Skip to main content

tv   Commerce Sec. Ross on Aluminum Steel Tariffs - Part 1  CSPAN  March 23, 2018 2:01am-4:09am EDT

2:01 am
sunday on c-span's "q&a," yale university law school professor amy chua talks about her book "political tribes." >> my book calls for overcoming political tribalism. we need to be able to talk to each other as americans again and not just say, oh, you're the evil ones. you know, it used to be that other people on the other side of the political divide were just people that we disagreed with. now it's almost like the people who voted for the other candidate are immoral, they're our enemies, they're not even real americans anymore, and this -- because i study really democracies around the world, places like libya, i mean, libya, what's the difference between libya and the united states? libya is a multiethnic country, too, 140 different peoples. it's a failed state. it's disintegrated. why? because it doesn't have that overarching strong libyan
2:02 am
identity strong enough to hold the country together. it was really a colonial construction. but we do. this is what makes us special. >> "q&a," sunday night at 8:00 eastern on c-span. commerce secretary wilbur ross appeared before the house ways and means committee to discuss trade actions by the trump administration, particularly the recent ordering of new steel and aluminum tariffs. also, he talked about the process for u.s. companies to receive exclusions from the tariffs that use steel and aluminum within the u.s. >> committee will come to order. good morning. today, our committee is honored to welcome commerce secretary wilbur ross to testify on recent trade actions, particularly
2:03 am
section 232, determinations on steel and aluminum. mr. secretary, thank you for joining us. we look forward to your testimony, which is very timely with tariffs set to take effect on steel and aluminum tomorrow. congress takes our constitutionally mandated oversight role over trade policy very seriously. i've had the opportunity to exchange views with you, with president trump and other administration officials recently, on our shared urgent priority of addressing global overcapacity in aluminum and steel. several members of this committee addressed that point in our hearing with ambassador lighthizer yet. we applaud the president for his leadership in insisting that we address this problem, and we know you have a key role. we're committing to working closely with you and the president to make sure we hit the target by dealing with the root problem of china's persistent distortive policies while minimizing collateral damage to our economy. mr. secretary, your vast experience in international
2:04 am
business, particularly in steel sector, have prepared you well. you understand the complexity of modern supply chains. we must take into account when considering how any enforcement action will affect every part of our economy. as you know, 108 house republicans joined chairman reichert in me in writing president trump shortly before the president's proclamations were issued to urge him to take a targeted approach on any tariffs. we continue to highlight several priorities. keeping tariffs targeted so they don't affect fairly traded products or products that don't pose a national security threat. using a process to allow u.s. companies to petition for and promptly obtain exclusions unavailable from u.s. sources or that don't pose a national security threat. grandfathering existing contracts so we don't unfairly drive up costs of projects underway. reviewing tariffs on the short-term basis to consider if a different approach would better serve the u.s. national
2:05 am
interests. and, of course, setting a termination date. i welcome the president's commitment to flexibility and cooperation toward our allies that trade fairly, the exclusion of canada and mexico is an important first step in such flexibility and one we strongly support. we can't jeopardize our ability to be -- incentivize other countries to cooperate on addressing our shared concerns with china. we don't want to encourage the other countries to restrict our american exports. instead, we have to tailor these tariffs so americans have certainty as they continue to trade fairly, sell american-made products to commer products to customers all over the world and hire more workers here at home. in particular, as these tariffs go into effect tomorrow, i urge you to allow consolidation of petitions. retroactive application of
2:06 am
exclusions to the date the petition was filed. an exclusion period beyond the one you set out in your rules. i also oppose increasing tariffs on other products and countries as exclusions are made. these tariffs should be in place for the absolute minimum period. their effectiveness should be constantly studied. they should be sunset after a year. if they're not having the effect you intend, we should assess whether or not another policy would be more effective in continuing them. tariffs are taxes, plain and simple, on american jobs, traders and consumers. their scope and drags should never succeed what's needed to accomplish their goal. along those lines, i also want to address a -- just as the administration is with china's blatant theft of america's intellectual property and increasingly devious ways in which it steals or otherwise obtains our very best technology. but we need the right remedy.
2:07 am
not one that punishes american, families, workers and small businesses by putting new taxes on the products they buy. we don't want to punish americans for china's misbehavior. at the very least, i urge the administration to provide a strong opportunity for public comment, so the effective tariffs on our economy can be properly assessed. that would allow us to design our policies to hit the right target, china, not americans, who are dependent on us to look out for them. in 2015, congress passed strong new trade enforcement tools. i'm very encouraged to see the president's dedication to strict enforcement of trade rules by putting into action these new enforcement tools passed by congress, including by ensuring u.s. industries can benefit from trade remedy laws and we can address sir come vengeance and evasion of trade orders. i look forward to continuing our
2:08 am
work together on a pro-growth agenda that grows jobs and paychecks. we've already had great success in improving the lives of all americans through tax cuts and balanced regulation. we have to build on this access with an ambitious pro-growth agenda, that doesn't only allow us to buy american, but sell american all throughout the world. mr. secretary, we look forward to your testimony. i'll yield to mr. neil for the purposes of his opening statement. >> thank you, mr. chairman. today's hearing is an opportunity for us to hear from you directly about the steel and aluminum tariffs that are scheduled to go into effect tomorrow and details about the processes for exclusions and exemptions that are still ongoing. we know that the steal and aluminum industries in the united states have been struggling for many years. we also know that the situation is the direct result in many instances of unfair practices from trading partners. china has been the most flagrant bad actor. many of their steel and aluminum
2:09 am
companies are just extensions of chinese government that benefit from massive government subsities. in 20 wu china's steel capacity was just over 100 million tons, roughly the same as the united states. today it is 1.2 billion tons, more than ten times as high as u.s. capacity and more than the total capacity of the united states, european union, japan and russia combined. chinese industrial policies have led to massive amounts of overcapacity in both steel and aluminum industries. global markets have been flooded and the price of both commodities have dropped so low that firms playing by the rules can hardly compete. the situation has put our workers and firms in an unsustainable position. they deserve strong action and support from our government. in response to these issues, the administration has announced it will impose a 25% tariff on steel imports and a 10% tariff on aluminum products. these tariffs are set to take place today.
2:10 am
i understand why our steel and aluminum producers and workers are excited about the tariffs. they represent relief they've been waiting for in some instances for years. we hope it will allow them to rebuild, restart and, indeed, rehire. i'm also concerned, however, that the relief promised by the tariffs will be watered down to the point of not being effective. i'm concerned the way this action was rolled out will discourage cooperation from international partners that we need in the fight over china's capacities. we have a lot of questions as to how the administration will proceed in coming weeks and months. we posed many of them to ambassador lighthizer yesterday and we understand you and your department have a different role in these investigations and in the administration of the exclusion processes. we are particularly interested in when the country exemptions and product exclusion decisions will be made and when and where and how they will become effective. how once exemptions and exclusions are applied, we want to know how the tariffs will be
2:11 am
able to provide the promised relief and whether the tariff levels will be adjusted upward to account for exemptions and inclusions. we want to know what the administration's plan is for monitoring whether the tariffs are working and how the administration would modify the relief to adjust for real world effects. we would also live to have you focus on what the administration's vision is for how it will contribute to a multilateral coordinated strategy for counteracting the global overcapacity crisis and how long the administration envisions these tariffs would need to be in place to address the national security threat that your department has found. i hope you can provide, mr. secretary, clarity on these issues over the course of the hearing this morning. thank you, mr. chairman. >> thank you. without objection, other members' opening statements will be made part of the record. today's sole witness is secretary ross. secretary, the committee's received your written record. it will be made part of the formal hearing record. you reserve five minutes to deliver your oral remarks.
2:12 am
mr. secretary, you're welcome. we're pleased and honored that you're here. you may begin when you're ready. >> thank you very much, mr. chairman, mr. ranking member, and members of the committee. i thank you very much for the opportunity to speak with you today and for your input as we implement bipartisan trade policies that protect and defend american families american workers and american businesses. this president has made it clear that his first priority is keeping the american people safe. he has also made it clear that he will not tolerate unfair trading practices that weaken our internal economy to the point where they threaten to impair our national security. i initiated the steel and aluminum 232 investigations in april 2017.
2:13 am
and the president signed two memorandums that month, directing me to proceed expeditiously to conduct these investigations and report my findings. i submitted my reports to the president in january. the reports found that high levels of import penetration are adversely impacting the economic welfare of our domestic steel and aluminum industries. we have seen plants closed or idle with attendant loss of jobs, skilled workers and research and development. the reports also found that global excess capacity is a circumstance that makes it likely that continued high level of imports would cause further closures. this all would place the united states at risk of being unable to produce sufficient steel and aluminum to meet demands for
2:14 am
national defense and critical infrastructure in an emergency. for example, there is only one remaining u.s. producer of steel used in electric transformers, a type of critical infrastructure, and only one high-volume producer of armor plate used in military vehicles and ships. similarly, there is only one high-volume producer of the high purity aluminum needed for defense and aerospace applications. the problem is that products with national security and critical infrastructure applications account for only a small part of overall steel and aluminum consumption and therefore are not enough on their own to sustain healthy, innovative steel and aluminum industries.
