes? What’s the reasoning behind his actions? Will the tariffs be permanent, or are they negotiating tools? And will they protect American jobs, or destroy the economy?
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:00):
Today on The Conservative Rebel, President
Trump unilaterally declares thelargest tax hike in almost 60
years with his so-calledLiberation Day tariffs.
These tariffs couldsignificantly harm the economy
and lead to a recession that theDemocrats will use to seize back
power for themselves.
(00:22):
Why is Trump risking everythinghe's fought for with these
taxes?
What's the reasoning behind hisactions?
Will the tariffs be permanent orare they negotiating tools?
And do tariffs actually helpAmerica or harm it?
We'll talk about all of it todayon The Conservative Rebel.
(00:51):
Anyone who's listened to thispodcast in the past knows that I
hate to be a contrarian or aparty pooper.
I hate to be the bearer of badnews or the storm cloud raining
on people's parade.
I'm lying, of course.
I actually love doing all ofthose things.
They are literally the reasonthis podcast exists.
(01:11):
So today I am going to rain onthe tariff parade.
As you know, last Wednesday,President Trump declared that it
was Liberation Day in the UnitedStates.
Why?
In what way were we liberated?
Oh, we were liberated by thesingle largest tax increase
since 1968.
(01:33):
We will experience theliberation of higher prices,
more taxes, and more governmentinvolvement in our lives.
That's the type of liberationthat America is going to get.
I'm talking, of course, aboutthe tariffs that Trump
unconstitutionally declaredwithout the approval of
Congress, which is supposed tohave the sole power to raise
(01:56):
taxes on April 2nd.
Trump decreed that every singlenation on the face of the Earth
would face a tariff of at least10%, even if they have a trade
surplus with the United States,even if they have zero tariffs
on the United States.
And the tariffs were vastlyhigher than 10% on dozens of
(02:18):
different nations that have aso-called trade deficit with us.
And there's been a lot ofspeculation since then about
what precisely Trump'sintentions are with these
tariffs.
Some people have been saying,hopefully, that it's 4D chess.
They've been saying that Trumpis going to use these tariffs as
(02:40):
a negotiating tool to work withother countries to reduce
tariffs and create more freetrade.
That's certainly the outcome Ihope for.
Elon Musk came out recently andsaid that he's hoping to see the
US and Europe eliminate tariffsentirely with each other and
have free trade between the twocontinents.
(03:02):
That's what Elon Musk hopes willcome out of this situation.
If that was the case, then thesetariffs would not really be
anything to be concerned about.
But I think that unfortunately,Musk has a minority view within
Trump's inner circle.
Increasingly, it's looking likethe Trump administration
(03:22):
actually thinks these tariffsare a good thing for their own
sake.
It's looking like the Trumpadministration more or less
believes in the long-disproventheory that protectionist
tariffs create jobs and helpeconomic growth.
They believe in thelong-disproven theory that a
(03:44):
nation can tax itself intoprosperity.
Here, for example, is whatTrump's commerce secretary,
Howard Lutnick, had to say aboutit.
SPEAKER_01 (03:53):
Is the president considering postponing
implementation to negotiate?
SPEAKER_02 (03:58):
There is no postponing.
They are definitely going tostay in place for days and
weeks.
That is sort of obvious.
The president needs to resetglobal trade.
Everybody has a trade surplus,and we have a trade deficit.
We are paying away our futureand our lives.
The countries of the world areripping us off, and it's got to
end.
The president has made itcrystal, crystal clear.
(04:20):
This is the policy we are goingto protect.
The factories that come build inAmerica, we are going to protect
them.
They're going to be successful.
That's why they're going tobuild in America the greatest
economy in the earth.
Our economy is the consumer ofthe world.
We are the only one with a tradedeficit.
The rest of the world has atrade surplus.
Why does Europe have a tradesurplus?
(04:43):
Is there something about Europethat's special?
Seriously, are they a differentworld than we are?
Why are they selling$200 billiona year more to us?
It's because it's not fair.
The rules Unfortunately,
SPEAKER_00 (05:04):
according to Commerce Secretary Lutnick, the
goal of the tariffs isn't tonegotiate free trade with other
countries.
Instead, it's to protectAmerican industry and American
jobs, and to reset the balanceof global trade.
Now all of those sound like verygood things.
(05:24):
Who would be against protectingAmerican jobs?
Who would be against protectingAmerican manufacturing?
And this is the reason why somany on the right are blindly
celebrating these tariffs as agreat move by Trump, and they
will not question them.
They just won't.
Trump has nice-sounding reasonsfor wanting to do it.
(05:47):
But newsflash.
Politicians always, withoutexception, have nice sounding
reasons for everything they wantto do.
The question is, will theirpolicies actually do the thing
we're told they're supposed todo?
Will tariffs actually benefitthe United States?
(06:08):
The answer is absolutely not.
