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▶ 0:04:03the subcommittee will come to order thank you to the subcommittee members and Witnesses for joining us today for our first trade subcommittee hearing of the 119th Congress anticipate this will be a busy Congress for the subcommittee to contemplate a or to complement a rigorous trade agenda for the executive branch I would also like to acknowledge congresswoman Linda Sanchez from California our new subcommittee ranking member and I look forward to continuing bipartisan efforts on the subcommittee with you now
▶ 0:04:34turning to the topic of today's hearing American Trade enforcement priorities on his first day in office president Trump laid out a strong vision for our nation's trade policy through the America First Trade policy memorandum this Vision Builds on the many successes of President Trump's first term and after four years of inaction I'm confident we can work together to write the ship for too long American businesses workers farmers and Ranchers have faced an unlevel playing field field yet the previous administration refused to take the enforcement action needed to
▶ 0:05:04protect American interests which is why I was glad to see strong and strategic trade enforcement featured prominently on day one of the new Administration I appreciate the administration established a deliberative process to incorporate Congressional and stakeholder feedback into the American Trade agenda this is precisely why why we are holding this hearing today to ensure a bipartisan opportunity to outline and clearly demonstrate Congressional trade enforcement priorities while the Trump administration reviews and analyzes key trade
▶ 0:05:34enforcement issues effective enforcement starts with using all the tools at our disposal to ensure fair treatment for American Products including the enforcement tools established in our trade agreements because of President Trump's vigorous engagement on trade and successful negotiations during his first term the Biden Administration inherited two new agreements with strong enforcement mechanisms the United States Mexico can't Canada agreement usmca and the economic and trade agreement with China often known as
▶ 0:06:04phase one agreement unfortunately the Biden Administration declined to enforce the China agreement entirely and had a mixed record of success in enforcing usmca for instance China did not fulfill its structural or purchase commitments for us agriculture products and faced no consequences under usmca American Energy and mining companies faced continued discriminatory treatment in Mexico and in some cases outright expropriation the Biden Administration filed a request for
▶ 0:06:34consultations related to many concerning energy issues under usmc's dispute settlement mechanism in July 2022 which I supported however the Biden Administration never took additional steps to pursue this dispute in some cases the Biden Administration actively worked to undermine the interests of us companies facing expropriation similar enforcement challenges were also seen with Canada US Str failed to effectively enforce us rights regarding dairy market access and it took months
▶ 0:07:05of bipartisan urging for the USR to challenge Canada to discriminatory Digital Services tax however this challenge like so many like so much under the administration's passive trade posture languished in consultations we must recognize enforcement delays particularly with key Partners like Canada and Mexico not only hinder Market certainty for domestic Industries but also embolden trading partners to take similar actions when Mexico provided the United States with
▶ 0:07:35ample warning of their intentions to restrict us biotech corn exports it was met with slow walked complacency while the dispute panel eventually ruled in our favor I am disappointed it took four years when immediate engagement by the Biden Administration could have prevented the policy from ever going into place standing up for science-driven rules-based trade requires a sense of urgency and I am concerned the previous administration's record of undermining or delaying enforcement will not only lead to similar issues under
▶ 0:08:05usmca but also encourage other countries to follow suit contrast this with the first Trump Administration which alongside many other enforcement initiatives took Swift and decisive action using section 301 against the Digital Services taxes proposed by France and other nations just last week the president announced discriminatory policies would continue to be a focus of his enforcement policies during the current term on digital trade issues this Administration will not stand by as foreign governments
▶ 0:08:35including allies and partners like the EU Canada and Korea attempt to regulate American innovators out of existence each of these markets has enacted or proposed regulatory measures specifically aimed at imposing massive fines and regulations on our companies our closest Partners should not be allowed to Target our businesses creating an environment where American businesses can Thrive and continue developing World leading products and services doesn't end with digital trade giving our partners a
▶ 0:09:06pass on unjustified practices such as the trips waiver expansion can have a chilling effect on advancements in many fields not the least being healthc care strong IP rules and enforcement are essential for fostering Innovation economic growth and prosperity but us companies must operate and compete in countries with weak IP protections to combat this USR should take an active role in ensuring F foreign governments respect and Safeguard American innovation
▶ 0:09:36or face real consequences for failing to do so there is no shortage of issues to discuss today and I certainly look forward to a robust conversation I now recognize the ranking member Miss Sanchez Miss Sanchez for her opening statement thank you Mr chairman it's a pleasure to be here with you for the first time as ranking member and thank you to our Witnesses who have taken the time to be with us today this committee appreciates your time as we try to make sense of this administration's trade policies though it
▶ 0:10:06seems to boil down to threats a lot of tariffs and an insatiable hunger for Revenue to pay for huge tax cuts for the rich at the top I want to put to rest the myth that foreign countries pay for tariffs let's set the record straight American families pay for tariffs in the form of higher costs for goods and services for example the the president's new tariffs on Goods like Pharmaceuticals and lumber will increase housing and Drug costs for the average American the president
▶ 0:10:36shouldn't burden Working Families by misusing tariffs to deal with every foreign policy disagreement that he has let me be clear tariffs are an important tool in trade policy they can help level the playing field for domestic Industries but they cannot be our whole trade policy while I've heard a lot about tariffs from the president I have not heard how they will be PA with Investments to onshore manufacturing and create jobs if we care about workers who've been displaced by trade
▶ 0:11:07where is the funding for trade adjustment Assistance or are these tariffs just an excuse to fund new tax cuts for the Elon musks of the world today's hearing ostensively is about enforcement the president talks a big game about enforcement but you can't just say you want enforcement you have to fund it you have to put your money where your mouth is every day we hear about thousands of federal workers being illegally fired how do we enforce the laws if we've lost our enforcement capability and what about the businesses and
▶ 0:11:37workers who depend on those agencies to assess dumping and counterveiling duties to protect IPR rights to hold countries to their environmental commitments and to combat forced labor the president's first trade action the America First Trade policy memo proposed reviews due April 1st that may guide new enforcement actions however however the president's Reckless approach meant he couldn't even stick to his own plan and wait for the review instead he immediately threatened massive terrorists on Canada
▶ 0:12:08Mexico and Colombia in each case the president's use of economic coercion against our allies hasn't been to solve trade issues but to further his inhumane agenda meanwhile he imposed only a 10% tariff on China far less than the 60% he promised in his campaign he also walked back his promise to close the DI Minimus loophole for China what changed China certainly hasn't stopped exporting fentanyl or stealing
▶ 0:12:38intellectual property this begs the question is he flip-flopping on his policies because his billionaire friends have Investments with China Mr chairman I agree our trade policy needs a serious review for too long our policies assumed a rising tide would lift all votes however too many working families are not staying afloat China has fundamentally changed the trading system and many of our trade policies have hurt American workers and American industry but the answer isn't to build
▶ 0:13:08walls around our country we must invest in our communities and protect industries from predatory Trade Practices like China this will require us to work with our allies not against them this takes thoughtfulness not chaos and threats that we have seen from the president this committee cannot stand by as the executive Branch runs rough shot over the Constitution and raises prices for all Americans I hope this hearing marks A Renewed mission for this body to craft
▶ 0:13:38thoughtful trade policy and reclaim our congre our constitutional prerogatives thank you and with that I back thank you now have the pleasure of introducing our Witnesses for today's hearing Ambassador Greg Dow is president and CEO of national milk producers Federation he was the Chief agriculture negotiator at USR during President Trump's first term Ambassador Jeffrey Gish is partner at shagrin
▶ 0:14:08Associates he was Deputy USR during President Trump's first term Jonathan mcale is vice president at computer and Communications Association Kevin rosenbom is executive director at International intellectual property Alliance and Greta p is a partner at Wy Ry LLP she was General Counsel at USR during the Biden Administration welcome all and thank you for sharing your insights uh here today your written statement will be made
▶ 0:14:38a part of the record you will each have five minutes to deliver your remarks I would add that once you see that yellow light if you could bring the flight in for a smooth Landing quickly we would appreciate that Ambassador Dow you recognize for five minutes good morning chairman Smith ranking member Sanchez and distinguished members of the sub committee thank you for the opportunity to testify today my name is Greg Dow and I am proud to be here as president and CEO of the national milk producers Federation nmpf