2:15 am
thus i recommended that the president take one of several different actions to curb imports, and thus ensure the long-term visibiliability of ou nation's steel and aluminum industries. on march 8th, president trump exercised his authority under section 232 of the trade expansion act of 1962 as amended to impose a 25% tariff on steel imports and a 10% tariff on aluminum imports. the tariff actions taken by the president are necessary to defend america's essential steel and aluminum industries against imports that harm our domestic industry to the point that they threaten to impair our national security. the president's 232 decisions
2:16 am
are the result of a long and well thought out interagency process led by the commerce department, where we studied the causes of the certain -- current circumstances and the impacts of our actions. on march 23rd, tomorrow, the u.s. customs and border protection will begin implementing the tariffs. so where do we go from here? we have already announced a process whereby domestic industry can be excluded from the tariffs based on national security concerns or a lack of domestic supply of a quality product. our intention is to implement these tariffs in a way that minimizes undo negative effect on downstream industries while also weighing the national security needs of our military and our critical infrastructure.
2:17 am
the president has also announced that he is suspending the tariffs for products from canada and mexico, pending negotiations that would yield satisfactory alternative means to address the threatened impairment to u.s. national security. we also intend to enter discussions with the eu on behalf of their member countries and any country wishing to make such an arrangement. the president also maintains further authority to alter the tariffs at any time based on national security and other considerations. as i said in the beginning, our top priority is the security and safety of every american, and that will continue to guide us going forward. that was just a brief overview, but i look forward to getting into more specific questions and
2:18 am
more detail as i respond to your inquiries. thank you. >> thank you, mr. secretary, for your testimony. we'll now proceed to questions. due to the time constraints this morning, we have agreed to limit questions to three minutes and i'll begin. mr. secretary, we have to get the exclusion process right. for both products and countries. so we can make sure our remedies are narrowly tailored and u.s. jobs aren't harmed. if these exclusions aren't provided in a workable and timely way, this could cost us u.s. jobs. so in my district there is a big impact on energy, and just one example, grant prideco, this great manufacturing success in my district in texas, population 7,500. they make premium drill pipe that is used in some of the most technically demanding oil field applications in the entire
2:19 am
world. they send steel -- -- that meet exacting technical specifications that aren't available here from u.s. suppliers. is those steel tubes come back and those 500 workers thread them and improve them. they sell them about 60% of them to american energy companies. so they can compete. and 40%, they compete and sell around the world. they have fierce global competition. so grant prideco was planning to increase their workforce from 500 to 1,000 employees, as the energy market improves, but now those plans are on hold due to these tariffs and the exclusion process. worse, because -- they could under 25% tariff lose half of their sales. and potentially face shrinking
2:20 am
that workforce. so i did a town hall recently in that manufacturing plant. these are great workers who do an amazing job, and this plant is so important to that community. so if their product isn't excluded, what do i tell them? do i -- just a second. do i tell them china's cheating so you need to lose your job? that just doesn't seem right. i know you care about these manufacturing jobs. i know president trump is just passionate about protecting those jobs. so will the exclusion process protect american workers like that? >> i believe so. and as you know, we have posted the basis for product exclusions on the commerce website. we did that the other day and we've already gotten in 100 or 200 inquiries and are literally
2:21 am
processing them as we sit here this morning. as to eligibility, any individual or organization that uses steel or aluminum products identified in the proclamations may submit requests for exclusion. those parties must use their steel or aluminum articles in business activities in the u.s., as was the case with the parties you identified in your opening remarks. then those could be construction, they could be manufacturing or they could be supplying those products to end users. a foreign-owned entity with a facility here with u.s. employees is also eligible to petition for an exclusion. the 90-day intergovernmental
2:22 am
review period will encompass the 30-day comment period, and we hope not to take 90 days for the intergovernmental review. the way that the mechanics will work is there is a 30-day comment period and agencies to go through the interagency process and comment, and then up to 45 days for commerce to analyze and make a final determination. so we anticipate no more than 90 days and mopefully less. if a product is excluded, the exclusion requests will be made case by case based on the information specific to the individual or organization. it may include a single or multiple foreign source. however, a total volume of imports will be authorized for a
2:23 am
specific time period. we do have the discretion to make broader exclusions available to all importers of those particular products if we find the circumstances warrant it. we will be looking for a -- in order to not grant an exclusion, we will be looking for demonstrated manufacturing compatibility meeting the technical parameters for the specific article in question. this could include idled capacity that is being brought back online as a committed thing, not as a prospect, not as a possibility, but as a commitment by the u.s. company, as well as we will include new expanded capabilities. the determination as to whether to accept or deny inexclusion
2:24 am
wi -- an exclusion will be made public and on a rolling basis. there will also be a process for companies to file confidential information that will not be made public. there will be an appeal process if a company is denied an exclusion. so that's a brief summary of the basic terms of the product exclusion process. yesterday, you had ambassador lighthizer here. i believe that he gave you a real description as to how he visualizing the country exclusion process to be done. we also are playing a supportive role in that so i could address that if you wanted. >> thank you. mr. secretary, you have the discretion if a product's excluded to make those tariffs retroactive so there is not a harm on those u.s. companies. will you consider that as part
2:25 am
of the process? >> yes, sir. we have actually made a formal request to the customs and border patrol that they do what we call an escrow account. >> yeah. >> this is quite commonplace between us and the customs and border patrol in the context of anti-dumping and counterveiling duties. while the volume here might be a little more, it's a process with which they are familiar. we think it's only fair because it shouldn't be that just because there is a 90-day process that any manufacturer who is granted relief should not be stuck for the tariff during that 90 days. >> and i agree, mr. secretary. thank you. mr. nael? >> thank you, mr. chairman. mr. secretary, details as to how the tariffs and exemptions and countries and exclusions for company-specific products and how they are to determined is really going to be critical. diversified metal is a department of defense supplier
2:26 am
with a facility located in my constituency has raised concerns about the impact of these tariffs on its business. diversified metals provides key alloys used by the u.s. navy in its submarine program. the navy has only approved one hot rolled bar mill which is currently located in england. it's important for you to know that there is currently a good deal of uncertainty and confusion as to how the tariffs will affect the department of defense contracts. even if the department of defense mandates they source their steel or aluminum from a foreign facility. now, this is where i think that there is an opportunity for more clarification. and it relates to multilateral strategy. how will the announced tariffs after exclusions and exemptions ultimately provide relief to u.s. workers and industries? and i think i'm picking up on a point the chairman made on that. and what is the administration's vision for achieving a
2:27 am
multilateral coordinated strategy for counteracting the global overcapacity crisis that has harmed the steel and aluminum industries? >> well, those are several questions. i'll try to respond to the ones that i can recall, and if i -- my member is faulty, perhaps you can remind me. as to uk, and for that matter the whole eu, i believe you have seen the release that commission malmstrom from european commission and i put out yesterday. we've had very constructive discussions, not just on steel and aluminum but on potentially a broader range of topics. and our hope is that just as we're in the midst of negotiation with canada and mexico on steel and aluminum and on other topics, our hope is that for the first time this will bring collective action on
2:28 am
the part of the world community to deal with the ultimate problem, which is the overcapacity, particularly in china, but not exclusively in china. so we're hoping that there will be extensive negotiations, bilateral or multilateral, as a result of this. >> mr. chairman, i would just emphasize as you close, the multilateral aspect of this is really going to be critical. thank you. thanks, mr. chairman. >> thank you, mr. neal. mr. johnson, you're recognized. >> thank you, mr. chairman. secretary ross, welcome. >> thank you, sir. >> let me begin by saying that i strongly oppose the tariffs on steel and aluminum imports. you know my home state of texas leads all states when it comes to import steel and aluminum products, so it's a big deal for texas. as a combat veteran who fought
2:29 am
in two wars, i'm deeply troubled at section 232, which is intended to protect our national security, is being misused to advance a protectionist agenda. mr. secretary, there is simply nothing to suggest that the imports pose a risk to our national security. instead, these tariffs pose a serious risk to our economy. they could trigger a trade war. and they may damage our relations with key allies. in the department of defense memo that secretary mattis sent to you, he said, and i quote, d.o.d. does not believe that the findings in the reports impact the ability of d.o.d. programs to acquire steel or aluminum necessary to meet national defense requirements. mr. chairman, i'd like to submit that memo for the record. >> without objection. >> thank you.
2:30 am
mr. secretary, in light of this statement from the secretary of defense, why did you and the administration ignore the view of secretary mattis and still go ahead with the tariffs? >> thank you, sir. the letter has many more words than were described in the brief excerpt you made from it. let me read the part of it that is in the second paragraph. regarding the december 15th, 2017 reports on steel and aluminum, department of defense believes that the systematic effect of unfair trade practices to intentionally erode our innovation and manufacturing industrial base poses a risk to our national security. as such, d.o.d. concurs with the department of commerce's conclusion that imports of foreign steel and aluminum based
2:31 am
on unfair trading practices impair the national security. then he goes on to say about the immediate request, the difference in the paragraph you read and the paragraph i read is simply this. the threshold under section 232 is whether or not the imports threaten the national security. the threshold is not that it actually impinges right now on national security. and that is why the department of defense specifically said it concurred with our conclusion. >> time is expired. thank you, mr. johnson. mr. levin, you're recognized. >> welcome, mr. secretary. welcome. i want to review quickly what seems clear. there has been a steel glut,
2:32 am
also aluminum. china is the main source of it. china has used steel and aluminum as an export platform. state-owned enterprises, subsidization, it's been the failure of action in this country and abroad. as far as i know, theirs not been a single hearing since the republicans took over on steel. we wrote letters urging action and the administration in the past also settled for talk. anti-dumping and countervailing duty. we went to geneva years ago to save them and they were saved by they're not enough. so the main victim has been the u.s. our companies, our workers, and
2:33 am
there's been an impact potentially, at least on national security. so i want to press you, what, in view of these clear facts, including inaction by so many of our colleagues on the republican side, what's the strategy? what's the main objective? is it the tariffs or is it the tariffs to force global action? i assume it isn't nafta, as we've discussed, you have to step up to the plate on nafta and they're allowing mexico to use suppressed wage as a weapon to attract industry. so briefly, with all of these exceptions, is it a global response that is your aim essentially? >> it is, indeed. the reason that we need to take
2:34 am
this kind of action is several. as you may be aware, in the normal course of events, commerce department imposes anti-dumping and countervailing duty actions on a variety of products from a variety of countries. we, in fact, have 424 such orders outstanding right now. half of which, 212, relate to steel. and of the 87 pending investigations, 38 also refer to steel. a lot of the steel actions have been directly against china. and the end result of that is not quite what you might have expected. our direct imports from china have gone way down. they're a fraction of what they were before all of these actions were put in.