But before we can understandwhy, the first thing we need to
do is clear these muddy watersand debunk some of the common
misconceptions aboutinternational trade that
protectionists will seize on tomake their arguments for
tariffs.
Now, when Howard Lutnick saysAmerica has been ripped off by
(06:32):
trading with foreign countries,he's using what the great free
market economist Thomas Sowellcalled the zero-sum fallacy in
his book Economic Facts andFallacies.
The zero-sum fallacy is themistaken belief that when two
people or two nations freely andvoluntarily trade with one
(06:54):
another, one of them is a winnerand the other is a loser.
One of them is ripping the otheroff, and the other is being
ripped off.
In reality, every time peoplefreely and voluntarily trade
with each other, or entirenations freely and voluntarily
trade with each other, both ofthem are benefiting.
(07:17):
Otherwise, they wouldn't betrading at all.
For example, when you go get acoffee from your favorite
espresso stand, you're givingthe espresso stand money in
exchange for a coffee, and theespresso stand is giving you a
coffee in exchange for themoney.
Why is this happening?
Because you wanted the coffeemore than you wanted the money
(07:40):
you gave the people at theespresso stand.
And the people at the espressostand wanted the money you gave
them more than the coffee theygave you.
Both you and the espresso standgave up a thing you wanted less
in exchange for a thing youwanted more.
(08:01):
Both of you left the transactiona little better off than before
you made the transaction.
You might wish the espressostand didn't charge so much for
the coffee, but you stilldecided that you wanted the
coffee more than you wanted themoney.
That was your choice.
(08:22):
There weren't any winners, thereweren't any losers.
Both of you benefited.
If you didn't benefit from it,you wouldn't have made the trade
at all.
This is how the free market haslifted countless people from
complete poverty to a highstandard of living.
When transactions are madefreely and voluntarily, and the
(08:43):
government doesn't use theviolence and coercion of taxes
and regulations to interferewith the process, it's
inevitable that everyone willbenefit.
The same principle applies tointernational trade.
When two nations are freely andvoluntarily trading with each
other, both of them willbenefit, inevitably.
(09:05):
Neither nation is ripping theother one off, or killing its
jobs, or killing itsmanufacturing.
If that was happening, theywouldn't be trading with each
other in the first place.
Instead, what's happening?
Both of them are benefiting.
Both of them are giving upthings they want less for things
(09:27):
they want more.
There isn't a loser.
Instead, both countries arewinners.
Sounds remarkably simple.
Sounds remarkably obvious.
That's because it is.
It's really insane that somepeople just do not get this.
Now, protectionists will respondto this.
(09:48):
And when I say protectionist, Imean people who want tariffs.
They'll respond and they'llclaim that while this might make
sense in theory, obviously it'snot working because America has
a trade deficit with othercountries.
They snatch up their statisticsabout trade deficits and proudly
wave them in our faces likethey're somehow proof that we're
(10:11):
wrong and America is in factgetting ripped off by free
trade.
And a lot of people seem tothink that that trade deficit
argument is somehow conclusive.
No one seems to ask theprotectionists the obvious
question.
So what?
so what we have a trade deficitreturning to the espresso stand
(10:35):
analogy you have a trade deficitwith your local espresso stand
you buy coffee from them andchances are very good the people
working there will never everbuy anything from you Does that
mean that they're somehowripping you off by selling you
coffee when they don't plan tobuy things from you in return?
(10:57):
Does it mean they're evilstammers and con artists who are
nefariously stealing your moneyand making you poorer?
No, of course it doesn't.
The idea is ridiculous.
Again, both you and the espressostand are giving up what you
want less for what you wantmore.
Both you and the espresso standare benefiting each and every
(11:22):
time you freely choose to tradewith each other.
This is how your relationshipwith almost every business you
have ever bought anything fromin your life works.
Every last one of thosebusinesses, maybe there's one or
two rare exceptions, have neverbought anything from you ever.
(11:46):
You've probably bought tens ofthousands of dollars worth of
things over the course of yourlife from Amazon.
And Amazon, I'm willing to bet,has never ever bought anything
from you.
By the very logic that theseprotectionists are using to
justify tariffs, you must havebeen scammed out of tens of
(12:07):
thousands of dollars by Amazon.
In reality, you freely choose tokeep buying things from Amazon
because you see a benefit in it.
You see a benefit in gettingwhat you order delivered to your
door within 48 hours of clickingthe buy button so you keep
buying stuff from Amazon.
(12:29):
Time and time again, you keepdoing it, even though Jeff Bezos
has never showed up to your doorand bought anything from you.
And just so we're clear, I don'tlike Amazon.
It's woke, but I don't claimthat it's scamming people out of
their money.
It's giving them precisely whatthey asked for.
Same exact thing when othercountries trade with each other.
(12:53):
When there's free trade betweentwo countries, both of them will
inevitably become richer andmore prosperous because of it.