▶ 0:15:08is the voice for America's Dairy Farmers and cooperatives here in Washington having served as USR Chief a negotiator in the previous Trump Administration as well as senior professional staff for the agricultural trade issues on the Senate a committee I know firsthand how critical exports are for American Agricultural Industries this is especially true for the US Dairy Community last year American Dairy Producers exported more than 8 billion in dairy products overseas equivalent to 18% of total us
▶ 0:15:39milk production much of that success is directly attributable to existing us trade agreements which have helped us Dairy exports increase by roughly 7 billion dollar in the pl past 20 years in fact we run a dairy Trade Surplus with each of our bilateral trade deal Partners we have reach these Heights despite being forced to operate at a significant disadvantage to our International competitors for well over a decade now while the European Union and New Zealand have been
▶ 0:16:09successfully negotiating trade agreements with key Dairy importing countries the US has not kept pace in addition to pursuing greater Market access Congress and the administration have a responsibility to work together to enforce existing us trade agreements trade enforcement is not a matter of political or legal technicalities we we have seen that inadequate enforcement has real world consequences by restricting opportunities for American farmers while we proudly export products to all corners of the globe
▶ 0:16:39there are four regions that are of particular economic importance to the US dairy industry when it comes to trade enforcement the first is North America 44% of total us Dairy exports worth about 3.7 billion are shipped to our nearest trading partners Canada and Mexico while Mexico has largely been a positive trading partner Canada has not unfortunately Canada Canada has a long history of attempting to undermine previously agreed to Market access a trend that is continued under usmca
▶ 0:17:09through manipulative tariff rate quota policies and a systemic circumvention of us mca's Dairy protein export disciplines Canada has cheated us exporters out of the market access benefits promised to them under the agreements and has tried to dispose of growing volumes of artificially low priced Dairy protein into Global markets the 2026 usmca review represents a critical opportunity to ensure Canada reforms these underhanded practices second we have the European Union
▶ 0:17:40the scale of our trade deficit with the EU is truly staggering EU Dairy Producers export $3 billion wor the products to the United States while us Dairy Producers export $167 million in dairy products to the EU in fact the US exports 15 times more cheese to Guatemala last year than to the entire European Union while we continue to face a moving Target
▶ 0:18:10in exporting Dairy to Europe the US lets European exporters reach our Market smoothly and without much scrutiny if the lack of Market access for us agricultural products wasn't enough the EU has abused Geographic indication rules over the past decade to Target food and beverage products by Banning American prod producers from using common names like parmesan and feta the EU has essentially prohibited us from selling our products into Europe as well as in key export markets where
▶ 0:18:40the EU has negotiated protections for its illegitimate GIS this is an unsustainable disparity that requires a fundamental reset the third priority is ensuring that China pulls its end of the 2020 Phase 1 trade agreement that was negotiated during the first Trump Administration while the agreement has been an overall benefit to us Dairy we are counting on the US government to further negotiate with China to increase their purchases of us dairy products by facilitating trade with lower tariffs
▶ 0:19:10protection for common names and timely approval of us Dairy manufacturing facilities finally I would like to touch on India which has used High tariffs and unscientific certif certification requirements to block most us Dairy exports since 2003 should Congress reauthorize the GSB program we urge USR to ensure India meets its Market access obligations under the program prior to restoring any GSB GSP benefits to India
▶ 0:19:41we were encouraged by the president's executive order on an American First Trade policy which sets the stage for new bilateral or sectorial agreements and by the prospect of using his fair and reciprocal plan to address the Steep Dairy trade imbalance with the EU looking forward we ask that Congress and the administration continue to pursue this goal and strike new trade deals that cut tariffs and Tackle non-tariff trade barriers we are hopeful that the US government will take this dynamic as a challenge to stand up for us Dairy Producers
▶ 0:20:12and the US agriculture thank you again for your time and the opportunity to testify before you here today and I look forward to answering questions thank you Ambassador and next Ambassador garish you're recognized for five minutes good morning chairman Smith ranking member Sanchez and distinguished members of the subcommittee thank you for the opportunity to appear before you today to discuss the trade enforcement priorities of the United States during the first Trump Administration I had the privilege to serve as the deputy us trade representative for Asia Europe the Middle
▶ 0:20:42East and Industrial competitiveness that experience in my time in private practice representing American companies and workers fighting against unfair trade have demonstrated vividly the need for strong trade enforcement to protect the economic and National Security interests of the United States countries around the world engage in trade policies and practices that harm American companies workers Farmers ranchers and innovators both here in the United States and in export markets
▶ 0:21:12I would welcome the opportunity to discuss the trade issues we face with all of our trading partners as the hearing proceeds but I will focus my opening remarks on China the problems we face with China and the threat they pose to the National Security and long-term competitive to the United States cannot be overstated China has used a range of unfair and Market distorting trade policies and practices including huge subsidies forc labor Forest technology transfer intellectual property
▶ 0:21:43theft and currency manipulation to achieve its objective of dominating important sectors of the global economy in Industries like steel aluminum chemicals and solar China has repeatedly followed its Playbook of massively subsidizing its Industries creating enormous excess capacity and flooding Global markets with its products in the first Trump Administration we made important progress in reversing the failed trade policies of the past and correcting our unfair and imbalanced
▶ 0:22:13trade relationship with China the key piece of this was the tariffs imposed on us Imports of Chinese Goods under Section 301 of the trade Act 1974 the section 301 tariffs have led to a significant Improvement in the terms of trade between the United States and China the US trade deficit in Goods with China has dropped by over 21% since the tariffs were imposed and China's share of us Imports has fallen significantly we were also successful in negotiating The Phase 1
▶ 0:22:43trade agreement with China the agreement contains binding and enforceable requirements for China to make significant structural reforms in the areas of intellectual property technology transfer agriculture financial services and currency and exchange rate practice I while the lack of transparency in China makes it difficult to conduct a full assessment of China's compliance it appears that China has failed to abide by the requirements of the agreement in a number of areas cutting across each of the chapters of the agreement
▶ 0:23:14the US trade representative will be conducting a review of China's compliance with the phase 1 Trade Agreement as one of the actions under the America First Trade policy memorandum issued by President Trump if the uscr determines that China has violated the agreement the United States should use the agreement's strong enforcement mechanism to take Swift action that action should include the imposition of additional tariffs on imports from China we also need a range of other ambitious trade actions to address the threat that China poses
▶ 0:23:45one such action is for Congress to revoke China's permanent normal trade relations status granting pntr to China was a colossal mistake and American workers and companies have paid the price for it the time has come for that mistake to be corrected Congress should also strengthen us anti-dumping and counterveiling Duty laws to improve trade redy enforcement including by passing the leveling the playing field 2.0 among other improvements
▶ 0:24:15this legislation would direct the Department of Commerce to countervail crossborder subsidies provided by a government in one country to a recipient in a third country and would address situations like China's belt and Road initiative it would also streamline successive trade remedy investigations that often become necessary when Chinese companies shift operations to a third country to evade duties in addition we should close the Dom Minimus loophole that allows Chinese Imports to escape Duty liability any Imports subject
▶ 0:24:45to higher Duty levels including those subject to section 301 tariffs should be excluded from di eligibility finally we need to expand our efforts to address the duty avoidance practices Chinese companies employ that undermine the effectiveness of our trade enforcement actions among other steps the enforce and protect act should be applied to the evasion of section 301 and section 232 duties failing to address China's economic aggression will bring enormous long-term costs in the continued offshoring of
▶ 0:25:15jobs and industries the loss of our technological and Military superiority and economic dependence on China China's Ambitions pose an existential threat to the United States and a comprehensive trade enforcement agenda is essential to counter that threat thank you thank you Ambassador next we have Mr male you recognized for five minutes chairman Smith ranking member Sanchez members of the subcommittee thank you for the opportunity to testify today
▶ 0:25:46my name is Jonathan mccale and it is my pleasure to provide comments as the committee examines enforcement priorities with respect international trade the computer and Communications industry Association is an international membership Association representing the broader Digital Services industry our members rely heavily on open Global markets which support hundreds of billions of dollars in domestic Investments and hundreds of thousands of American jobs in the digital sector alone
▶ 0:26:16access to foreign markets generates hundreds of billions of dollars annually for the US economy driving a significant part of the almost $300 billion Trade Surplus in service that the us enjoys to sustain these economic Investments and ensure continued US economic leadership maintaining access to foreign markets is absolutely critical yet this goal is increasingly under threat as Nations continue to enact discriminatory laws