2:35 am
but it's a little bit of a whack-a-mole situation in that it suddenly appears from another country. with or without some further transformation. and it appears neither directly or it appears because their overproduction dislodging domestic production from its own domestic market and that material is dumped independently by the other country into world markets. >> so it's a global response that you're after? >> yes, it is. yes, it is. >> thank you. >> mr. levin, time has expired. mr. reichert, you're recognized. >> thank you, mr. chairman. thank you for being with her, mr. secretary. appreciate you taking time to be with us today. i also appreciate the fact that you have in your statement mentioned that you have considered the undo negative effects downstream, but i know you are hearing and i'm hearing
2:36 am
that businesses continue to be worried about the negative impact of these tariffs on their bottom line and the timing and complexity of the exclusion process. and there's another issue, too, and sharing information as they apply for the exclusions, they are concerned about proprietary information that they are going to be sharing on their applications that are too sensitive to share publicly. consumers are also worried, as you know, families are worried, who buy everyday goods and require -- that require steel and aluminum because they are anticipating that costs are going to go up. so there are a lot of issues i know that you're considering. these tariffs also set up the potential for retaliation by our trading partners, and i'm especially concerned about washington state, but the entire country. while i agree that we must
2:37 am
combat unfair trade practices, we need to take a targeted approach and work in a partnership with the global community on a solution. and i want to touch on the question that mr. neal touched on and give you the last minute and 30 seconds to hopefully go into more detail. how does the administration plan to strengthen that relationship with countries now who are going to be imposed with these tariffs that are not real pleased about this process to create a coalition that is working together to address the, really, the big problem is the tariffs or the china over steel and aluminum. >> right. >> so what's your plan globally? >> well, first, on the confidentiality question, we do have now a normal process. any company that wishes to submit proprietary information,
2:38 am
it will be treated as such and will not be disclosed publicly. so that's a normal thing that will apply equally here. second, as i believe ambassador lighthizer probably alluded to yet, part of the discussion that we will be having with countries for their exclusion is the very topic, what will they do to be cooperating with us against the global overcapacity problem? the problem is enormously severe. o i'll give you two data points. china's excess capacity exceeds our total capacity. china produces in one month about as much steel as we produce in a year. so it's way, way out of proportion when you consider that they are the second largest
2:39 am
economy but vastly the dominant producer of steel in the entire world. >> mr. secretary -- >> so it is a global problem and it's also illustrated as a global problem by the fact that of our steel orders they are not all against china. they're against 34 different countries. >> mr. secretary, i apologize. the three minutes goes so fast and we have so many members who want a question. >> sorry. >> thank you. >> thank you very much, mr. secretary. if i understand correctly, you presented president trump with three alternatives to implement this policy on aluminum. one of them was global, one of them was targeted, is that correct? >> yes, that is. the targeted one encompassed just china, hong kong, russia, venezuela, vietnam. >> right. if that alternative had been adopted, russia, for example, would be paying three times as much tariff as it will under the
2:40 am
approach that was accepted. >> yes. the targeted approach, had it been adopted in its original form -- >> that's -- >> would have put very high tariffs on a very small number of countries. >> and that really goes to a broader concern that i have. that would have permitted other countries, our allies, to maintain the quota of aluminum that they had last year. >> yes, sir. >> instead, president trump rejected that alternative that would have imposed higher tariffs on russia and these other four countries. russia, of course, has the second largest aluminum producer in the world. that is headed by someone whose repeatedly been denied visas to come to the united states because of his connections to criminal organizations. and i just have to, frankly, and respectfully question your comment that the president made clear that his first priority is to keep america safe. i don't see anything indicating
2:41 am
that he is particularly interested in keeping our country safe from russia. indeed, i have to concur with comments that i'm sure you're familiar with, that barry mccaffrey, a deck catersrated four-star combat veteran. recipient of three purple hearts said within the last three days, reluctantly i have concluded that president trump is a serious threat to u.s. national security. he is refusing to protect vital u.s. interests from active russia attacks. it is apparent that he is, for some unknown reason, under the sway of mr. putin. now, i know you don't agree with that. since he made that very powerful statement, from someone who is clearly an american patriot, we've had president trump respond to the attempted murder in great britain and to the continued russian assault on our
2:42 am
election system by calling and congratulating president putin. he has insulted people all over this country, but the one person he has never a bad word about, a questionable word about is vladimir putin. and it appears that mr. mccaffrey, general mccaffrey, has summed it up rather well, and that if anything, the approach taken with these aluminum and steel tariffs is very consistent with the approach of always coddling russia and never calling it out for its attempt to steal our democracy. >> thank you. the gentleman's time is expired. mr. ross will be recognized. >> thank you, secretary ross. getting back to the 232 process, it's my understanding that the product exclusion request only allows an exclusion for one product at a time, even if the only difference in that product is size. such as the different diameters
2:43 am
of steel wire. i represent suburban chicago and wove got a lot of small manufacturers. they will have -- one company, as you know, will have hundreds and hundred of products. how do you contemplate that? that seems foolish as it's presented now. i would assume that there is more to this story and that you're not requiring a company to submit hundreds of petitions. similarly, maybe you could also answer this, surely there is a way for industry groups to join together, you know, just in terms of expediting this. can you speak to that? >> right. well, first of all, we can grant blanket requests, in that if it's pretty obvious from the request that we've gotten that a particular item is generally regarded as being unavailable, we can grant blanket requests. now, that won't be the rule, but there will be situations where we will and we could do that
2:44 am
based on the submission of an individual company. so in the normal course we think that a lot of the requests will be extremely specific products that are peculiar to a particular end use and maybe one or two companies needing the material. ones that have broader impact, we do have the ability to deal with in a broader way, but we need specificity because in order to tell customs and border patrol how to implement, we need the harmonized code number of the individual product. that's the only way that they can track it. so while i would have preferred a somewhat less bureaucratic system, it's not an alternative that we really have, it's the only mechanical way that we can implement. >> i think that's something to take in. i mean, the burden locally will be enormous if that's not spoken to and remedied in some way.
2:45 am
i'm sure that's not lost on you, but there were ashen-faced looks around a room recently at a company that i was visiting not long ago when they were thinking about this process, and it just seemed completely overwhelming. i made my point. i yield back. >> well, it's the best we could do, sir. >> thank you. to balance this out, we're going to go to two to one questioning. mr. buchanan, you're recognized. >> thank you, mr. chairman. thank you, mr. ross, for being here today and thank you for your leadership. let me ask you, talking about other topics, florida, it's about a $12 billion industry in terms of the economic impacts fruits and vegetables. i talked to a grower yesterday, you know, last two years, i know we put an agreement in place anti-dumping. i think we're looking at another one. it's impacted us, our business industry is down 22%. mexico -- yeah, we're down 22%.
2:46 am
mexico is up 14%. 34-point spread. it has a huge impact, i'll tell you, on jobs and a lot of businesses throughout florida, fruits and vegetables, but i'm -- in terms of tomatoes in my region, it's one of the largest -- we're one of the largest growers in that and many of them are going to have to close up, or that's what they claim anyway. i was interested in your thoughts about what we're doing on anti-dumping. i know we're talking about steel and aluminum. but i am interested in this aspect of it while we have you here today. and i will mention, we have the same growing season as mexico, so we're very concerned as we work through this nafta deal. >> right. well, as you know, i'm -- before moving to washington was a florida resident and have met extensively with the tomato growers and other growers there. and it was partly at my suggestion that we included in the nafta talks the question
2:47 am
about seasonality of measurement as opposed to just annual measurement of the import situation of those products. i don't know that that's been resolved yet in the nafta discussions, but we are keenly aware of the problem of seasonality and the potential that that has to lead to very, very disruptive end results for the growers. so we are focussing on it. >> are you working on an additional anti-dumping requirement or something? do you know where that might be? i know something got put in place a couple of years ago, but people are concerned what was put in place is not working, and under the current negotiation, is that something that is being considered? >> yes. at the request of the growers in the states, particularly the florida growers, we have initiated a reset of discussions
2:48 am
of the present arrangement with the mexicans. >> thank you. i yield back. >> that is underway as we sit here. >> thank you. >> mr. you. >> mr. secretary, thanks for being here with us today. i'm sure we're going to learn more. i'm over here. >> sorry. >> i'm sure we're going to learn more about the sfrags's 301 decision later today when you make that announcement. there is no question china has not been a good actor in many of the rules of trade. my problem, however, has been the unilateral approach. i'm not convinced that china when they're mispracticing trade and not abiding by the rules are only doing that to discriminate against u.s. interests or u.s. companies. this is on a global basis. there is an opportunity for you, this administration to work with us to try to built a multilateral coalition to isolate china, which i think would have a more meaningful impact from china's perspective, rather than just this administration, this country taking action. so i encourage you to explore that with us and work with us in order to do that. but back to the 232, national security decision on steel and aluminum.