Now that we understand why freetrade is undeniably a good
thing, we need to get into theincredible damage that these
tariffs can cause to ourcountry.
(13:15):
First of all, tariffs raiseprices, and they can raise
prices dramatically.
No one denies that.
Not even the protectionists.
In fact, that's precisely whatthe tariffs are meant to do.
The tariffs are meant to makeimported goods far more
(13:36):
expensive than they are, soconsumers are forced to buy
American goods instead.
That is literally the entirepoint of these tariffs.
When Howard Lutnick or DonaldTrump say these tariffs are
going to protect Americanmanufacturing, they're really
(13:57):
saying that they will makeeverything produced in foreign
factories far more expensive soyou're forced to buy things made
in America.
When they say these tariffs aregoing to protect American jobs,
what they're really saying isthat the tariffs will make
everything produced with foreignlabor so much more expensive
(14:19):
that people will be forced tobuy things made by American
workers.
And it's undeniable that somecompanies and some workers and
some industries will benefitgreatly from these tariffs.
You're not going to hear me denythat.
But what's also undeniable isthat these companies, these
(14:42):
workers, and these industrieswill only be benefiting at the
expense of everyone else.
Always remember that governmentis a parasitic institution.
it's necessary but it isparasitic fundamentally it's not
like a plant where it makes itsown food from the sun with
(15:05):
photosynthesis it's like afungus growing on a tree sucking
the life out of the tree so thatit can survive Government can't
create any job withoutdestroying a job.
The government can't help a partof the economy without hurting
another part of the economy.
(15:27):
It can't create money withoutdestroying the value of money.
It can't give anyone anything itdidn't first take from someone
else, to paraphrase HenryHaslip.
A lot of people on the right whorecognize this as a general
principle seem to think itsomehow doesn't apply with
(15:47):
tariffs.
They think tariffs are a way forthe government to create wealth
out of nothing, to create jobsout of nothing, to speak
prosperity into existence.
In his book, Economics in OneLesson, the economist Henry
Hazlitt used the example of atariff on British sweaters to
(16:10):
illustrate why this is false.
A British company can afford tosell sweaters it imports into
the United States at$5 cheaperthan an American company can
afford to sell them, in hisanalogy.
Because the British sweater ischeaper, more people are buying
(16:30):
it than are buying the Americansweater.
So the government implements atariff of$5 on the British
sweaters, so they'll be the sameprice as the American sweaters.
Now everyone is buying theAmerican sweaters instead,
because they're the same priceor they're even cheaper, which
(16:51):
is allowing the American sweatercompany to hire new people and
create new jobs in the USA.
On the surface, it looks likethe tariff created good-paying
American jobs— Everyone feelsgood and patriotic.
But in reality, because all theAmericans who bought sweaters
(17:11):
had to pay$5 more than theywould have without the tariff,
all of them have$5 less to spendon all kinds of other things
throughout the economy.
Those businesses and thoseindustries run in America by
Americans will now have lessmoney to use to expand their
(17:33):
businesses, to hire new people,or even to For every job created
in the American sweaterindustry, a job will be lost in
(17:56):
another industry.
This is how tariffs always work.
They can have wonderful effectson certain businesses and
certain industries, but in thelong run they cause far more
harm than they do good.
Now, I understand that thisanalogy does not fit this
(18:16):
situation perfectly.
President Trump is not levyingtariffs on specific industries,
he is just doing general tariffson all countries everywhere.
But it has the same effect, itwill increase the price of
foreign goods.
And a lot of the advocates ofthese tariffs will say, well,
(18:39):
you don't have to worry aboutthe tariffs.
You won't be affected by thetariffs as long as you buy
American.
But, yeah.
Duh, obviously.
No one's denying that.
No one is denying that.
What we are saying is that youare eliminating our choices.
(19:00):
You are eliminating consumerchoice.
You are forcing people to buythings at more expensive prices.
Yes, if we buy the moreexpensive thing, the more
expensive thing won't be mademore expensive because of the
tariff.
That's not our point.
The point is that now...
(19:20):
because of the tariff, we haveto buy the more expensive thing
because it's the same price orit's cheaper than the thing that
would have been less expensivewithout the tariff.
So the people who say thattariffs are a tax on American
consumers are not technicallyright in the strictest sense of
(19:40):
the word.
American consumers will not haveto pay any tax money to the
government.
They will, however, be forced topay higher prices to buy the
goods that they could havegotten cheaper because these
international corporations aregetting taxed.
So tariffs are not as or asharmful or as tyrannical attacks
(20:05):
as the income tax, for example,but they are still a tax.
They are still harmful.
So if Trump keeps these tariffs,like Howard Lutnick is seeming
to imply he's going to do, buthe doesn't cut the income tax
significantly or abolish it,which I hope he does...
(20:30):
then these will be very, verybad for the economy.
This will be very, very bad forthe middle class.
This could cause a recessionthat could even be worse than
what we had under Biden.