▶ 0:26:47with the primary effect of hurting the US economy the best response is to deploy empowered trade officials backed by strong Congressional support with a primary Direct Ive to stand up for us companies and to forcefully push back against egregious trade barriers discriminatory trade barriers in foreign markets expand every day currently ccia is tracking measures in 54 countries across four categories including discriminatory taxation
▶ 0:27:17often referred to as Digital Services taxes forced Revenue transfers to domestic competitors asymmetric platform regulation that targets us firms and data localization and restrictions on cloud computing to elaborate Digital Services taxes or dsts are discriminatory taxes imposed on us firms based on Jerry mandard service definitions and revenue thresholds they cost us companies billions of dollars
▶ 0:27:47annually putting our digital service suppliers at a significant competitive disadvantage in the markets where the taxes are enforc we count over a dozen countries implementing such taxes and many more are actively considering them notably our neighbor to the north Canada will be the newest country to start implementing a DST starting this coming June forced Revenue transfers are another discriminatory and extractive policy targeting us firms the most
▶ 0:28:17egregious examples are measures affecting news in Australia Canada and Indonesia measures affecting online video in Canada and the EU and proposed in Australia and network usage fees proposed are under consideration in Korea Brazil Colombia and the EU asymmetric platform regulation encompasses efforts like the eu's digital markets act that targets leading us companies with Brazen rules addressing speculative
▶ 0:28:48harms with the effects that undermine security sty Innovation and extract valuable American IP under the guise of promoting these laws which are designed to apply predominantly to us businesses cost billions of dollars in compliance and often degrade consumer experience other countries are eagerly following suit Japan is now uh adop implementing analogous rules turkey Korea Australia and Brazil are
▶ 0:29:18considering versions of their own data localization severely restricts us companies ability to offer online services particularly in crossborder context and increases cyber security risks to both American and foreign customers where us cloud computing companies choose to invest in a foreign market they are often banned from servicing government or critical infrastructure customers key examples include France Korea and Mexico
▶ 0:29:48with the unfortunate reality that other countries will continue seeking to hijack the success of us firms us leadership to push back on these categories of TR trade barriers is Paramount the economic benefits of digital trade combined with the cost of inaction cannot be overstated to that end CCI believes that the Urgent engagement with trade Partners must be a priority in all cases forceful use of available trade remedies including uh section 301
▶ 0:30:19or exploration of disincentives based on us domestic tax rules should be a potential response these efforts will no doubt signal that other nations should think twice about implementing discriminatory laws that Target great companies who provide so much to our economy thank you and I look forward to your questions thank you Mr Mel now recognize Mr rosenbom for five minutes thank you chairman Smith ranking member Sanchez and distinguished members of the subcommittee thank you for the
▶ 0:30:49opportunity to testify before you today I am Kevin rosenbom the executive director of the international intellectual property Alliance the iipa a coalition formed in 1984 of trade associations representing the US copyright-based Industries working to improve copyright protection and enforcement abroad and to open foreign markets closed by piracy and other Market access barriers there is little doubt that us trade agreements have meaningfully contributed to the growth of the copyright Industries for the past 35 years
▶ 0:31:19the iipa has commissioned a series of studies documenting the contributions of the US copyright Industries to the US economy using the most authorita a publicly available US Government statistics according to the latest study the core copyright Industries added over $2 trillion in value to the US economy and created more than 11.6 million us jobs or 5.43% of the entire us Workforce with total compensation 50% above national average importantly foreign
▶ 0:31:49sales and exports from selected sectors of the US copyright Industries have grown from $22.3 billion in 1989 to $ 272.50 billion in 2023 this is a remarkable Story of Us export power and growth one that translates directly into strong us Global competitiveness good us jobs and growth in the overall US economy this period of extraordinary growth has occurred across roughly the same time range as the US adoption of
▶ 0:32:19numerous bilateral Regional and multilateral trade agreements each of these agreements from NAFTA in 1994 to its 2020 replacement usmca is designed to open foreign markets to us goods and services dependent on copyright protection primarily by mandating improved and modernized copyright laws and in most cases higher standards for on the ground enforcement of these laws the significance of these agreements cannot be overstated a 2024 oecd study on Services trade
▶ 0:32:49observes substantial Market access barriers for all services and that barriers for digitally enabled Ser Services which includes the creative Industries grew by 25% over the past 10 years the oecd further found that over 30% of the countries covered in its study impose restrictions on streaming and downloading platforms us ftas are one of the very few tools available to improve the creative industry's ability to compete overseas on a Level Playing Field in addition to opening markets trade agreements can help forestall
▶ 0:33:20efforts to close markets since the conclusion of the US Australia Free Trade Agreement Australia has several times considered imposition of quotas on the Online Marketplace these proposed quotas were rejected in part because they would be inconsistent with Australia's trade obligations including under Ida similarly since the 2004 entry into force of the US Chile FDA Chile has several times considered expanding its theatrical screen quota but this expansion has been consistently stalled in part
▶ 0:33:51because it would violate Chile's FTA obligations as impressive as this progress has been the copyright Industries have not fully benefited from these agreements because of the ongoing failure of many US Trade Agreement partners to fully Implement their agreement obligations for example the benefits of the usmca to the copyright Industries have been severely limited because neither Canada nor Mexico have fully implemented it Canada despite its usmca commitments is advancing implementation of its online streaming act which conditions Market
▶ 0:34:21access for streaming services on making Financial contributions into certain government link funds intended for domestic IC industry in Mexico even after a definitive May 2024 decision by the Mexican Supreme Court upholding the constitutionality of Mexico's uh 2020 reforms addressing its usmca copyright obligations Mexico still has not fully implemented these Provisions Mexico has not introduced implementing regulations which were required within 180 days of enactment
▶ 0:34:51of the reforms and are essential to putting these new laws into practice it is now well after the Supreme Court's decision and there is no indication that implementing reg regulations are forthcoming China's failure to fully implement the commitments it made in the US China Phase 1 agreement particularly its services purchasing obligations has limited the benefits of that agreement to the copyright Industries and in South Africa iipa remains concerned with two copyright reform bills that South Africa's president ramama fosa recent recently
▶ 0:35:21referred to the Constitutional court if enacted these bills would violate South Africa's trade commitments and the eligibility criteria of both GSP and agoa on intellectual property in some the positive impacts of us trade agreements that open up markets to us goods and services protected by copyright are significant and will remain so but the full benefits of these agreements will be realized only if us trading partners fully Implement them thank you for this opportunity to present the views of the iipa in this important hearing I look forward to
▶ 0:35:52your questions thank you Mr Rose mom and now recognize Miss Miss P for five minutes chairman Smith ranking member Sanchez and members of the subcommittee thank you for the opportunity to appear before you today I will address the importance of trade enforcement tools and resources a comprehensive China strategy and maintaining an across theboard enforcement agenda this subcommittee has a track record of creating new enforcement tools from the weager force labor prevention act to the groundbreaking rapid response mechanism in
▶ 0:36:22usmca which have helped to level the playing field for us workers and combat unfair Labor practice IES enforcement tools must continue to evolve with the trade challenges facing us manufacturers Farmers service providers and workers the leveling the plane field 2.0 act spearheaded by members of this subcommittee is the next front in combating China's attempts to get around trade remedies it will enable our Industries to counter China's tactics of moving production from one country to another and subsidizing producers in third countries
▶ 0:36:52as this example shows if we stand still in developing our trade enforcement tools we move backwards us Industries and workers rely on Personnel across the trade agencies to fully enforce trade remedies laws ensure Imports comply with enforcement actions and combat barriers abroad domestic Industries filed over 100 anti-dumping and countervailing Duty petitions with the Commerce department and the International Trade Commission last year nearly double the average annual petitions filed in the last 10 years Customs and Border Protection collects
▶ 0:37:22duties imposed under Trade authorities police's evasion of those duties enforces forced import forc labor import bands Works to keep fenol out of the United States and implements a host of other laws uscr is a lean agency with an outsid remit in trade enforcement all these agencies are stretched thin and reductions would jeopardize their work on behalf of us Industries and workers with respect to China this subcommittee has led the way in highlighting Chi how China's non-market policies and practices Target key sectors