2:49 am
you know, many of us have been concerned about the whole process from the beginning. that it was ill considered, chaotic, confusing, the classic case of shoot, fire, aim. now we're trying to backfill exemptions for products and for countries that are still ill defined and confusing. the one thing businesses in america hate more is uncertainty. many of them are complaining that the process is going to be very narrow and tedious. our friends and allies that this may apply to are scratching their heads wondering why they potentially could be singled out. and, again, it's the unilateral basis that this administration has decided to pursue with trade policy that is very troubling. we do need friends and allies around the globe. we need to be a leader in developing a rules-based global trading system. leading, rather than following or isolating, as the case may be. as an example, on 232, the national security reason, i and
2:50 am
representative mike kauffman sent you along with 44 other bipartisan members of congress a letter last year talking about certain aluminum that has absolutely no national security application. to be exempted. the rolled canned sheet. the primary aluminum. can sheet aluminum, i even had a conversation with you following up with the later and i feel we didn't get an adequate response even though it's currently on the list. if this is the type of feedback or type of partnership that we're going to get from the administration, coming to us asking for a three-year extension on tpa, is going to be a pretty heavy lift because of the lack of responsiveness. and if we're going to go down this road of invoking 232 for national security implications, especially with products that have absolutely no application, what's to prevent other countries from invoking their own national security reasons to exclude our exports? i've heard arguments from europe all the time to justify trade barriers to our agriculture products because of the food security system that they're
2:51 am
trying to protect. and this is an area of the world that known massive starvation during two world wars. so that's problematic that other nations now will see a door opened to them to invoke national security to erect protectionist measures, and it's something many of us are deeply concerned about. >> mr. secretary, i apologize. time is expired. mr. smith, you're recognized. thank you, mr. chairman, thank you, mr. secretary for being here. i represent the number one agriculture district in the nation. so it certainly stands to reason that i would share the concerns of my constituents on the tariffs, and the various impacts that may take place. as you know, secretary perdue mentioned that agriculture and ag products are always the tip of the spear in any type of retaliatory action. let me suggest our agriculture economy is not in a position to absorb any spears at this point given the sensitive nature of --
2:52 am
and the -- kind of the downturn in the ag economy that's been in place for longer than we would prefer, certainly. can you reflect a bit on assurances you can give us that the administration has considered rural communities, rural economies, and their -- and our interests in considering what impact the tariff moves might have? >> well, as you know, i worked very, very closely with senate -- with secretary perdue, and worked very hard on getting the beef exports going again to china, worked very hard on trying to open up some of those markets in south america, and worked hard to deal with the sugar problem from mexico. so it's not that there's any lack of focus on trying to help
2:53 am
agriculture. i'll also mention in the context of the question of your colleague from florida, the work that we've done trying to work on the seasonal as opposed to annual measurement of agricultural imports. we've also put a lot of pressure on about sanitary and fido-sanitary nonscience based constraints that other countries put on our products. so it really wouldn't be fair to say that the administration has neglected agriculture. agriculture has been a very important part of our activity. >> sure, and i would reflect -- i mean, i would agree that the administration, i think, has worked hard for agriculture. i'm wondering if there's any sort of analysis that exists that could point to that recent actions or actions to come will not actually harm or set us back on some of the advances we have
2:54 am
made more recently. >> well, in terms of retaliation, there's no way to forecast exactly what a given party would do. but what i would say is any -- the rest of the world cannot feed itself. we all know that they really need imports from those countries like u.s. that are very good at agriculture. what that means, if a country tried to impose restrictions on a particular crop from the u.s., it probably would raise their own costs because there isn't a country in the world, excuse me, who pays us one penny more for any of our produce than the lowest price that it could get from somewhere else. nobody does us a favor. >> thank you. time is expired. >> thank you, mr. chairman, and thank you, mr. secretary, were being here this morning. last spring, in a similar
2:55 am
hearing to this one, i voiced my concern to ambassador light houser about using national security as a basis for trade restrictions since this action could lead to retaliation if another nation restricts imports of its products. while it's a good step to implement an exemption process that many members here requested for our allies and trading partners following the proposed steel and aluminum tariffs, my concerns have only grown, especially since other nations are indeed preparing a retaliation list, targeting farm products. >> right. >> now, mr. secretary, you have made comments recently about farm families and ranchers who, i quote, "scream and yell" when their nerves get rattled by the administration. and you mentioned that they even go so far as to write to their
2:56 am
member of congress. you may not be aware, however, that the state of kansas just last week declared a statewide drought emergency for all 105 counties, or that blizzards roll through at a moment's notice or multiple years of large wildfires, some which have blazed an area many times larger an area than the entire district of columbia. kansas depends on selling their products abroad. the value of all kansas ag exports total $3.7 billion, even with a state with a population of fewer than 3 million kansans. ag represents the top ten products, wheat, second most valuable international exports from kansas, trailing only our plane manufacturing. and prior to nafta, mexico imported an average of 11.5 million bush els of wheat from the u.s. after nafta. we have seen a nearly tenfold
2:57 am
increase to 110 bush els. on the national scale, half of the wheat grown in the united states is exported. so my constituents' livelihoods depend on both mother nature and foreign markets. i'm curious, why do you think american farmers and the ag industry are so nervous when it comes to nafta, or sudden tariffs? and do you know how many american agriculture heartland, how much they depend on those exports? >> i'll answer very briefly. first of all, there's no sign that any of these other countries have practiced restraint before we invoke national security. they are doing what they wish to do. every other country that i'm aware of is much more highly protectionist than the u.s. they all talk free trade and
2:58 am
they all practice very protectionist activities. >> mr. secretary, i'm sorry again, the three minutes goes quickly. time is expired. >> thans for coming today, mr. secretary, when you look at any chart, how close we're linked with china, it becomes quite obvious, the g-20 countries with china as the top five export destination, this is something we can't ignore. when you look at the relationship between the s&p 500 and the shanghai strong exchange composite. they will not get rid of us, and we will not get rid of them. sub subsidizing product. you'd agree with that. >> yes, i do. >> the overcapacity and the
2:59 am
flood of cheap imports from countries, sometimes like china, needs to be addressed very, very closely. i and many democrats in congress have a strong record on calling out china for their trade cheating, on the record. we have passed bills to hold them accountable on currency and on steel dumping. republicans have not done much of anything up to now to confront this issue. in fact, what we've done is paid corporations and subsidized the corporations to get out of the country. it's written in our budgets. that's unacceptable. they -- the republicans passed a tax bill that promotes offshoring. we're talking out of both sides
3:00 am
of our mouths here, defend the american worker and at the same time make it easier for companies and corporations to move. i don't think that this works at all. i strongly support enforcement of u.s. trade laws. there has been a lot of discussion about how the 232 steel and aluminum tariffs that the president posed may start a trade war. no one wins a trade war. but i know one thing, under article 1, section 8, this congress, the very people in this room should have the most to say about what direction we go in in trade. it is very, very clear. can you please explain whether these tariffs could trigger a trade war as you perceive it? >> well, as i indicated before, there's no indication that the other countries have practiced
3:01 am
any restraint before we did the action that we're about to take. whether they will respond, and if they do, in what form, no one really knows. but i don't think that whether we call it national security or something else is going to have any impact whatsoever on the nature of their response. they're going to respond in whatever they think will be the most politically hurtful way to us. >> thank you for your forth rightness. thank you, mr. chairman. mr. paulsen, you're recognized. >> mr. chairman, just to follow up on my colleague sam johnson when he had his interaction with you, if you read further on the memo, it's very clear the department of defense is concerned about the approach being taken here. it says therefore d.o.d. does not believe that the findings in
3:02 am
the reports impact the ability of d.o.d. programs to acquire the steel or aluminum necessary to meet national defense requirements. d.o.d. continues to be concerned about the negative impact on key allies regarding the recommended options within the reports. but let me go this way, mr. chairman, and mr. secretary, look, i don't believe this is the right approach to implement these tariffs. i can't stress enough, though, the importance of making sure we're limiting the impact of these tariffs on metal consuming companies and their workers who, in the end, could be very less competitive globally by higher prices and having an exclusion process that's father and grandfathering existing contracts is critical. i'm hearing from manufacturers in my state of minnesota, harvey manufacturing company, specializing in metal stamping and fabrication, and they're seeing pretty big price increases from their suppliers because of the threats of tariffs. and their customers are worried
3:03 am
about what the future holds. they're a company that say the tariffs are the top trade issue around nafta. we have a lot of trade with canada and mexico, obviously. as i mentioned yesterday, when ambassador -- r&m manufacturing, small business, they have set contracts, they clearly say they will not be able to renegotiate with their larger customers regardless of material costs, which are going up. i just have a strong concern about lost manufacturing jobs, just as happened historically, if history is our guide, back in the early 2000s when this was done before. mr. secretary, can you briefly dive into this a bit and explain, maybe, has the department analyzed the broader supply chain economic effects the tariffs could have in terms of job loss downstream in other industries, or in consumer prices in general? >> yes, we have. in fact, we handed out, i believe, to each of the committee members the series of
3:04 am
charts showing the interaction between steel prices and aluminum prices historically on auto production, on recreational vehicles, on construction on a whole variety of industries. and we also have done our own analysis and have studied analytical reports by various other parties, and have come to the conclusion that they're in the aggregate, will not be material damage inflicted. indeed, this is a very small segment of the economy. the total tariffs that we were originally talking about before any exclusions for countries or products is less than one-half of 1% of the economy. >> mr. martson, you're recognized. >> thank you, mr. chairman,
3:05 am
thank you for being here, secretary ross. there have been quite a few press reports about the pending section 301 action. and i was hoping that you could shed some light on the process within the commerce department with regards to that investigation. >> the commerce department supplied a lot of analytical materials as well as specific comments on specific aspects of the 301 to ambassador lighthizer. the u.s. trade rep, as you're aware, is the lead on 301 investigations. but we put in endless hours on various of these specific remedies that you will hear being announced, and participated extremely actively in the interagency process with ambassador lighthizer and with other parts of the administration.