I understand that we're stillnot completely out of that yet,
but this is going to makeeverything worse.
(20:51):
That's why the stock market hasjust been in complete panic
since this happened.
It's because they understandthat tariffs Tariffs are very
bad for the economy.
You know, a historical exampleof this is the Smoot-Hawley
Tariff.
I don't know if I'm pronouncingthat right.
I sure hope I am.
(21:11):
But it was passed in the 1930safter the stock market crash in
1929 to try to lift back up theAmerican economy, to try to stop
the Great Depression fromgetting as bad as it did.
It had the opposite effect.
(21:32):
President Hoover signed it intolaw.
Lots of economists wrote himletters urging him, do not do
this.
This will make everything worse.
He refused to listen because hewas beholden to the same
protectionist fallacies thatTrump has apparently fallen into
the trap of believing in.
And what do you know?
(21:53):
Everything got way, way worse.
And that destroyed HerbertHoover's administration.
Since the Depression got so bad,everyone voted for socialist
dictator Franklin D.
Roosevelt, who replaced him.
We have a similar story with JoeBiden.
Of course, I don't think Trumpis a socialist dictator,
(22:15):
obviously.
But I'm meaning it's the samekind of story in the sense that
a very bad economy under onepresident led to the election of
Donald Trump.
So Donald Trump is literallyrisking everything he has
thought for.
The entire MAGA agenda.
Everything he has done that hasbeen very good.
(22:38):
You know this.
You know I've been supportive ofmost of what he's done.
He's risking all of that on thisstupid tariff thing.
Because if the economy goesdown, the Democrats are going to
seize on this.
It's going to be a murder.
We are going to lose the housedecisively.
(22:59):
We are going to lose control ofthe government if the economy
tanks, and there is a very realpossibility that that could
happen.
So by doing this crazy tariffthing, Trump is handing the
Democrats a talking point thatisn't completely insane.
(23:19):
All of their other talkingpoints are completely deranged
and insane.
If it weren't for these tariffs,they'd have nothing remotely
sane and sensible to run on inthis election.
they would have pretty much nohope in 2026 and in 2028 to run
(23:39):
on anything that made any senseto normal, independent,
functional voters.
They'd cry about Elon Musk'sevil plan to save taxpayers'
money.
They'd cry about all thewonderful members of our amazing
LGBTQIA2SPDAA-plus communitywhose dreams of being Marines
(24:02):
have been crushed by Trump.
They'd cry about all the poorlittle doe-eyed MS-13 terrorists
and murderers who had to go onthe scary airplane to a scary,
scary place run by mean, scaryguards who aren't very nice to
them.
What else are they going to talkabout but that?
(24:23):
No one would care.
No one would care about any ofit.
Especially if we have some dorklike Tim Walls or Kamala Harris
running.
It would be a murder in ourdirection.
We would crush them.
But Trump is throwing theselunatics...
a golden opportunity.
He's throwing them a thing theycan actually talk about, and
(24:46):
they will be right on it.
You're already seeing thishappen.
You're already seeing HakeemJeffries.
Did he?
I don't know if you saw theclip, he is practically giddy
that he finally has this thingto talk about.
Democrats everywhere are talkingabout how Liberation Day is the
(25:08):
increase in prices day.
It's already happening.
We're already giving theDemocrats their talking point.
It's insane.
There is some hope, though,fortunately.
There are a lot of Republicanswho are already, they understand
this, they understand that ifthey associate with this
(25:30):
madness, they are going to getkilled in the next election.
So people like Rand Paul and TedCruz and many others are already
coming out against this tariff.
They're saying that they wouldsupport it, like I would, like
every sensible person would,only as a way to reduce tariffs,
(25:52):
only as a way to secure freetrade agreements with other
countries.
And we know we have Elon Musk,who is a voice of sanity in the
White House on this issue.
He's made his opinion known, aswe already talked about.
So there is some hope that Trumpwill see that the stock market
(26:12):
is freaking out, he will seethat this is going to solve
nothing and make everythingworse, and he will learn from
this and he will take back thesetariffs.
Lots of countries, dozens ofcountries, have already
contacted him, and they'retrying to figure out what's
(26:33):
going on and trying to avert atrade war so there is a very
honorable way Trump can back outof this and save face.
He can just...
negotiate some free tradeagreements, even if that wasn't
the original plan with thesecountries, and he can minimize
the political damage, he can dosome damage control, and back
(26:56):
out of this and save theRepublicans' political future.
But we don't need to get tooahead of ourselves.
For now, these tariffs are agood reminder that just because
our guy is in the White Housedoesn't mean we get to sit back
and relax and assumeeverything's going to be great.
(27:18):
If you want to stay free, you'renot allowed to do that.
I'm sorry, you just can't.
As Thomas Jefferson famouslysaid,"...the price of liberty is
eternal vigilance." We mustalways be vigilant, always be
watching, always suspect thosewho hold political power over
(27:39):
us.