▶ 0:37:53like steel aluminum ship building solar panels electric vehicles semiconductors and batteries we must use every tool to combat China's practices and their distortive effects including robust trade enforcement of Remedies laws and section 301 sector-based section 301 investigations such as those initiated by the last Administration relating to China's targeting of the maritime Logistics and ship building sector and the semiconductor industry can lead to targeted remedies tailored to those
▶ 0:38:23practices China's manufacturing overcapacity dis places producers all over the world resulting in other countries adopting policies to support Industries crushed under the weight of China's Supply further distorting the marketplace this has become acute as China has doubled down on it on exporting its way to growth instead of wiing ourselves off from the rest of the world we must work with allies and partners to stand up to China's predatory strategies and combat distortions on a global level a China strategy must also include a smart
▶ 0:38:54offensive game plan that targets key us Industries for growth and couples it with policies that incentivize moving away from overdependence on Supply chains in China Investments like those in the bipartisan infrastructure law chips and science act and inflation reduction act promised to give the extra boost needed to overcome China's unfair practices but could be even more targeted to increase us resiliency an enforcement strategy must have clear and calculated objectives adapt to challenges across all sectors and maintain us leadership and
▶ 0:39:24Forum the long-term imposition of tariffs may be appropriate to counter China's entrenched practices but for the trade barriers that span the 400 plus pages of Us's annual report posing tariffs without a strategy for removing those barriers will not help our Industries sell into new markets pos positive results come from changes that trading partners agree to make trade tools involving tariffs may be part of the strategy but they are only a means to an end an effective enforcement strategy must assert us leadership internationally
▶ 0:39:55China and Europe are adep at using standards bodies and other International rulemaking to their own advantage to the detriment of us Industries the United States needs to be at the table to fiercely advocate for our interests being at the table is also critical in the digital trade space even as we debate domestic regulation of the digital ecosystem we must participate in the international discussions as norms and rules are developed us leadership in the digital economy is too important and the implications for our future Prosperity too
▶ 0:40:26great to take a backseat finally the United States must lead at the WTO which remains an important forum for promoting transparency raising emerging issues and coming to Collective Solutions it can bring together all members of the global trading system to confront Collective trade challenges such as growing overc capacity and key manufacturing Industries the economic impact of climate change and the transition to lower carbon economies thank you again for the opportunity to provide input into the work of the subcommittee
▶ 0:40:58thank you thank you again to our entire panel for sharing your insights uh it's quite obvious that there's a lot of territory to cover here very broad topic but nonetheless a very important we'll Begin by recognizing the full committee chair Mr Smith uh with with his questions thank you thank you chairman Smith China has a long history of engaging and unfair Trade Practices and this committee has invested a tremendous amount of time in
▶ 0:41:28exposing those activities most notably China's use of our dominous policy um to avoid paying us tariffs last Congress we approved legislation that would have prohibited the use of of Dom Minimus on any Imports subject to president Trump's 301 tariffs this would have eliminated the privilege 70% of Chinese Imports Mr Gish Imports coming into the the country from
▶ 0:41:58China under the Dom Minimus policy spiked from 208 million packages in 2018 to more than 640 million in 2023 a 28% increase there is a lot of evidence that China's abuse of Dom Minimus accelerated to try to evade president Trump's section 301 tariffs without significant reforms Dom Minimus entries will undermine
▶ 0:42:29new tariffs that President Trump imposes this term do you agree that reforming Dom Minimus is an urgent priority to further strengthen president Trump's tariff and trade agenda thank you chairman Smith for that question and I do agree that reforming Dom Minimus is an urgent priority to make sure that our trade enforcement efforts are made as effective as possible China as you mentioned has really abused the Dom Minimus uh exception that's available
▶ 0:42:59here they account for the vast majority of the Imports that come in under the Dom Minimus exception and it has become a massive loophole in our trade enforcement efforts uh we really need to close all of the available loopholes uh that would undermine the trade enforcement efforts of the Trump Administration and of the United States and I think we should eliminate the Minimus eligibility for any Products that come in under the various
▶ 0:43:29trade enforcement actions that are taken including section 301 section 232 and our other trade enforcement measures as well thank you um president Trump is deploying trade policies to advance an American First Trade agenda that can deliver on multiple fronts whether it's enhancing our national security demanding fair treatment for American workers manufacturers farmers are bringing in new revenues to the government on
▶ 0:44:00the on that last Point president Trump's existing tariffs imposed during his first term on the Chinese Imports are already netting roughly $40 billion in additional revenues to the US each year and of course president Trump has already added an additional 10% tariff and all imports from China and has announced plans to impose significant additional tariffs Mr Gish given your previous
▶ 0:44:30experience working in the Trump Administration as a as a key leader on trade policy including with respect to China can you speak to the role that tariffs can play in increasing revenues and how president Trump's commitment to to aggressive use of tariffs serves a broader fiscal and economic agenda thank you chairman Smith tariffs can serve a significant role in raising revenue for the United States government already
▶ 0:45:01the tariffs that were imposed during the first Trump Administration have raised over $260 billion doll in revenue for the US government and I think the additional tariffs that could be imposed in the second Trump Administration have the prospect of raising potentially hundreds of billions of dollars each year in revenue for the US government so that is an important feature of tariffs that could be beneficial to the United States
▶ 0:45:31that's over over on top of of course the benefits that tariffs have in addressing unfair Trade Practices rebalancing our trade relationships growing manufacturing here in the United States as well as protecting our national security but the revenue raising aspects are an important feature that will I think increase as we as we go along thank you enforcement trade tools can protect American workers manufacturers and agriculture producers
▶ 0:46:01so long as we are willing to use them the Biden administration had a weak to non-existent enforcement record Congress had to constantly demand enforcement we countered Mexico's discrimination um against American corn exports and we'll have to remain VI Vigilant right there however numerous issues remain around the world and including Canada's unfair treatment of us dairy products Thailand's
▶ 0:46:3250% tariff on us beef the European Union's rejection of many biotech crops through a regulatory process that takes an average of six years to just complete an India's tariff on Bourbon which stood at 150% at the end of the Biden Administration and has been reduced to 100% thanks to president Trump's president Trump's leadership over the last five weeks Mr Dow
▶ 0:47:02president Trump will use every tool to aggressively enforce our trade policies including reciprocity where do you see the need for reforms or additional enforcement measures so that Congress and the Trump Administration can ensure our farmers and ranchers are treated fairly in our own backyard with Mexico and Canada and thank you Mr chairman for your question I think usda's uh
▶ 0:47:33perspective on this is we need to start with Canada and and our opportunity here to to have another look usmca uh Canada on the dairy side of the equation is has been very clever with how they uh administer their tariff Ray quotas uh you know they they allocate those to their retailers which essentially are those that are invested in the Canadian dairy industry rather than uh retailers and and uh to their processors rather than their retailers and and folks
▶ 0:48:03that we can sell to in Canada that that's one area but the other area that I'd really like to address today if you'll allow me a little bit is the European Union you know we have a 26 billion trade deficit with the EU and agriculture over almost three a little over three billion of that is dairy so we sell 15 times more cheese to Guatemala than we do the EU wow we sell twice as much cheese to Jamaica we sell more cheese to New Zealand 5
▶ 0:48:33million people the other major exporter in the world than the EU and and they're very clever about how they use certification requirements and non-ar of trade barriers and this goes back decades across all of Agriculture you know they make it very clear that they don't want our product and you know we're pretty good A exporter 175 billion plus or minus in exports you know you have to work pretty hard to run a26 billion EG trade deficit with us in the US those are those are incredible
▶ 0:49:04um statistics um uh one country I'm also particularly concerned about is Brazil um which imposes an 18% tariff on us ethanol while we impose a tariff of 25% on ethanol from Brazil meanwhile Brazilian exporters game the system to fill almost all of the US Global quota for tariff free
▶ 0:49:34beef this annual quota meant for trading partners around the world was filled mostly by brazilan beef by January 17th Mr Dow do you consider our agriculture relationship with Brazil to be fair and reciprocal no sir they're a stiff competitor with us uh what what's interesting on the dairy side of the situation with Brazil is that's almost kind of a cartel down there in terms of dairy production
▶ 0:50:04and uh in my travels with the USR I found it interesting uh when US Embassy officials returned to Brazilia from the US they take cheese with them because there's no product in Brazil that is even comparable and that's because Brazil BR blocks our products uh I worked on this ethanol issue it very very frustrating issue we did result olve a weed issue tariff Ray quoto issue with Brazil that we'd had for 25 years with them so it's uh you know Brazil's a stiff