3:06 am
>> so has commerce has conducted an analysis of the supply chains that will be affected by those tariffs? >> by the 301s? yes, sir. we have looked at -- and you'll hear when the announcement is made, i think you'll get a flavor for what it is that the remedies that are being sought and then we can have a very fulsome discussion. >> okay. so at some point we'll be able to get those studies? >> well, at some point the 301 action will be announced, and it wouldn't be very surprising if this committee and others would request that we come and explain it. >> did the analysis income an evaluation of available capacity in other markets? >> well, i can't answer that in detail without getting ahead of the president and his
3:07 am
announcement. but i can promise you there's a huge amount of analysis that went into it. >> i'm assuming that commerce believes that the proposed tariffs will have the effect of pressuring china to change its policies? >> the hope always in tariff imposition is to modify people's behavior, yes. >> okay, thank you, secretary. >> thank you. mr. higgins, you're recognized. >> the united states produces two-thirds of the steel it uses. steel production today is no longer labor intensive. it's capital intensive, through innovation. steel is being made that's cheaper, lighter, stronger and cleaner. china produce us only about 2% of the steel used in the united states. so i think this debate is a small piece of a much larger problem. mr. secretary, you are known
3:08 am
throughout all the financial journals as being a big global thinker. you're one of the most influential global thinkers in america. when you look at the united states, chinese economic relationship, it's a $600 billion relationship annually. there are 275 chinese students who are studying in america, 25,000 american students studying in china, last year chinese investment in the united states for the first time exceeded united states investment in china. china is number one in patent production, which is an important indicator of future economic growth, but it's a place that america held for over a century. we got overtaken by china. we got overtaken by china. china is moving from a manufacture and assembly economy to a knowledge based economy. people here are always whining about china, democrats and republicans. they cheat on their currency.
3:09 am
they treat their people poorly. they have a horrible human rights record. their water and air quality is deplorable. but you know what they do? they invest in the growth of their own economy. china just invested, or is investing $1 trillion to open up the chinese economy to 60 countries in europe, in africa, in asia, in latin america. $1 trillion. they're positioning themselves for future economic growth. we have an infrastructure bill that is $200 billion over ten years. it's equivalent to the amount that american taxpayers finance for the rebuilding of iraq in afghanistan. sir, you have a global vision. please admonish this president and this administration to do better to position the united states to compete because the united states can compete
3:10 am
effectively with any country in the world so long as there's a level playing field. your thoughts? >> it is not quite correct, sir, to say that chinese exports to us are of steel and aluminum are as limited as you indicated. as i mentioned before, they dislocate a lot of production from other countries to us. they also veil the exports to us through transshipment with or without additional manufacturing. >> respectfully, sir, it's still a smaller part of a much larger problem. >> oh, it is. the problem is huge. and the 232 actions are only part of a mosaic for dealing with it. you'll hear more about china, a lot more in the 301. >> time is expired.
3:11 am
ms. balack, you're recognized. >> thank you, mr. chairman. so much has already been said about china. we all feel that way that it's past time that we must do something about their operation the way in which they operate, unfairly subsidizing state-owned enterprises and throwing barriers up for american products. so i want to go back again to what has already been talked a little bit about -- or talked a lot about and that is the tariffs on steel and aluminum. in particular, in my district, and electrolux has a district in springfield, the plant employs over 2,500 full-time employees drawn from all over the area. and the type of manufacturing plant jobs that this plant provides really are sought not only by communities here in our country but also all over the world. so in short this plan is very
3:12 am
important to springfield and the region that i represent in tennessee. earlier this year electrolux invested $250 million into that plant. that $250 million represents a huge investment in our community. they now, because of their concerns of the steel, have held up that investment and are not moving forward. so what my question is, is what can i say to them, what can i say to the leaders of electrolux to allay the fears they have to they will once again invest in the community. what should be the process that i tell them moving forward to allay the fears? >> i certainly agree with you that fear of the unknown is one of the worst fears that people can have. and uncertainty about environment, the regulatory environment, the tariff environment, there's a huge concern to business people. i think when you see the actual details of the president's
3:13 am
announcement, both on 232s and on the 301s, then you'll be able to see a much more clear picture of what is actually going to happen. and i think it will clear the air a lot. >> well, that makes me feel a lot better. because i can tell you in these little rural communities it is very important, and 2,500 full-time jobs is a huge loss in our community. thank you, and i yield back the remainder of my time. >> thank you. mr. kel, you're recognized. >> thank you for being here and in addition to that thank you for stepping out of a very successful and comfortable life to come and serve your country. this is incredible. i have great respect for everybody on the dieias, but there's nobody that has more depth and experience and knowledge when it comes to steel and aluminum than you do. one of the questions i have for you, you referenced in your opening remarks about electrical steel and we're down to one producer of electrical steel in the country. i'm very close to that, i mean, within about a half mile of the ak steel, we produce the finest
3:14 am
electrical steel in the world, thousands of employees. and the question comes up that while that -- the last producer, in the product codes, this is what i'm trying to understand, you can help me with this, i'm sure, ak is very supportive of the 232 remedy the president put in place. it's admitted several product codes that are basically allowing electrical steel to be stacked, wound and slit. that allows foreign producers to circumvent the 232 remedies. i know you're aware of these things. call it to your attention. love to work with you on that. the other point, in addition, many of us support the action the president took to give canada and mexico special treatment. however, we can't allow them or any future exempt country for that matter to become a conduit for transshipment. one of the other things, i know you're going to answer, we have so little time to talk. thank you, i've sat here for years listening to everybody
3:15 am
talk about what we should be doing. you and this administration are the only ones doing it. i welcome any type of work we can do together to protect that plant. >> thank you. as you're aware, ak supports our programs. >> absolutely. >> the only question they have is on the stacked steel, the electrical steel stack that it can be slit and wound and somehow get into the core of transformers. >> that raises a good question. one of our intentions is as we locate potential sources of circumvention to bring separate actions against those. because as you know we've waged a lot of wars against circumvention already, and well aware that it isn't just the steel, it's the end product of the transformers that can be the big problem and subcomponents
3:16 am
within it. and i promise you we will not ignore that. >> anything we can do to help, please let me know. i'll give you the data ak has given me. you probably had it long before i did. it's refreshing to have somebody that knows something about this product and what's going on in the world as opposed to people who run for office and don't have a clue what's happening. >> thank you, sir. >> mr. secretary, thank you for being with us today. i have an aluminum smelter in my district that almost had to close. so i'm definitely well aware of the issues of chinese overcapacity. and how that has depressed the global market and prices. and undercut american workers and businesses. it's clear that something needs to be done to address the problem of overcapacity, but as many of my colleagues have noted, it's extremely important that any action the administration takes is targeted specifically to the source of the problem, in this case definitely china. in order to truly address the
3:17 am
problem of chinese overcapacity we need to work with our allies, like the eu, japan, korea, and use multilateral fora such as the g-20, the g-7 to develop a coordinated strategy. do you agree with that? >> i believe we do have a coordinated strategy. i believe i've tried to describe it. the exclusion process is intended to do the fine tuning that's necessary to make sure that we don't have -- that we minimize any unintended consequences. >> but you met with commissioner malstrom from the eu recently, and would they feel like there's a coordinated strategy happening? >> yes. i think the actions we've taken will produce coordination with other countries. you probably saw the press release that she and i put out after our meeting and the one
3:18 am
that we put out the day before jointly with my counterpart from germany. we think that the eu in a whole variety of different ways is part of the problem. steel that comes in in the form of an automobile from germany is every bit as much a problem as steel that comes in as steel. >> a couple quick questions, technical question for you. the president ultimately decided on tariffs at 25% for steel and 10% for aluminum. will the administration be updating those numbers based on the number of country and products exclusions that might come out and the impact that those have? >> as it becomes more clear what is the extent of exclusions, both country exclusions and product exclusions, we will present to him the consequences of those exclusions for the steel and aluminum industries, and he will decide whether it
3:19 am
warrants imposing further tariffs on the countries that are still hit, and on the products that are still hit. >> thank you. and one quick question, will there also be a -- an exclusion process on 301, similar to 232? >> i really don't want to get ahead of the president on 301. he will be making an announcement in the relatively near future, very near future. and that's the time when we should have discussion. >> thank you, thank you, mr. chairman. >> thank you. mr. renacci, you're recognized. >> thank you, mr. chairman. i'd like to tell you about one of the many great companies in my district, the mk morris company is a family business that consumes steel in its manufacturing of saw blades. all of the manufacturing done is done in canton, ohio by the 485 employees. when possible, a source their
3:20 am
raw materials domestically because of freight costs, currency risks, lead time and their commitment to u.s. manufacturing. however, in many cases they must rely on foreign sources for their high speed steel edge wire, steel strip backer, carbon steel strip and hardened and tempered steel. morris is one of the few saw blade manufacturing companies remaining in the united states. but they do not produce enough volume to attract the interests of u.s. steel companies. so they are required to source some of their steel from our foreign allies whose steel mills focus on the saw blade industry and are therefore capable of producing materials to exacting quality. president trump's steel proclamation includes reference to chapters 72 and 73 of the harmonized code, which are steel only. saw blades are in chapter 82 and are not referenced. this is why morris believes their competitors manufacturing outside the country will not incur the tariff when they
3:21 am
export their steel-based product to the united states and frankly i'm concerned that companies in positions similar to morris may be insent vised to must have manufacturing outside the country. in your conversations with u.s. manufacturers, how are you addressing the effect that downstream implications could have on u.s. manufacturers? also, what steps might the u.s. take to prevent the potential issue from becoming a real problem? finally, is there any message you would like to relay to all concerned manufacturers in ohio who make up the state's largest sector by gdp? >> well, as you know, i've been in a variety of manufacturing businesses during the my private sector life. i'm keenly aware of the problems at the various different levels of the chain of supply. and those that are in the kind of circumstance that you described probably are the ideal candidates in concept for
3:22 am
exclusion. i also mentioned that we are mindful that taking product to another level of manufacture is one of the favorite ways that people circumvent our activities. we intend to deal with those in separate proceedings, anti dumping and cbd proceedings. this is not the last that you will hear about our solutions to the steel and aluminum problems, or any other problem. >> thank you, secretary ross, and i too want to thank you for stepping out of the private sector and coming in the position you're in. thank you for your service. >> thank you, sir. >> thank you. mr. meehan, you're recognized. >> thank you for taking on the issue of chinese dumping, but of course the implications of how you do that affect a lot of american-based businesses, american keg is a developer of steel kegs, or aluminum kegs, the last in the united states. it competes against foreign imports. the problem is that its finished
3:23 am
goods are not subject to tariffs, just the raw materials coming in. so they are now at a competitive disadvantage, i was intrigued by your comment by an automobile that comes in with finished steel or manufactured steel as another way to get into the country. are we going to be able to deal with companies that are going to be impacted like this, like american keg, who are looking at laying off workers because a foreign keg can come in now at a disproportion at cost? let me ask as well, one more industrywide, i have ball manufacturing, another steel company in my district, that uses the sheet aluminum to make beer cans. now, they'll be one of a number of companies. but that industry alone could be looking at 1,500 applications to you just for can manufacturers.