And these tariffs are amuch-needed reminder of the
truth of Jefferson's words.
Today on The Conservative Rebel, President
Trump unilaterally declares thelargest tax hike in almost 60
years with his so-calledLiberation Day tariffs.
These tariffs couldsignificantly harm the economy
and lead to a recession that theDemocrats will use to seize back
power for themselves.
(00:22):
Why is Trump risking everythinghe's fought for with these
taxes?
What's the reasoning behind hisactions?
Will the tariffs be permanent orare they negotiating tools?
And do tariffs actually helpAmerica or harm it?
We'll talk about all of it todayon The Conservative Rebel.
(00:51):
Anyone who's listened to thispodcast in the past knows that I
hate to be a contrarian or aparty pooper.
I hate to be the bearer of badnews or the storm cloud raining
on people's parade.
I'm lying, of course.
I actually love doing all ofthose things.
They are literally the reasonthis podcast exists.
(01:11):
So today I am going to rain onthe tariff parade.
As you know, last Wednesday,President Trump declared that it
was Liberation Day in the UnitedStates.
Why?
In what way were we liberated?
Oh, we were liberated by thesingle largest tax increase
since 1968.
(01:33):
We will experience theliberation of higher prices,
more taxes, and more governmentinvolvement in our lives.
That's the type of liberationthat America is going to get.
I'm talking, of course, aboutthe tariffs that Trump
unconstitutionally declaredwithout the approval of
Congress, which is supposed tohave the sole power to raise
(01:56):
taxes on April 2nd.
Trump decreed that every singlenation on the face of the Earth
would face a tariff of at least10%, even if they have a trade
surplus with the United States,even if they have zero tariffs
on the United States.
And the tariffs were vastlyhigher than 10% on dozens of
(02:18):
different nations that have aso-called trade deficit with us.
And there's been a lot ofspeculation since then about
what precisely Trump'sintentions are with these
tariffs.
Some people have been saying,hopefully, that it's 4D chess.
They've been saying that Trumpis going to use these tariffs as
(02:40):
a negotiating tool to work withother countries to reduce
tariffs and create more freetrade.
That's certainly the outcome Ihope for.
Elon Musk came out recently andsaid that he's hoping to see the
US and Europe eliminate tariffsentirely with each other and
have free trade between the twocontinents.
(03:02):
That's what Elon Musk hopes willcome out of this situation.
If that was the case, then thesetariffs would not really be
anything to be concerned about.
But I think that unfortunately,Musk has a minority view within
Trump's inner circle.
Increasingly, it's looking likethe Trump administration
(03:22):
actually thinks these tariffsare a good thing for their own
sake.
It's looking like the Trumpadministration more or less
believes in the long-disproventheory that protectionist
tariffs create jobs and helpeconomic growth.
They believe in thelong-disproven theory that a
(03:44):
nation can tax itself intoprosperity.
Here, for example, is whatTrump's commerce secretary,
Howard Lutnick, had to say aboutit.
SPEAKER_01 (03:53):
Is the president considering postponing
implementation to negotiate?
SPEAKER_02 (03:58):
There is no postponing.
They are definitely going tostay in place for days and
weeks.
That is sort of obvious.
The president needs to resetglobal trade.
Everybody has a trade surplus,and we have a trade deficit.
We are paying away our futureand our lives.
The countries of the world areripping us off, and it's got to
end.
The president has made itcrystal, crystal clear.
(04:20):
This is the policy we are goingto protect.
The factories that come build inAmerica, we are going to protect
them.
They're going to be successful.
That's why they're going tobuild in America the greatest
economy in the earth.
Our economy is the consumer ofthe world.
We are the only one with a tradedeficit.
The rest of the world has atrade surplus.
Why does Europe have a tradesurplus?
(04:43):
Is there something about Europethat's special?
Seriously, are they a differentworld than we are?
Why are they selling$200 billiona year more to us?
It's because it's not fair.
The rules Unfortunately,
SPEAKER_00 (05:04):
according to Commerce Secretary Lutnick, the
goal of the tariffs isn't tonegotiate free trade with other
countries.
Instead, it's to protectAmerican industry and American
jobs, and to reset the balanceof global trade.
Now all of those sound like verygood things.
(05:24):
Who would be against protectingAmerican jobs?
Who would be against protectingAmerican manufacturing?
And this is the reason why somany on the right are blindly
celebrating these tariffs as agreat move by Trump, and they
will not question them.
They just won't.
Trump has nice-sounding reasonsfor wanting to do it.
(05:47):
But newsflash.
Politicians always, withoutexception, have nice sounding
reasons for everything they wantto do.
The question is, will theirpolicies actually do the thing
we're told they're supposed todo?
Will tariffs actually benefitthe United States?
(06:08):
The answer is absolutely not.
But before we can understandwhy, the first thing we need to
do is clear these muddy watersand debunk some of the common
misconceptions aboutinternational trade that
protectionists will seize on tomake their arguments for
tariffs.