▶ 0:50:35competitor but uh in agriculture uh there should be reciprocity today sir and there isn't thank you Mr Dow thank you chairman for holding this hearing thank you I now recognize Miss Sanchez for minutes thank you Mr chairman um Miss P Democrats on this committee were adamant during the usmca ren negotiation that the agreement include a strong enforc enforceable mechanism called the rapid response mechanism to promote Mexican workers
▶ 0:51:05freedom of Association and to protect their rights the rights of independent unions to negotiate with employers from your experience at USR was the RPM an effective tool and how can it be used more effectively thank you for the question the RM was an incredibly effective tool and the last Administration really showed the range and effectiveness of of the actions it brought 27 RM cases across sectors Automotive garments mining
▶ 0:51:36um benefiting at the end of the day around 36,000 Mexican workers um enabling them to uh bargain for better work conditions higher wages better hours and freedom of Association um which is of course incredibly important for those workers but more importantly it benefits our workers here in the United States because going abroad uh from from us production moving to Mexico should no longer be um incentivized by poor
▶ 0:52:06working conditions that was going to be my follow-up question why should American workers here care about workers rights in Mexico but it levels the playing field for it so that our workers can compete on roughly equal footing correct exactly I ignoring workers R should not be a competitive advantage of our trading partners and the RRM is a tool that can remedy that great thank you for that uh answer Ambassador Gish last year di Minimus shipments to the US hit a record 1.4 billion packages mostly from China entering with minimal
▶ 0:52:36inspection and bypassing all duties including the China 301 tariffs this dominous loophole um has gutted us manufacturing and Retail and facilitated the entry of illegal Contraband including fentanyl into the US largely inspection free given the high volume of shipments from China this issue cannot be solved by data collection or targeting a loan Congress needs to act to address this urgent problem now uh chairman Smith had asked
▶ 0:53:07um a similar question and you had answered that China abuses the DI Minimus provision can you I want you to kind of flush out more how China's abuse of the Dom Minimus exemption has impacted us production exports health and safety thank you ranking member Sanchez China has in my view abused the DI Minimus exception uh I think first of all it results in
▶ 0:53:37a reduced uh ability to enforce our our our our trade duties trade mechanisms that we have because they are avoiding the payment of all duties uh when they uh bring material in under the Dom Minimus exception so it undermines our trade enforcement efforts and and that cuts across all the various duties uh that are applied to uh Imports coming in so first of all it undermines our trade enforcement efforts it also as you
▶ 0:54:07mentioned is a a way for importers to to bring in fentol uh that's a massive problem that we need to uh we need to act against and and that's been demonstrated uh time and time again that that is a massive problem as well um and it it it just hinders the ability of us manufacturers to compete with these products just because they're coming under the dominous uh you know threshold they should not be free of the the
▶ 0:54:37tariffs and the duties that we've imposed to counteract unfair Trade Practices that are really intended in in many instances to level level the playing field with our us producers here so it it puts them at a competitive disadvantage as well thank you for that answer um and Miss P back to you again um I want to thank you for highlighting in your testimony some of the trade enforcement innovations that have emerged from this committee I also Echo your call for new enforcement tools including the bypassing of the bipartisan pardon me
▶ 0:55:07including the passing of the bipartisan leveling the playing field 2.0 in your comments you mentioned some of the tools that have been that have proven effective including the Peru Forest sector Annex the rapid response mechanism and the weager force labor prevention act you suggested that there may be ways to scale those mechanisms or adapt them to other areas I just would like you to elaborate a little bit more on that point how could they be applied to other areas sure
▶ 0:55:38and one thing that those uh tools have in common is that they are addressing um practices that are happening abroad that again undermine us companies us workers their competitiveness here and so there's lots of areas where there can be that can be applied taking the rapid response mechanism which addresses unfair uh labor practices failure to enforce labor rights um taking that to other agreements other markets where there's similar labor challenges um adapting that to environmental standards
▶ 0:56:08when countries fail to enforce environmental standards um not only does that harm the communities and the workers in those countries but again it's basically a form of subsidy where you're a country is allowing a a a company a factory to operate um under their own standards in order to to to have that export advantage to come to our uh markets without having to Bear those costs of of cleaning up pollution and and keeping
▶ 0:56:38their environment safe so those are just a couple examples thank you appreciate that I'm out of time I'll go back to the chairman thank you uh appreciate all the questions here we we do uh have a lot to ask I'm glad to say that I let a a letter last year regarding Colombia's counterveiling Duty investigation into us milk powder exports unfortunately as you know the Colombians moved ahead by imposing preliminary tariffs with an announcement on the final ruling expected soon I'm concerned that Columbia's use of politically motivated countervailing Duty
▶ 0:57:09investigations across Commodities including Dairy and ethanol will actually have copycat effects in other markets Ambassador Dow what actions do you think we should take uh to push back and and certainly send a message that would prevent other markets uh from trying to uh make similar moves that again undermine uh the entire process Mr chairman we share your concerns and and uh we haven't heard yet what's coming out of Colombia uh
▶ 0:57:39completely agree with you that this is 100% political uh and uh driving a domestic situation uh down there in Colombia uh we uh we just have to see what they're going to decide to do and whether uh you know the common sense will prevail in this kind of conversation but for good sakes we have a free trade agreement with Columbia uh this is a situation from an enforcement perspective uh I think the US government excuse me has been very aggressive but I think we need to continue to be very aggressive
▶ 0:58:09with our trading partners throughout the Western Hemisphere here to help folks understand that you don't solve domestic political issues on the backs of us a exports and uh that's exactly what's going on right thank you um it's important for the Trump Administration to assess commitments upheld and missed I want to emphasize in the US China Phase 1 agreement among other important issues there is an opportunity to meaningfully enforce China's patent linkage regime per its commitments Under
▶ 0:58:39The Pact and also to push for Meaningful and enduring resolutions to outstanding Market access issues tied to China's poor track record when it comes to approving a biotech applications Ambassador Gish I appreciate your testimony about phase one enforcement priorities across Ross the board in particular how should the Trump team address these shortfalls related to P patent linkage and Market access especially for a biotech products both in the context of the agreement and in the broader bilateral
▶ 0:59:09relationship thank you chairman Smith and in those two issues that you've mentioned patent linkage and and the a biotech Provisions were a couple of the most important Provisions that we negotiated as part of the phase one agreement with China uh on on patent linkage our our right holders continue to experience problems with uh the the inability to get early resolution of of patent disputes through the patent linkage system there's a lack
▶ 0:59:39of transparency they are not able to get preliminary injunctive relief and the relief that they get is doesn't last as long as they they need it to and there's a bias being shown for for Chinese companies in that process so it's a it's a major problem egg biotech is is there there similar issues uh similar problems that was that was a massive issue in the negotiations it's been a longstanding problem for for the United States uh again there's a lack of transparency uh we we
▶ 1:00:10did agree to have them Implement a science-based process with transparency they're simply not doing it and and uh our companies are not getting the approvals that uh and our farmers and ranchers are not getting the approvals that they should be getting through that process um and the process is also taking much longer than it should and and much longer than they agreed to take and they're also requiring information that's just not relevant to the use of the products that uh that are that are uh at at issue
▶ 1:00:40there so we have a very strong enforcement mechanism that we spent a lot of time negotiating in the phase 1 Trade Agreement uh we can we can bring disputes and resolve them within roughly 90 days and then the United States has the ability to take un FAL action to determine whether there's been a violation and if so what action to take that mechanism should be used by this Administration it should be used by Future administrations and uh to take action to enforce the
▶ 1:01:10commitments that China made in the phase one agreement sure I I appreciate that I think we all know that property rights in this case IP intellectual property uh is is a a contrast between China and the US in terms of L held principles and in the rule of law and so forth so uh I I just think with developing technology it's it's key that we stay on top of this which leads me to the next topic you know we saw
▶ 1:01:40the previous administration take a a position on intellectual property in Geneva relating to the trips waiver that I fear uh really sends a horrible message to the development further development of intellectual property a a cross Industries so it's not just Pharmaceuticals uh that you know the the message of uh we should encourage Investments not discourage Investments and so then then we see other uh intellectual property
▶ 1:02:11rights being violated in China certainly I think Mr rosenbom knows a lot about this but Mr rosenbom how how would you say we should assert reassert our Global Leadership on IP broadly speaking uh in this new era of enforcement where I think there's we've already seen more engagement both bilaterally and uh perhaps through multilateral organizations thank you thanks very much for that question it is important for the US to reassert leadership in promoting strong