3:24 am
how can we simplify it so we can do just for industries and things like that so that you have the capacity to be able to contemplate these and help create a level playing field for all? >> well, as i mentioned in response to an earlier question, we have to go by harmonized codes because that's the only way the customs and border patrol can implement. so unfortunately we have to go number by number, and literally some of these codes are ten digits long. but that's what they need for their computer system to be able to implement. on the specific question of -- >> can trade associations and others talk for similarly situated so a determination could be made that then could be applicable to other kinds of similar businesses? >> well, as i mentioned, if we get an individual request from an individual company that is truly representative of an industry-wide problem, we can
3:25 am
deal with it on a broader basis. the powers delegated under the proclamation are quite broad. as to beverage cans themselves, as you're aware, it's my view that these tariffs, even for getting the exclusions and the exemptions will have a trivial affect, a fraction of one penny on a can of campbell's soup, on a can of budweiser, on a can of coca-cola, and it's similarly small increments on many other things. that doesn't answer all the problems. but i think we need to put it into perspective, the total metal content of a can is two or three pennies depending on the can size and the particular material used, so putting a tariff on a portion of that, it really is relatively small in the overall scheme of things.
3:26 am
>> thank you, mr. meehan. ms. chu, you're recognized. >> secretary ross, i'm going to change the topic here and ask a question that has been asked of my office nearly every day. and that is about the census, the census bureau, of course, is under your purview, but it's been reported that the department of commerce is considering asking adding a citizenship question to the 2020 census. and there's a lot of fear by immigrant stakeholders that adding this question will create a lot of fear that many immigrants will fail to respond to the entire questionnaire, fearing that their legal status will come under scrutiny. there are many that argue that the numbers reported from the census will be more inaccurate, and that it will be more difficult to provide benefits and resources for low-income communities who are afraid to be counted. in fact, i've heard from many
3:27 am
entities, including the l.a. county board of supervisors who unanimously wrote to congress urging opposition to the inclusion of the citizenship question highlighting that l.a. county already faces great challenges in counting minorities, immigrants and hard to serve populations. and in the 2010 census more than 113,000 latino children in california and 47,000 latino children in l.a. county were not counted according to one survey that was done. so these inaccuracies make it hard and difficult for our government to administer important safety net programs such as wik, snap and tanef. can you tell me whether the department of commerce plans to include the citizenship question? >> initiated the request for the inclusion of the citizenship
3:28 am
question. we have been talking on the phone, and received written correspondence from quite a lot of parties on both sides of that question. there are many, many subquestions about accuracy, about suppression of responses, that we are taking into account. we have not made a final decision as yet because it's a very important and very complicated question. we will make a decision by march 31st, which is the date on which we're required to report to the congress the final questions for the 2020 census. >> i understand that this question has not been tested, which is usually the tradition, with a census bureau. also, i wanted to know whether you have factored in the additional cost of adding this question? >> the cost is one of the -- is one of the considerations. the comparison with the american
3:29 am
community survey, an annual sampling which does ask the question is another consideration. there are probably 15 or 20 different very complicated issues involved in the request because it is from the department of justice we are taking it very seriously, and we will issue a fulsome documentation of whatever conclusion we finally come to. >> thank you. mr. secretary and members, we have two minutes left in the first of four votes. this is an important hearing. we will reconvene, mr. secretary, immediately after votes. thank you for your patience. the committee stands recess until immediately after votes.
3:30 am
3:31 am
the meeting will come back to order. resume with the questioning by ms. noem. thank you, mr. secretary, for being with us today. in south dakota we have a lot of pride in handling tough situations. we're pretty remote so our transportation costs are pretty high. we consume a lot of energy because we don't have a lot of options. we also deal with a lot of tough weather. so we know that when it comes to agriculture, which is our number one industry in the state that it provides 20% of our state's jobs and it explains why so many of my constituents are really concerned about the tariffs and section 232 and what retaliatory measures could be taken. their biggest concern, because i'm a lifelong farmer and
3:32 am
rancher, these are my people, what concerns them is what appears to be a lack of concern on your part about what these measures, how they could impact the ag economy. and just this last week you said that we should judge results instead of looking at theories. but i want to point to an example, which proves that my constituents aren't just scared of theories. on january 22nd, the administration announced new tariffs on washing machines and toe lar panel technology, then on february 4th, less than two weeks later, after the administration's announcement, china launched an anti dumping investigation into imports on american sorghum. also the wall street journal reported yesterday that china is already targeting soybean and live hog exports for their next action. and it's not just happening with china. the european union also is featuring agriculture in its draft retaliation measure list for the section 232 tariffs, and with soybeans being 27% of my state's economy, we also know
3:33 am
that it's $1.3 billion of exports out of south dakota in 2016. but brazil and argentina, they had less than 15% of the export market worldwide back in 1980. now they have over half. we know they are ready and standing waiting to take up any kind of market space that opens up. and that's what the big concern is for a lot of my producers. so with all of these new tariffs that are being put into place, i'd really like to know whether or not there's a lot of time being spent by the administration, by you and by your individuals that are serve under you on what kind of impac impacts this could have on agriculture considering we're already in a devastating commodity market, facing huge challenges in agriculture, and now if we have some of these measures going forward from other countries i don't know if we'll survive. >> well, we're well aware of the potential problem. it is something we're giving great consideration to.
3:34 am
and you'll be hearing a little bit later today more about the actual exemptions, the exclusion process for countries from 232. and you'll be hearing later today more details about the 301. so pretty soon some of those questions will be answered. >> id encourage you to keep agriculture in the fore front. >> we certainly are. if i lapse at all in thinking about it, sunny perdue is very aggressive about making sure i pay attention. >> thank you. i yield back. >> thank you. mr. holding, you're recognized. >> thank you for being here and thank you for your service. we all know there are products that are unfairly traded and the administration is right to target those unfairly traded products. on the other hand, there are products that are traded fairly, which pose no national security risks, and i hope process as efficient as possible in exempting these products, and i
3:35 am
commend the administration for trying to tackle unfairly traded goods, but we need to be careful in fairly traded goods aren't caught up in the mix in subject to increased tariffs. there's one particular instance on a product you and i have spoken about before, we get some specialty steel from the united kingdom that is used in our nuclear submarine program. and even though the 232 investigation was initiated under national security argument, this is a case, this uk steel nuclear submarine case where it would actually harm our national security to have that product subjected to higher tariffs. so i just call upon you to comment on this case. i believe you're familiar with the factory in the united kingdom that produces this specialized steel. and i believe you're aware of how it's used in our submarine
3:36 am
program. and if you can, comment how the process that you have envisioned that you're laying out could possibly apply to a situation like this. >> i'm quite familiar with the steel situation in the uk. as you may be aware, when i was in private sector, i tried to buy the company. >> yes, sir. >> so i'm quite familiar with its product line. i think you're also aware i issued a joint press release with commissioner malstrom yesterday outlining that we had had very constructive discussions. and i'm optimistic that the eu will turn out to be a negotiated solution. and you'll hear more about that a little later on today. >> well, i thank you. i appreciate the working with the eu. and i'd also like you to keep in mind that once the united
3:37 am
kingdom leaves the eu, that it will be our finest and best bilateral relationship on every level from economic to military. >> well, we're keenly aware of the special relationship between the united kingdom and the united states, and it's not my intention to do anything to disadvantage them in the context of brexit. >> thank you, mr. secretary. >> thank you. mr. smith, you're recognized. >> thank you, mr. chairman. secretary ross, thank you were being here, and thank you for your thorough -- your great deal of work on the 232 investigations. as you may remember, i was with you back in spring of last year when the president signed the executive order to look into the 232 investigations for aluminum. and after looking through your report, it followed through with what i had been asking for a couple years. and the obama administration refused to even look at it.