Now, when Howard Lutnick saysAmerica has been ripped off by
(06:32):
trading with foreign countries,he's using what the great free
market economist Thomas Sowellcalled the zero-sum fallacy in
his book Economic Facts andFallacies.
The zero-sum fallacy is themistaken belief that when two
people or two nations freely andvoluntarily trade with one
(06:54):
another, one of them is a winnerand the other is a loser.
One of them is ripping the otheroff, and the other is being
ripped off.
In reality, every time peoplefreely and voluntarily trade
with each other, or entirenations freely and voluntarily
trade with each other, both ofthem are benefiting.
(07:17):
Otherwise, they wouldn't betrading at all.
For example, when you go get acoffee from your favorite
espresso stand, you're givingthe espresso stand money in
exchange for a coffee, and theespresso stand is giving you a
coffee in exchange for themoney.
Why is this happening?
Because you wanted the coffeemore than you wanted the money
(07:40):
you gave the people at theespresso stand.
And the people at the espressostand wanted the money you gave
them more than the coffee theygave you.
Both you and the espresso standgave up a thing you wanted less
in exchange for a thing youwanted more.
(08:01):
Both of you left the transactiona little better off than before
you made the transaction.
You might wish the espressostand didn't charge so much for
the coffee, but you stilldecided that you wanted the
coffee more than you wanted themoney.
That was your choice.
(08:22):
There weren't any winners, thereweren't any losers.
Both of you benefited.
If you didn't benefit from it,you wouldn't have made the trade
at all.
This is how the free market haslifted countless people from
complete poverty to a highstandard of living.
When transactions are madefreely and voluntarily, and the
(08:43):
government doesn't use theviolence and coercion of taxes
and regulations to interferewith the process, it's
inevitable that everyone willbenefit.
The same principle applies tointernational trade.
When two nations are freely andvoluntarily trading with each
other, both of them willbenefit, inevitably.
(09:05):
Neither nation is ripping theother one off, or killing its
jobs, or killing itsmanufacturing.
If that was happening, theywouldn't be trading with each
other in the first place.
Instead, what's happening?
Both of them are benefiting.
Both of them are giving upthings they want less for things
(09:27):
they want more.
There isn't a loser.
Instead, both countries arewinners.
Sounds remarkably simple.
Sounds remarkably obvious.
That's because it is.
It's really insane that somepeople just do not get this.
Now, protectionists will respondto this.
(09:48):
And when I say protectionist, Imean people who want tariffs.
They'll respond and they'llclaim that while this might make
sense in theory, obviously it'snot working because America has
a trade deficit with othercountries.
They snatch up their statisticsabout trade deficits and proudly
wave them in our faces likethey're somehow proof that we're
(10:11):
wrong and America is in factgetting ripped off by free
trade.
And a lot of people seem tothink that that trade deficit
argument is somehow conclusive.
No one seems to ask theprotectionists the obvious
question.
So what?
so what we have a trade deficitreturning to the espresso stand
(10:35):
analogy you have a trade deficitwith your local espresso stand
you buy coffee from them andchances are very good the people
working there will never everbuy anything from you Does that
mean that they're somehowripping you off by selling you
coffee when they don't plan tobuy things from you in return?
(10:57):
Does it mean they're evilstammers and con artists who are
nefariously stealing your moneyand making you poorer?
No, of course it doesn't.
The idea is ridiculous.
Again, both you and the espressostand are giving up what you
want less for what you wantmore.
Both you and the espresso standare benefiting each and every
(11:22):
time you freely choose to tradewith each other.
This is how your relationshipwith almost every business you
have ever bought anything fromin your life works.
Every last one of thosebusinesses, maybe there's one or
two rare exceptions, have neverbought anything from you ever.
(11:46):
You've probably bought tens ofthousands of dollars worth of
things over the course of yourlife from Amazon.
And Amazon, I'm willing to bet,has never ever bought anything
from you.
By the very logic that theseprotectionists are using to
justify tariffs, you must havebeen scammed out of tens of
(12:07):
thousands of dollars by Amazon.
In reality, you freely choose tokeep buying things from Amazon
because you see a benefit in it.
You see a benefit in gettingwhat you order delivered to your
door within 48 hours of clickingthe buy button so you keep
buying stuff from Amazon.
(12:29):
Time and time again, you keepdoing it, even though Jeff Bezos
has never showed up to your doorand bought anything from you.
And just so we're clear, I don'tlike Amazon.
It's woke, but I don't claimthat it's scamming people out of
their money.
It's giving them precisely whatthey asked for.
Same exact thing when othercountries trade with each other.
(12:53):
When there's free trade betweentwo countries, both of them will
inevitably become richer andmore prosperous because of it.
Now that we understand why freetrade is undeniably a good
thing, we need to get into theincredible damage that these
tariffs can cause to ourcountry.