▶ 1:02:41IP protections and enforcement abroad that has historically been the case the US led the way in incorporating IP protections into the Gat in the form of the trips agreement uh the United States has historically recognized IP as integral to economic and cultural growth and uh recognize the harm uh from uh foreign markets that don't adequately protect and enforce intellectual property um I noted the major contributions to the
▶ 1:03:11uh US economy uh from uh in my opening statement from the copyright Industries um and it's but it's also I think important to recognize that this is not just in the US interest um uh promoting strong uh copyright protection and enforcement uh actually benefits uh uh foreign uh countries as well most every foreign country uh has some form of a creative industry uh the wipo has looked at this
▶ 1:03:41they've done studies uh over 50 studies I think uh looking at uh countries developing and and and developed and found significant contributions from local creative Industries so um you know so this is a huge benefit not just to us stakeholders but all around the world the US should take leadership here and uh so for example it's critical uh for the US uh uh to to remain a leader in multilateral talks on advancing
▶ 1:04:12Pro I positions uh at the World Trade Organization the WTO and the world IP organization uh you know a a a leadership vacuum creates opportunities for anti-ip voices uh you know such as such as China uh in that regard iip welcomes the nomination of of uh Joseph Baron uh as a deputy USR to lead those efforts uh the United States uh uh at the WTO one one
▶ 1:04:42uh uh uh issue that um should be taken up is uh supporting further extension of the WTO e-commerce moratorium uh this is uh uh to prevent customs duties on electronic uh Transmissions uh countries such as India and Indonesia have threatened uh to allow the moratorium to expire and to put uh duties on uh digital copyrighted Works uh which would be a a significant uh
▶ 1:05:13problem for the US creative Industries uh I believe the the administration's recent memo addressed this and called on USR to look at tools to make the e-commerce moratorium permanent the US should take leadership before wipo the world IP organization and ensure that wepo is uh uh maintaining its mission to to promote intellectual property rights uh where sometimes it has veered off course um wipo should be encouraged to dedicate resources to uh
▶ 1:05:43promote the full implementation of the wio internet treaties uh which provide uh fundamental protections for copyrighted works in the digital environment uh and they've been around for 30 years and should be fully implemented by all signatories and bilaterally the US should use all available trade tools to ensure that our trading partners are meeting their commitments on IP this includes enforcement of existing trade agreements on IP robust engagement through the special 301
▶ 1:06:13process um and ensuring countries that are eligible for our trade preference programs meet uh the criteria on intellectual property rights so you know the US U there's a lot uh they can to us can do to take leadership here thank you and just briefly uh moving forward here Ambassador Dow next year Sunset usmca it's a unique provision historically speaking I I think it's a good opportunity as well can you explain
▶ 1:06:43perhaps if you might uh how you plan to proceed from your perspective and what would be uh beneficial for other Industries as well but how do you plan to approach that next year with the the uh sunset with regard to Canada and dairy or just yeah okay yes well Congressman it's a negotiation so we have to reenter the conversation and say look you're not meeting the intent and and the letter of what we negotiated the first time around with regard to tariff rate
▶ 1:07:14quota allocations uh you know you're you're very cleverly piding holing the trq and then you say well nobody used it then you know we can do away with it it's it's very cleverly done but that was not the inent this was the first dispute uh that was taken under usmca and the new disputes process uh we don't agree with how the panel came out on this there was a lot of disagreement I think with how the panel came out on this with regard to USR so this is an open-ended conversation that we have to uh close we also have a situation where
▶ 1:07:44uh we you know Canada has a closed system like our sugar program in terms of dairy up there and so as their butter consumption increases they produce more milk to meet the butter the byproduct is skim milk powder and when we were entering into these negotiations they were selling skim milk powder from Canada cheaper than we can sell it into Mexico cheaper than we could sell it from Arizona into Mexico so clearly something was a little off there and so we discussed with them how to you know dispense of this class 7even and how they had had
▶ 1:08:14adjusted their system well they were very clever and how they did this oh yeah we'll meet that but we now we'll hide it in a new class 4B so they've just you know pardon the pun but they've moved the cheese on us here and uh so we have to have another conversation about you know what what is the right way to do this that meets the letter of what they agreed to right thank you I I think we can uh we can expect a robust exchange uh moving forward in in 2026 on usmca and I recognize for five minutes Mr
▶ 1:08:44Panetta thank you Mr chairman and uh gentlemen lady ma'am excuse me thanks to all of you for uh being here and I appreciate definitely appreciate your testimony more importantly I appreciate the fact that we're actually talking about the t-word not tariffs but actually talking about trade which I think is very very important something I hope we do more um going forward but also not just talk about it actually act on it would be actually pretty refreshing especially here in Congress so look forward to working with you Mr chairman and ranking member on that um
▶ 1:09:15all of your testimony uh has made clear that this is in a time in which it's very important to have mechanisms in place to ensure that companies and countries play by the rules as we saw with the bipartisan usmca comprehensive free trade agreements with strong enforcement mechanisms really are the gold standard when it comes to trade enforcement but that means that aggressive trade enforcement requires aggressive deal making and I'm not talking about Frameworks I'm talking about agreements
▶ 1:09:45furthermore while processes like 301 and 2011 offer tariffs and duties as a response to unfair practices they do little to help American exporters receive fair treatment in foreign markets and although you have a stalemate at the WTO it is the dispute resolution process within free trade agreements that bring governments to the table and eventually change policies at least we hope so now usmca included improved state-to-state resolution procedures as well as the rapid response
▶ 1:10:15mechanism really kind of a firstof its kind labor enforcement mechanism so far the processes in the usmca actually have been used to address a number of Labor practice issues to address Mexico's treatment of corn and to change Canada's Dairy quotas though there is a lot more to be done got it understood uh and I agree with the ranking member that this Administration has got to do more than just talk about tariffs but I also admit that I was disappointed in the last administration's reluctance to negotiate sub
▶ 1:10:46substantive free trade agreements it didn't initiate or even ask Congress for trade promotion Authority instead the Biden Administration launched ipf and the US EU trade Technology Council which didn't include traditional trade provisions and were never even finished I get that these Frameworks laid a foundation but as Mr Le Hood heard me say last week when we traveled together they were like a hamburger without the meat it's actual agreements that provide the meaty protections
▶ 1:11:16for farmers and to open up new markets and we could have done more but going forward let's do more we must do more when it comes to trade and Trade Agreement ments now at the same time I am also disappointed with the tariffs threatened and levied by the current Administration these tariffs absolutely undermine the trade enforcement mechanisms that we've established under usmca especially makes it difficult for negotiators going into usmca review in 2026 how do we expect our partners to trust or use trade enforcement
▶ 1:11:46procedures if the model we set is to ignore those options and to use tariffs kind of a as a shoot now aim later type of process not only are these tariffs damaging to the economy but they also undermine the confidence that trading partners have in the United States and make it more difficult to establish strong procedures to address legitimate concerns going forward the Trump Administration has stated that it is interested in new free trade agreements I really hope that's true but going forward I hope to see
▶ 1:12:17the US trade representative I've only heard good things about by the way I've heard he's a straight shooter um and I hope he continues to work with us us here in the United States Congress uh and but I also hope he's Bolder about working with Congress to leverage our Market power for free trade agreements that bring clear and enforceable standards Mr Rosen bomb if I could hit you with my first question with only a minute left unfortunately um how could more free trade agreements with strong enforcement Provisions improve trade
▶ 1:12:47enforceability especially going into the usmca review in 2026 and how it can strengthen enforcement for Provisions dealing with issues if you could sum that up because I got one more question for Ambassador thanks yeah really quick I trade agreements as you say um are you know the gold standard for putting into place high standard copyright protections and enforcement uh you know with an enforcement mechanism and are really the best uh tool to get countries to uh increase
▶ 1:13:17their protection and enforcement of copyright outstanding 30 seconds Ambassador Dow good to see you back up on Capitol Hill appreciated your work uh and look forward to continuing to work with you if possible um elaborate a little bit more uh in light of the usmca review in 2026 and the future trade agreements how can we structure dispute resolution procedures to be faster acting well that was a big topic of conversation with Ambassador Mahoney in usmca was how how do you have enforcement at the speed of Commerce
▶ 1:13:47and you don't languish on these things for years uh do I think what we did in Canada and Dair was adequate in terms of timeline and process yeah you could argue that uh was the outcome correct no and so there there's that component of it too is the speed is one issue getting it correct is the other issue so there's there's a lot of elements of this what we do appreciate the fact though that we do have I agree with the comment of a gold standard enforcement mechanism now for the very first time
