How should I make my PTFE tube smaller?
I would advise buying a new tube for a few reasons:


PTFE tubes should be either 4 or 6 mm external diameter (for 1.75 or 3 mm filament respectively).  Chances are that if your external diameter is that much off from the nominal value, the inner diameter will also be inaccurate, and this could cause a lot of problems during printing, as the filament will likely bend slightly and unpredictably within the tube and the pressure in the nozzle will be unstable, as well as retraction may work inconsistently.
A non all-metal extruder is designed with the assumption that the inner and external sections of the PTFE tube are concentric.  This may or may not be the case for your tube, but it is likely that any hand-made modification to the tube will cause the above not to be true.
PTFE tubes are pretty cheap (around 2€ per metre or less, when bought online).


That said, should you still want to manually modify your tube, I would proceed like this (beware: untested!):


Insert the end of the tube onto a drill bit that fits snugly into it.
Insert the drill bit into a drill press or a drill held in a vice or otherwise immobilised.
Let the drill spin the bit/tube at a moderate speed
Move a piece of fine grit paper up and down the portion of the tube on the bit, trying to apply consistent pressure.
Check your progress with a caliper or a micrometer often, and reduce increase the grit while approaching the desired result.


Best luck! :)