Tariffs vs. Free Trade: Who Pays the Price?

In Episode 16, Tariffs are back in the news.

On February 1, 2025, the U.S. announced new tariffs on Canada and Mexico—only to delay them for 30 days. What does this mean for American businesses, workers, and consumers?

In this episode of Rubber Meets the Road Economics, Hunter Craig sits down with Professor Edwin T. Burton of the University of Virginia to discuss the broader economic implications of trade policy.

Professor Burton explains how free trade creates both winners and losers—boosting economic growth overall while disrupting certain industries. The challenge for policymakers, he argues, is not to block trade but to support those who are negatively affected. Using examples from U.S. history, he highlights why tariffs tend to raise prices for consumers, disproportionately impacting lower-income households.

The conversation also turns to the U.S. national debt, currently at $36 trillion and projected to hit $50 trillion in under a decade. Professor Burton explains why healthcare spending—not defense or Social Security—is the biggest driver of America’s debt problem and why economic reforms must address this issue first.

Finally, they discuss Social Security reform, with Professor Burton offering insights on how a defined contribution model could provide better retirement outcomes while keeping the system sustainable.

Disclaimer:

The information provided on this podcast is for educational and informational purposes only. It is not intended as financial advice and should not be relied upon as such. All opinions expressed by the hosts, guests, or participants are solely their own and do not reflect the views of any companies or organizations they may be affiliated with. We recommend consulting with a qualified financial professional before making any financial decisions. Remember, investing and financial decisions carry risks, and it is important to do your own research.

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Key Quotes from the Episode

📢 “Free trade is actually better for everyone—if you compensate the losers.” – Prof. Edwin T. Burton

📢 “Tariffs make all of us poorer, and the people who pay the highest price are lower-income consumers.” – Prof. Edwin T. Burton

📢 “If Detroit is threatened by competition, the right answer is not tariffs—it’s helping those who lose their jobs.” – Prof. Edwin T. Burton

📢 “The U.S. debt crisis is primarily a healthcare problem. If we don’t control healthcare costs, we won’t fix the debt.” – Prof. Edwin T. Burton

📢 “Social Security is fixable. Healthcare is the real challenge.” – Prof. Edwin T. Burton