▶ 1:14:17unless and and hopefully we can continue that in other agreements thank you and before I yield back just want to talk about briefly uh getting rid of Jackson vanic for Kazakhstan and and hopefully having a pntr for that country which would be economically trade-wise and strategically beneficial for our all parties involved thank you Mr chairman I yeld back thank you Mr Panet and now recognize Mr Buchanan for five minutes yeah I just want to thank the chairman for doing this today and let me just add on to my friend uh from California
▶ 1:14:48about free trade agreements we've done a little or nothing frankly and I've been to there's 200 countries 180 countries I've been to 80 of them in the world and a lot of them not all of them and some we wouldn't want but are would like to be involved with some kind of a trading relationship which leads to a Le a lot of friendships and security issues and a lot of other things we're not out on the playing field and we haven't been for sometime I was kind of headed up trade for a period of time and been on the trade committee for a long time we need to be more active and great
▶ 1:15:18uh engaged in this so again thank you Mr chairman for holding important hearing on trade enforcement priorities over the last few years weak trade enforcement has empowered countries to take advantage of the United States significantly challenging our small businesses and our Farmers within the State of Florida we have seen firsthand harmful effects of this through Mexico's illegal seasonal dumping of fruits and vegetables within the egg industry
▶ 1:15:48Mexico's agreement of dumping of tomatoes results in an economic loss of about $4 billion a year to Florida's economy along with two2 billion doll loss in sales every year uh and it's also impacted 30,000 jobs in our state uh Ambassador garish let me ask you with you look at4 billion dollar that wasn't the intent of these agreements when we put them together it was to have something
▶ 1:16:18that work for everybody the Free Trade Agreement uh with Mexico and yet I'd say over 20 years even before I got in Congress people have been concerned about what's going on with Mexico we worked uh I thought and good faith but where is the enforcement it just seems like you know you do all the work took time a lot of heavy negotiation you know that better anybody because you worked with Ambassador legh Heiser but what what do we got to do to enforce these agreements
▶ 1:16:49because as far as I'm concerned Agreements are only as good as the people involved but what's your suggestion as it relates that on the enforcement side here you are six years ago and you look at these these numbers just in Florida are huge but probably across across the country and a lot of different Industries as well thank you congressman and I I agree with you Agreements are only as as as good as the people involved and the willingness to use the enforcement mechanisms that are available under the agreements and I think this is this this issue
▶ 1:17:19with with seasonal and perishable Goods is something that's that's been a problem uh and and I think uh under the the new Administration I I would expect that there would be a review of of what can be done under the usmca to address this problem uh I think they will be very willing to use the enforcement mechanism available under the agreement as well as our other agreements uh that we have with various countries around the world the other thing I I I would say is I think we need to
▶ 1:17:50uh have changes to the the anti-dumping and counterveiling Duty laws to address the the problems that exist with The Dumping uh and subsidization of seasonal and perishable goods and the ability to get relief under our laws that this has been a perennial problem there's deficiencies in the law that prevent our Growers from being able to take action under the anti-dumping and counterveiling Duty laws and I think that should be addressed yeah and let me just throw out to you also why
▶ 1:18:20why is it that we're not more aggressively uh in terms of doing agreements talking about people doing agreements I I thought we had a lot of momentum coming off usmca and yet there's been little or nothing on both sides frankly and I really do think it makes a big difference but am I missing something I think I think we can enter into trade agreements which will work for for both countries but particularly for our for our us companies and farmers and ranchers in terms of opening export markets
▶ 1:18:50I think largely those would have to be on a bilateral basis I think those would provide the the the greatest advantages and and prospects for the United States we certainly in the first Trump Administration looked for opportunities to do deals with countries uh we we did a an agreement a trade agreement with Japan uh which it greatly expanded our Market access for agricultural products in fact achieved I think most of what we would have achieved under TPP we also did a digital trade agreement with Japan
▶ 1:19:21uh we were negotiating free trade agreements with the UK let me just mention one of the things I just got a couple of minutes Japan that was great agreement think phase one there's a phase two I don't know where where that's at but the point is uh the other thing is in Europe I look at so many Switzerland that talk to them they'd love to do something the UK the we got a lot of the same values shared values a lot of the same challenges in terms of wages this that or whatever and it just seems like that's a great opportunity to make a big difference as well so I just think
▶ 1:19:51we got to get back into the business we're not in it we're not sincere about being in it and we need to change that thank you you back thank you and I recognize Miss Del Benny from Washington State thank you Mr chairman and thanks to all our Witnesses for your time uh being with us here today um we're here today talking about trade enforcement um but we really should also be talking about Constitution enforcement um president Trump is abusing executive power including by attempting
▶ 1:20:21to impose the largest tax increase in a generation on the American people through tariffs without a vote in Congress he is ignoring Congress and the Ways and Means Committee and it appears my Republican colleagues are just standing by um the American people are depending on Congress to stand up tariffs and trade are hugely impactful to Industries and households in every District across the country trade can bring down prices for families and create local good
▶ 1:20:52paying jobs by opening new markets to sell our Goods overseas but the sweeping broad-based tariffs that President Trump is proposing will hurt our economy by raising the cost of living for the average household by thousands of dollars a year Trump's plan to impose tariffs on Canada Mexico and China with emergency Powers will increase costs for American households by over $1,200 per year and his reciprocal tariff plan will cost households in additional $
▶ 1:21:222700 to $3,400 per year low and middle income earners including farmers will be the hardest hit and that's a fact according to USDA and I know um the chairman talks about this regularly Nebraska's third congressional district which chairman Smith represents has over 60,000 Farmers more than any other District in the country congresswoman fishbox Minnesota district has the second most Farmers with over 50,000 Congressman fenstra Iowa
▶ 1:21:52district has the third most farmers but what is being done to protect farmers are we not concerned about the massive retaliation against our Farmers that a trade War brings it always impacts agriculture um our my colleagues my Republican colleagues in particular going to allow president Trump to raise taxes on the American people without a say that should be the job of this committee the Constitution is very clear about this congress not the president
▶ 1:22:23has the power to impose taxes and tariffs and to regulate foreign Commerce that is one of the basic functions of the Ways and Means Committee and my Republican colleagues used to agree with this back when there was a democrat in the White House in 2023 chairman Jason Smith said that President Biden's trade initiatives sidestep Congress and that the abided administration quote unfortunately has refused to recognize that the constitution requires Congress be at the center
▶ 1:22:53of us trade policy end quote he further stated in order to succeed the administration must recognize that Congress is in the driver's seat in setting priorities and deciding whether to approve any trade agreements yet if the president's 25% tariffs on Canada and Mexico go through the president would be in effect withdrawing the United States from the bipartisan usmca trade agreement that Congress overwhelmingly approved of in a 2022
▶ 1:23:23oped trade subcommittee chairman Adrien Smith said quote a successful trade agenda will require close cooperation with Congress every step of the way this coordination is not optional end quote yet there has been absolutely zero coordination with Congress on trade under the Trump Administration president Trump has already drastically abused the law when he announced tariffs under emergency powers and clearly violated the statute by not as the law requires Consulting with Congress
▶ 1:23:54before exercising any emergency Powers over the past few years I have sent letters with Congressman L Hood denouncing then trade Ambassador TI's digital trade overreach I signed on to a letter led by Congressman Ferguson criticizing treasury for changing taxes on people's health plans without going through Congress and joined my Republican colleagues in calling out President Biden for signing a trade deal with Japan on critical minerals without Congressional approval president Trump's
▶ 1:24:24par tariff proposals dwarf Biden's in terms of the potential economic impacts where is the outrage now last year when President Biden signed a train deal with Taiwan we worked together as a committee to ratify that agreement and when the bill passed chairman Jason Smith stated what's particularly encouraging about this legislation is that it represents a bipartisan effort to reassert congress's constitutional Authority I hope that Republicans still have an interest in
▶ 1:24:54reasserting congress's Authority if so I'd welcome the chance to work together thank you Mr chairman and a yield back thank you now recognize Mr hood for five minutes thank you Mr chairman and I want to thank our Witnesses for your valuable testimony today Ambassador Dow and Ambassador garish welcome back thanks for your prior service and thanks for this um really uh impactful conversation today on on trade I want to um