3:38 am
in 2000, as your report also noted, we had 22 aluminum smelters, 22. and just here recently we have two fully operated operational ones, and only one of those uses the high purity aluminum that is needed for our defense, for our naval vessels, for our aircraft to protect americans. and that is what your report provided, and i appreciate that. but i also want to tell you that the day after that our president issued these protections i was able to stand in the boot hill of missouri where an aluminum smelter had closed in march of 2016 and where we lost hundreds of jobs because they couldn't compete with the illegal practices of china to announce that because of the president's actions and other actions 450 new jobs with the possibility of up to 900 in a district that the
3:39 am
median income household is 40,000 and the jobs will average $64,000 a year. thank you, secretary ross, for doing what is right. and i don't want to operate like some other members of congress by broadcasting my biggest concerns of how other countries may retaliate against us. that is the worst possible thing that we can do. but what i will ask you is to look into some countries such as india where they oversubsidize their agriculture products like rice and other grains that definitely are to the detriment to our farmers. i believe in free trade, but it has to be fair trade. and in order to make sure we have free trade, we have to punish those people who are in breach of contract. and i appreciate your administration in working forward. and i just want to say thank you. not going to target you. i just want to say thank you, secretary ross. >> well, thank you. i'm pretty familiar with the indian situation. i had an office there for six or eight years in mumbai.
3:40 am
i understand quite a bit about india. >> thank you. mr. rice, you're recognized. >> mr. secretary, again, thank you for being here today, and thank you, sir, for taking on this job. your experience and your intelligence in pursuing this is certainly to the benefit of our country and to the american middle class. you see, i focus on american competitiveness. and on the middle class. and it's obvious when you look at the numbers that the american middle class has shrunk and makes about the same amount of money today as they did in 1990. and i think that a lot of that problem is because we allowed our country to become uncompetitive. our tax code, we've worked on that, our trade policy, you're working on that, so i applaud you for it, i know there are people concerned about the effects of these tariffs and they should be and it is complicated. but i'm glad you've taken it on. nobody denies that the american
3:41 am
middle class hasn't suffered because of unfair trade practices. so i just wanted to give you the floor to talk about how you think, in the big picture, that this will affect the american middle class. i've got two steel mills in my district. one of them closed, and they are opening -- reopening partially because of these proposed tariffs. and i've got other people affected in other ways. uncertainty, as you said, is a big fear. so it's important to clear that up. i wanted to give you the floor to talk about those things and how you think this will affect the american middle class. >> well, a lot of the purpose of our trade practices has been to encourage companies to stay in the u.s. or come back or foreign companies to come in. and when i was in davos, the finance ministers of a number of the european countries were
3:42 am
actually complaining about our new tax thing saying they think it's an unfair trade practice that we're cutting our taxes. and i said, well, maybe you should follow suit. that was not well greeted because the particular ministers were not of a mind to cut taxes. the administration is doing everything it can to reassure and to assure current american manufacturers. and i'm heartened by the fact that while there's a lot of controversy over the solar panel 301 decision, reality is plants are reopening here. the sky has not fallen. and we have to take some risks in order to change the terrible practices from before. many of these other countries have been able to victimize us
3:43 am
for too many years. and it's taking a little while for them to adjust to the fact that it's not the same relationship anymore. >> time is expired. mr. schweikert, you're recognized. >> thank you, mr. chairman, mr. secretary, the joys of trying to do this in three minutes. so my first one is just an inherent concern, and you see it in the wall street journal and others is that as tariffs move forwards the bull commodity side that the fabrication side gets done offshore. and being from arizona where we do lots of very specialized fabrication fora aero space, fo technology, allay my concerns. >> i handed out charts to the committee showing the trends in
3:44 am
commodity prices of steel and aluminum versus output in the consuming industries. and i think you'll see there's relatively little correlation between the two. >> mr. secretary, in having looked at the charts i respect the concept saying, hey, the input costs did not change much. but that does not change the incentive for the country that we believe is cheating by central planned overcapacity or what it may think, fine, we'll just do the finished product here instead of shipping the bulk product. legitimate concern. i'd love to find a much more elegant way to allay a concern that cheating just doesn't move to -- we'll just finish the product and send it that way. >> as i mentioned in response to a question earlier, we're fully prepared, if someone circumvents this, by upgrading the product to a higher state of
3:45 am
manufacture, we will bring trade actions against it. we've been very vigilant against circumvention. >> you just moved to my second question. we are party to a number of bilateral trade organizations. some that have authority over a pursuit of overcapacity, you know, industrial policy. and we have international agreements to dial that back and penalize that. we have wto. what is happening in our bilateral trade agreements also as coupled with what we're doing unilaterally? >> well, the wto, there is the global steel forum that's now met, i think, something like seven times. unfortunately, as is so often the case with big public fora, it's become a debating society without reaching any conclusion. we think that historically a lot of time has been wasted debating
3:46 am
rather than acting. this administration will be activists. >> i will beg of you, even though the system doesn't completely allow it, automatic mi -- maximize transparency to avoid disruptions in pricing and commodities. my fears, i spend a lot of time looking at futures and i've seen a lot of weird things, whether it be individual profiteering, it does create a cascade effect throughout the specialized fabricators. >> the last way to help the steel and aluminum industries would be to destroy their customers. so we're very, very mindful of that. >> thank you, mr. secretary. >> thank you. time is expired. ms. walorski, you're recognized. >> thank you. i want to talk about the graph you referenced earlier. i'm grateful that you included the rv industry in this. you say this chart says that the rv industry will be fine. with all due respect, this chart
3:47 am
cannot speak. but the rv manufacturers in my district can. what they and other manufacturers in my district have been telling me over the last year is that while tariffs take effect tomorrow, the mere threat of tariffs has been felt already. one rv manufacturer told me the same model is 8.5% more expensive compared to last year. a trailer manufacturer has had to raise prices 25 po 30%. he told me on the phone i'm livid. we are getting destroyed. he said the tariffs haven't started, but they've been felt. i can tell you how many manufacturers have told me about steel and aluminum shortages already. i can't tell you how many manufacturers who already source their steel and aluminum domestically who we shouldn't want to hurt, but have seen the price of their inputs increase anyway. again, the tariffs start tomorrow, but they've already been felt in these industries. i've heard from manufacturers that source from abroad, not
3:48 am
because they want to, it's because they are forced to, the domestic suppliers simply refuse to make the input for their specifications. whatever happened to the customer is always right? well, those business owners are now worried that the very same supplier that refused to make their product to specs in the last year now only needs to say that they could make it to prevent an exclusion hurting these industries further. here's the thing, the rvs, boats and trailers manufactured in my district are price sensitive. 8.5% increase is real money to real people. a couple looking at that increase may say, well, we're going to wait or spend the money on something else. for pontoon boats, a 10 cent increase in aluminum increases the boat cost by $750. a company that normally sells 2,000 pontoons would only be able to sell 400 with that increase, and pontoons are already on the eu retaliation
3:49 am
list. we saw 23% unemployment during the financial crisis, devastating for workers, families, companies and communities. but they've rebounded. and unemployment is around 2% right now. but they're worried that the momentum they worked so hard to claw back is about to be reversed. what your that is right does show, mr. secretary, is that steel and aluminum prices have spiked in the last year. and what rv manufacturers are telling me, that means for them, is that where they once expected 10% growth this year, they're now hoping for flat growth. i appreciate your charts that are trying to educate me on what's happening in my district. but i'm telling you, that simply is not the case. >> i think it's unfortunate that there's been a lot of speculation on the part of people withholding inventory, people jacking up prices. if you look at the price movement, it actually is well in excess of any possible impact that the tariffs might have.
3:50 am
so there's been a lot of speculation going on. i think you'll see things adjusting once people understand what the real situation is. i think it's very unfortunate that speculators tried advantage of the consuming industries during recent months. >> this is about jobs in my district. and we've seen the price increases in the last year. so what starts tomorrow, i'd have to see proven wrong pretty quickly, because this is a danger to jobs. >> thank you, your time is expired. >> thank you, mr. chairman. >> mr. lahood, you're recognized. >> thank you, mr. chairman, and welcome, secretary ross. i have to tell you, secretary ross, i disagree with the administration's approach when it comes to trade ask ta-- and tariffs. what's a business frustrating is last year we passed one-in-a-lifetime tax reform. hadn't done that in 30 years.