(13:15):
First of all, tariffs raiseprices, and they can raise
prices dramatically.
No one denies that.
Not even the protectionists.
In fact, that's precisely whatthe tariffs are meant to do.
The tariffs are meant to makeimported goods far more
(13:36):
expensive than they are, soconsumers are forced to buy
American goods instead.
That is literally the entirepoint of these tariffs.
When Howard Lutnick or DonaldTrump say these tariffs are
going to protect Americanmanufacturing, they're really
(13:57):
saying that they will makeeverything produced in foreign
factories far more expensive soyou're forced to buy things made
in America.
When they say these tariffs aregoing to protect American jobs,
what they're really saying isthat the tariffs will make
everything produced with foreignlabor so much more expensive
(14:19):
that people will be forced tobuy things made by American
workers.
And it's undeniable that somecompanies and some workers and
some industries will benefitgreatly from these tariffs.
You're not going to hear me denythat.
But what's also undeniable isthat these companies, these
(14:42):
workers, and these industrieswill only be benefiting at the
expense of everyone else.
Always remember that governmentis a parasitic institution.
it's necessary but it isparasitic fundamentally it's not
like a plant where it makes itsown food from the sun with
(15:05):
photosynthesis it's like afungus growing on a tree sucking
the life out of the tree so thatit can survive Government can't
create any job withoutdestroying a job.
The government can't help a partof the economy without hurting
another part of the economy.
(15:27):
It can't create money withoutdestroying the value of money.
It can't give anyone anything itdidn't first take from someone
else, to paraphrase HenryHaslip.
A lot of people on the right whorecognize this as a general
principle seem to think itsomehow doesn't apply with
(15:47):
tariffs.
They think tariffs are a way forthe government to create wealth
out of nothing, to create jobsout of nothing, to speak
prosperity into existence.
In his book, Economics in OneLesson, the economist Henry
Hazlitt used the example of atariff on British sweaters to
(16:10):
illustrate why this is false.
A British company can afford tosell sweaters it imports into
the United States at$5 cheaperthan an American company can
afford to sell them, in hisanalogy.
Because the British sweater ischeaper, more people are buying
(16:30):
it than are buying the Americansweater.
So the government implements atariff of$5 on the British
sweaters, so they'll be the sameprice as the American sweaters.
Now everyone is buying theAmerican sweaters instead,
because they're the same priceor they're even cheaper, which
(16:51):
is allowing the American sweatercompany to hire new people and
create new jobs in the USA.
On the surface, it looks likethe tariff created good-paying
American jobs— Everyone feelsgood and patriotic.
But in reality, because all theAmericans who bought sweaters
(17:11):
had to pay$5 more than theywould have without the tariff,
all of them have$5 less to spendon all kinds of other things
throughout the economy.
Those businesses and thoseindustries run in America by
Americans will now have lessmoney to use to expand their
(17:33):
businesses, to hire new people,or even to For every job created
in the American sweaterindustry, a job will be lost in
(17:56):
another industry.
This is how tariffs always work.
They can have wonderful effectson certain businesses and
certain industries, but in thelong run they cause far more
harm than they do good.
Now, I understand that thisanalogy does not fit this
(18:16):
situation perfectly.
President Trump is not levyingtariffs on specific industries,
he is just doing general tariffson all countries everywhere.
But it has the same effect, itwill increase the price of
foreign goods.
And a lot of the advocates ofthese tariffs will say, well,
(18:39):
you don't have to worry aboutthe tariffs.
You won't be affected by thetariffs as long as you buy
American.
But, yeah.
Duh, obviously.
No one's denying that.
No one is denying that.
What we are saying is that youare eliminating our choices.
(19:00):
You are eliminating consumerchoice.
You are forcing people to buythings at more expensive prices.
Yes, if we buy the moreexpensive thing, the more
expensive thing won't be mademore expensive because of the
tariff.
That's not our point.
The point is that now...
(19:20):
because of the tariff, we haveto buy the more expensive thing
because it's the same price orit's cheaper than the thing that
would have been less expensivewithout the tariff.
So the people who say thattariffs are a tax on American
consumers are not technicallyright in the strictest sense of
(19:40):
the word.
American consumers will not haveto pay any tax money to the
government.
They will, however, be forced topay higher prices to buy the
goods that they could havegotten cheaper because these
international corporations aregetting taxed.
So tariffs are not as or asharmful or as tyrannical attacks
(20:05):
as the income tax, for example,but they are still a tax.
They are still harmful.
So if Trump keeps these tariffs,like Howard Lutnick is seeming
to imply he's going to do, buthe doesn't cut the income tax
significantly or abolish it,which I hope he does...
(20:30):
then these will be very, verybad for the economy.
This will be very, very bad forthe middle class.
This could cause a recessionthat could even be worse than
what we had under Biden.
I understand that we're stillnot completely out of that yet,
but this is going to makeeverything worse.
(20:51):
That's why the stock market hasjust been in complete panic
since this happened.
It's because they understandthat tariffs Tariffs are very
bad for the economy.
You know, a historical exampleof this is the Smoot-Hawley
Tariff.
I don't know if I'm pronouncingthat right.
I sure hope I am.
(21:11):
But it was passed in the 1930safter the stock market crash in
1929 to try to lift back up theAmerican economy, to try to stop
the Great Depression fromgetting as bad as it did.
It had the opposite effect.
(21:32):
President Hoover signed it intolaw.
Lots of economists wrote himletters urging him, do not do
this.
This will make everything worse.
He refused to listen because hewas beholden to the same
protectionist fallacies thatTrump has apparently fallen into
the trap of believing in.
And what do you know?
(21:53):
Everything got way, way worse.
And that destroyed HerbertHoover's administration.
Since the Depression got so bad,everyone voted for socialist
dictator Franklin D.
Roosevelt, who replaced him.
We have a similar story with JoeBiden.
Of course, I don't think Trumpis a socialist dictator,
(22:15):
obviously.
But I'm meaning it's the samekind of story in the sense that
a very bad economy under onepresident led to the election of
Donald Trump.
So Donald Trump is literallyrisking everything he has
thought for.
The entire MAGA agenda.
Everything he has done that hasbeen very good.
(22:38):
You know this.
You know I've been supportive ofmost of what he's done.
He's risking all of that on thisstupid tariff thing.
Because if the economy goesdown, the Democrats are going to
seize on this.
It's going to be a murder.
We are going to lose the housedecisively.
(22:59):
We are going to lose control ofthe government if the economy
tanks, and there is a very realpossibility that that could
happen.
So by doing this crazy tariffthing, Trump is handing the
Democrats a talking point thatisn't completely insane.
(23:19):
All of their other talkingpoints are completely deranged
and insane.
If it weren't for these tariffs,they'd have nothing remotely
sane and sensible to run on inthis election.
they would have pretty much nohope in 2026 and in 2028 to run
(23:39):
on anything that made any senseto normal, independent,
functional voters.
They'd cry about Elon Musk'sevil plan to save taxpayers'
money.
They'd cry about all thewonderful members of our amazing
LGBTQIA2SPDAA-plus communitywhose dreams of being Marines
(24:02):
have been crushed by Trump.
They'd cry about all the poorlittle doe-eyed MS-13 terrorists
and murderers who had to go onthe scary airplane to a scary,
scary place run by mean, scaryguards who aren't very nice to
them.
What else are they going to talkabout but that?
(24:23):
No one would care.
No one would care about any ofit.
Especially if we have some dorklike Tim Walls or Kamala Harris
running.
It would be a murder in ourdirection.
We would crush them.
But Trump is throwing theselunatics...
a golden opportunity.
He's throwing them a thing theycan actually talk about, and
(24:46):
they will be right on it.
You're already seeing thishappen.
You're already seeing HakeemJeffries.
Did he?
I don't know if you saw theclip, he is practically giddy
that he finally has this thingto talk about.
Democrats everywhere are talkingabout how Liberation Day is the
(25:08):
increase in prices day.
It's already happening.
We're already giving theDemocrats their talking point.
It's insane.
There is some hope, though,fortunately.
There are a lot of Republicanswho are already, they understand
this, they understand that ifthey associate with this
(25:30):
madness, they are going to getkilled in the next election.
So people like Rand Paul and TedCruz and many others are already
coming out against this tariff.
They're saying that they wouldsupport it, like I would, like
every sensible person would,only as a way to reduce tariffs,
(25:52):
only as a way to secure freetrade agreements with other
countries.
And we know we have Elon Musk,who is a voice of sanity in the
White House on this issue.
He's made his opinion known, aswe already talked about.
So there is some hope that Trumpwill see that the stock market
(26:12):
is freaking out, he will seethat this is going to solve
nothing and make everythingworse, and he will learn from
this and he will take back thesetariffs.
Lots of countries, dozens ofcountries, have already
contacted him, and they'retrying to figure out what's
(26:33):
going on and trying to avert atrade war so there is a very
honorable way Trump can back outof this and save face.
He can just...
negotiate some free tradeagreements, even if that wasn't
the original plan with thesecountries, and he can minimize
the political damage, he can dosome damage control, and back
(26:56):
out of this and save theRepublicans' political future.
But we don't need to get tooahead of ourselves.
For now, these tariffs are agood reminder that just because
our guy is in the White Housedoesn't mean we get to sit back
and relax and assumeeverything's going to be great.
(27:18):
If you want to stay free, you'renot allowed to do that.
I'm sorry, you just can't.
As Thomas Jefferson famouslysaid,"...the price of liberty is
eternal vigilance." We mustalways be vigilant, always be
watching, always suspect thosewho hold political power over
(27:39):
us.
And these tariffs are amuch-needed reminder of the
truth of Jefferson's words.
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