3:51 am
having real effects on the economy. you look at regulatory relief in almost every sector of our economy. then i look at what the administration is doing on trade. the tariffs. what's going on with nafta. the fact that we're 14 months into this administration, we don't have one bilateral trade agreement. we talked about having a lot of those. and i think we're shooting ourselves in the foot when it comes to the economy as it begins to take off, with low unemployment we have in this country. so i tell you that, and then i just tell you a little bit about my district that i represent. agriculture's the number one industry in the state of illinois. many of the constituents in my district supported the president, many in rural america did. and i look at what's going to happen because of your policies when it comes to trade, comes to tariffs. and the word that comes up all the time with my farmers is, retaliation. you look at what's happened in the past. and the largest importer to china of soybeans is from the united states.
3:52 am
and that's -- farmers are worried about that and that retaliation. what can you tell my farmers to assure them that they're going to be okay? >> well, i think the real fear is the fear of the unknown. the unknown that there's a potential vulnerability. i believe that the actual outcome of all this will be far less severe than things that people are worried about. substitution of products from other countries into china, for example, displacing us, will for the most part reopen those markets to american exports. so it will not be a one-to-one match and it will not necessarily be simultaneous. but it's not an easy thing to substitute. i promise you, if china thought they could get the material as cheaply from brazil or argentina, they'd be doing it right now.
3:53 am
>> and let me just switch subjects. i want to quote something from the tax foundation. the title of this article is "lessons from the 2002 bush steel tariffs." "the effects of higher steel prices, largely a result of steel tariffs, led to the loss of nearly 200,000 jobs in the steel consuming sector, a loss larger than the total unemployment of 187,000 in the steel producing sector at the time." can you comment on that? >> yes. those jobs that were lost were mostly lost in the months before the steel tariffs were put in by president bush. so it's an inaccurate total. it is not due to that. second, a large portion of the reasons why the steel industry didn't gain more jobs is we worked a new contract with the steel workers union. we cut 35 job descriptions -- 32 job descriptions down to five. we made changes in work rules so
3:54 am
that people could be running more efficiently. i'd be happy on another occasion to go in much greater detail. but the itc in fact found that the ultimate effect of steel brings where between 65 million positive to the economy, and 135 negative. and that it was such small numbers relative to the economy that you really couldn't pinpoint the difference. so those alarmist things that you've seen in the paper do not have statistical support. >> all time is expired. >> thank you, secretary. >> thank you, mr. la mood. mr. bishop, you're recognized. >> thank you, mr. chairman. thank you, mr. secretary, for your time today. you faced a myriad of questions and issues. i'd like to take this opportunity as a michiganer to sound the alarm on behalf of the
3:55 am
american manufacturing industry. i represent michigan. our tool and die makers face chinese tool and die makers who continually dump their product and undercut american prices. now dominate the market for tools used by american automakers to produce major body shield stamping. these companies in michigan are desperate. they face extinction. and they personally told me the problem with competing with china is more than just labor. the chinese government subsidizing stamping and die shops in many ways. export credits which refund up to 30% of the cost of tools. their government builds elaborate state-of-the-art tool and die shops filled with modern machinery equipment before the company even moves in, then they never ask for repayment. the government also subsidizes all kinds of training for their diemakers. as a result of all this, the business is going away. prices for chinese -- chinese
3:56 am
prices soar low that american suppliers cannot afford to buy their major dies from anywhere else. since no work exists here in the united states, the industry has lost approximately 70% of the companies and 80% of its skilled jobs. one michigan company, before the chinese onslaught, advises me that they employed 350 people. this is a major company, one of the last remaining. they now only have 127 employees left. there is clearly a long-term problem. when china controls the cost and delivery of tools needed to produce auto parts, they will take over the production of major equipment, tools, automotive supplies, even defense equipment. this issue is far bigger than the economy, it goes all the way to national defense. i know we only have three minutes. but i would be remiss if not raising this issue to your attention. i hope that i can work with you
3:57 am
and your department to address this issue on behalf of not just the american automakers, but on behalf of our country who we're caught flat footed right now in a world that is stealing our manufacturing industry. and it behooves all of us to do whatever we can to work together to find the solution. >> we're trying very hard to fix these problems. and the tragedy is that they weren't dealt with sooner. it would have been a lot easier to do it sooner. because these malfactors have been spoiled by getting away with it for far too long. we intend to stop it. >> thank you. mr. cabello, you're recognized. >> thank you, mr. chairman. mr. secretary, thank you so much for your time here today. i want to commend the administration's efforts to hold the chinese accountable. i think it's clear to everyone
3:58 am
that they undermine our economy, they undermine our workers. and holding them accountable is certainly the right thing to do. i would also ask the administration to try to do right by our friends and allies throughout the world. the europeans. here in the americas. the argentinians are concerned. these are countries that are trying to do right by the united states and by their own people and strongly encourage you to do everything you can to accommodate them so that we can continue building those important alliances and friendships. and i agree, i think trade is best conducted -- business is best conducted with people with whom we share values. and i think as long as the administration's policy fits that idea, i think it can be successful. but there are some very obvious risks that you have heard repeated here numerous times today. i want to bring a separate issue but that's very important to the farmer community in my district.
3:59 am
south florida is home to the largest -- one of the largest ag-producing areas in the state of florida. the warm weather in south florida allows our farmers to grow crops there year round. despite a long-standing suspension agreement design under u.s. trade law to eliminate the injurious effect of the dump imports, mexican tomatoes continue to surge into the u.s. market, impacting the domestic tomato industry. lack of enforcement and circum vention of these agreements since put in place in 1996 has intensified, as within that period one of the most recent suspension agreements alone, 2014 to '16, imports from mexico have risen 21.5%, while u.s. production has fallen 14%. this comes on the heels of a 303% increase in mexican tomato imports over the last 25 years with mexico supplanting the u.s. as a dominant supplier in the u.s. market. all with supposed anti-dumping
4:00 am
trade remedies in place. this is threatening the future of florida and the larger domestic tomato industry. i understand you are negotiating for a new anti-dumping suspension agreement with mexican tomato exporters. can you assure the committee you will work with the u.s. tomato industry to get an agreement that will eliminate the injury dumped mexican tomatoes are inflicting on the domestic tomato industry? >> i've spent a lot of time with the tomato growers association in florida. and at this request we reopened with the consent of the mexicans the suspension agreement. it really has not worked the way that it was intended to. and that's unfortunately true of many of the trade agreements this country has had. we're trying to fix it. >> thank you, mr. secretary, i yield back. >> gentleman yields back. mr. secretary, clearly a pretty consistent message here of
4:01 am
support for cracking down on china's theft of intellectual property and our technology. strong support to make sure that american workers and families aren't punished for china's misbehavior. your exclusion process is key to that. we encourage you to use all your resources and thoughtfulness in applying that exclusion process in a good, positive way. i also want to echo what other members have said, which is, we thank you for your service, your experience, your insight make you the perfect person for this discussion at this time. with that i would like to note, members of the committee have two weeks to submit written questions to be answered later in writing. those questions and your answers, mr. secretary, will be made part of the formal hearing record. with that, the committee stands adjourned. >> thank you, mr. chairman and committee members.
4:02 am
4:03 am
4:04 am
friday listen to the supreme court oral arguments for
4:05 am
national institute of family life advocates versus bacera, the issue of crisis pregnancy centers and freedom of speech. coverage starts 8:00 p.m. eastern on c-span2. on saturday at 8:00 p.m. eastern on book tv on c-span2, ben steele chronicles the efforts to rebuild western europe following world war ii in his book "the marshall plan: dawn of the cold war." at 11:00 p.m., it's the 2018 national book critics circle awards. saturday on american history tv on c-span3, at 7:05 p.m. eastern it's nancy pelosi's smithsonian donation ceremony where she donated artifacts from her swearing-in, including the speaker's gavel, a copy of her speech, and the suit she wore. at 10:00 p.m. on "reel america," the oval office speech by president lyndon b. johnson
4:06 am
thousandsing he would not seek re-election. followed by nixon for president campaign film showing the former vice president meeting voters in new hampshire and wisconsin. sunday on book tv at 7:00 p.m., "political" magazine editor joshua zeitz examines the creation and enactment of lyndon johnson's great society legislation. 9:00 p.m. eastern on "after words," sarah mcbride discusses her life as a transgendered person and lgbtq rights in "tomorrow will be different: love, loss, and the fight for trans equality." sunday on american history tv at 12:55 p.m., remembering the life and legacy of william f. buckley jr., the tv personality, political activist, and founder of "the national review" who died in 2008. 8:00 p.m., the presidency, the relationship between george washington and native americans is examined by author colin callaway in his book "the indian
4:07 am
world of george washington: the first president, the first americans, and the birth of a nation." this sunday on "1968:america in turmoil," the presidential election of 1968 began with eight presidential candidates. by the end, the sitting president bowed out, robert kennedy was assassinated, television coverage was dominated by violent clashes between chicago police and protesters at the democratic national convention, and richard nixon won a decisive victory. joining us, pat buchanan, who served under presidents nixon and reagan, author of "the greatest comeback: how richard nixon rose from defeat to create the new majority." and barbara perry, codirector of the oral history program at university of virginia. watch "1968:america in turmoil" live sunday at 8:30 a.m. eastern
4:08 am
on c-span's "washington journal" and "american history tv" on c-span3. c-span, where history unfolds daily. in 1979, c-span was created as a public service by america's cable television companies. and today we continue to bring you unfiltered coverage of congress, the white house, the supreme court, and public policy events in washington, d.c. and around the country. c-span is brought to you by your cable or satellite provider. energy secretary rick perry recently testified before the senate energy and natural resources committee on the president's 2019 budget request for his department. he also talked about energy infrastructure modernization and cyber security. his testimony is 90 minutes.

10 Views

info Stream Only

Uploaded by TV Archive on