▶ 1:25:25address my comments regarding digital trade I'm the current co-chair of the digital trade caucus and I I've become alarmed by the growing spread of restrictive and oftentimes discriminatory digital regulatory Frameworks and laws which have a direct negative impact on us competitiveness and Mr male in your opening you you addressed a number of these issues um during President Trump's first term in office the United States made great strides in establishing ourselves as a driving force on digital trade shaping
▶ 1:25:56market conditions and ensuring Equitable competition We Now understand that digital trade is no longer a niche segment of our economy it is a fundamental pillar of economic strength and Global influence and I would point to um the digital trade chapters of usmca and what we're able to put in there really the gold standard in terms of uh um requirements and standards and uh regulations put in place that help uh for for the future as it relates
▶ 1:26:26to digital trade our our leadership in setting fair and effective rules for digital trade um went the wrong direction in my view over the last four years under the Biden Administration when it came to enforcement we allowed the Communist Chinese party to expand its global economic presence and promote digital trade policies that starkly contrast to our American values we're all familiar with the digital Silk Road and other initiatives they put in Forth put put in place uh in this space
▶ 1:26:56moreover we've allowed and sometimes even encouraged the implementation of Digital Services taxes or dsts and other taxes or regulatory Frameworks that unfairly targeted us businesses I commend president Trump for signing an executive order recently to directly address the Imp imposition of dsts and defend us businesses and workers that is just the beginning however and we and Congress need to find ways to better support our digital trade sector and defend against many of the
▶ 1:27:26increasing threats being made to stifle US economic growth Mr male um again appreciated your comments in your opening statement um as we look at how do we focus on winning the strategic competition against the CCP which has to be a priority I serve on our select committee on China which is bipartisan group focused on how we win this competition I think you do that in the economic space but as I mentioned I've become concerned over the last four years the United States has seeded the playing field
▶ 1:27:57to other nations especially China by stepping back on digital trade leadership could you speak to how increased uh internet fragmentation including localization uh localized data May benefit Chinese companies such as WWE and how should this impact us trade priorities yes uh thank you the uh key some of the key elements of our digital trade agenda were actually motivated by looking at what were the barriers that China imposed in its
▶ 1:28:27Market that did prevent us companies from effectively competing there um and so whether it's a data flow rule whether it's a data localization rule whether it's access to source code whether it's discrimination on digital products those were prevalent measures uh uh seen in the Chinese market that really hurt us firms and so the primary motivation was to make sure that is not replicated in other markets uh maybe we're not going to make a a go of it in the Chinese market but we want to make
▶ 1:28:57sure that the Chinese model does not get exported into other regions I think our trade Partners who want the US companies in their markets and want to engage with them understood that and embrace many of these key uh uh key Provisions so if you look at a TPP which the US ended up not joining but those governments actually uh integrated those into their own um provisions and so it wasn't just about us
▶ 1:29:27uh tech companies or uh us interest it was really about them seeing it valid for themselves as well so these are useful uh rules and they they certainly do serve as a bulk bulwark against some of the Chinese efforts to restrict the data to force localization and access uh intellectual property for example a source code thank you I have another question for you related to the EU but but uh I'm limited on time here I'll submit that for the record M Mr male thank
▶ 1:29:59you thank you and now recognize Mr berer for five minutes Mr chairman thank you very much and thanks all of you for being with us today you know it's unusual that my Republican colleagues who traditionally are prot trade Advocates particularly those from agricultural states are so eager to support the right ranging tariffs that president trp has proposed on our closest trading partners I'm sure they know well that farmers and Ranchers and as well as other us exporters will suffer the most as their goods become subject
▶ 1:30:29to foreign retaliatory tariffs one justification I hear from them is that the tariffs um in support the tariffs will partially offset the cost of the budget busting tax cut that we're about to Grapple with tax cuts for the wealthy and the massive corporations I but already cost them that if you use tariffs as a pay for they can be rescinded by executive Fiat with no ability for Congress to intervene so the president on a whim can withdraw his tariffs as easily as he imposes
▶ 1:30:59them without any push back from Congress and that makes our crippling deficits even worse another contradictory justification I hear for the Trump's trough trade policy is it'll create leverage that we can use to bend foreign trading partners to our will but if the president wants to raise revenue with tariffs wouldn't this create an incentive for him not to give in to his deal making impulse PES and keep the most destructive tariffs in place you know Ambassador D isn't it true that
▶ 1:31:29American agriculture exporters are the very first to be subject to tariffs on their goods yeah we've seen some of that in the past um but uh Congressman I I think there was a pretty good book written by our previous boss about some of these issues and that last chapter I think is instructive in terms of how other countries try to game Us in terms of their currency and their regulatory policy and their fiscal policy so there are a lot of challenges that we face
▶ 1:32:00in our trade relationship with other countries and and and quite and honestly the the challenge we have in agriculture is uh everybody in the world's protectionist everybody tries to protect their own farmers and and uh that that puts us often times at the front line let let me move on Ambassador Miss P do you have any concerns with using tariffs as a major long-term source of Revenue and why do other large economies not rely on tariffs as a revenue Source
▶ 1:32:30uh thank you for the question generally tariffs they're a tool they're a trade enforcement tool they're a tool in our statutes with particular goals and aims um to change Behavior often in other countries to enforce disputes to enforce trade remedies but they have a specific objective um and and that isn't to raise revenue it is to achieve these objectives to open markets for for our companies and to protect our Industries here at home who are subject to unfair uh practices and it's just
▶ 1:33:00not the function in those authorities to raise revenue that's that's not the purpose or the legal justification okay thank you very much Mr mcale you've had this long career in in USR different presidents different parties Senator Holly's indicated that he will soon introduce a resolution to withdraw the us from the WTO I think this would be terrible mistake I think many of my colleagues agree and it's weird because our objection has always been that the Appellate body was was what was
▶ 1:33:31wrong and it hasn't been functional for years that can't be the reason to pull out of the WTO now do you think it's still to our advantage to engage with the WTO what do you think about Senator Holly's efforts uh I do believe that the WTO does have an important role in a a unique Forum to pull together so many uh nations in one in one place and to be able to address crosscutting issues um many of the rules uh that the that
▶ 1:34:02adopt uh under the WTO these are binding trade commitments and one can use those rules as a way of ensuring that there is Market access in various uh uh countries even if the dispute settlement system doesn't work there certainly is a value in having a binding commitment which you can have a conversation with a a government about why a certain problem hasn't been been addressed that they committed to thank you Miss pce we're seeing large layoffs in agency after agency after agency
▶ 1:34:32um how when this hits the ITA and CBP and the USR with chaotic and indre at layoffs how are we ever going to enforce our trade policy I think there's a real question whether we will be able to um as I mentioned in my opening statement these agencies are already overwhelmed because we're seeing greater unfair practices from China as we've talked about today we're bringing more trade Enforcement cases the agencies are behind in the statutory deadlines they're allocating their resources as best
▶ 1:35:02as they can working really hard um but underwater um today at our Baseline and so if there's further reductions um in those agencies at CBP which is keeping out fentanyl it's in it's finding evasion of our duties um it's you know addressing health and safety laws it's it's a real concern and a real danger for our Industries and our consumers thank you and I yield back Mr chair thank you I now recognize Dr Murphy
▶ 1:35:33followed by Miss suul and after Miss suul we will then proceed to two to one based on the the numbers present thank you thank you Mr chairman I appreciate the time and and thank you guys I I think this is more timely than ever obviously or I would think that 99% of people who are in this country who are just going to work getting their kids in school etc etc have no clue about trade no clue about how we have been abused the US in Trade Practices across this country and the fact that we have a president now that actually
▶ 1:36:03is going to do something about trade um I think is great tariffs um are in the Constitution there by by the way I just want to remind my Democratic colleagues that uh President Biden who was the guy in the white house um that he extended some of the Chinese tariffs that were begun in the Trump uh era and they are not in the budget bill as a as a revenue raising mechanism so it's not it's not being truthful that there were using them for for revenues I also want to thank
▶ 1:36:34um our committee chairman uh chairman Smith for bringing up the issue of Dom Minimus I think it's critical um they China primarily which is seemingly all what we're trying to do with trade-wise um is U is abusing that privilege and I'm glad to see that attention is being brought to this I want to bring a little bit of tension to a different issue and that's trans shipment um unfortunately trans shipment and other means of Customs fraud have grown in this country the relief from unfair Trade Practices promised
▶ 1:37:04to domestic manufacturers by us anti-dumping and countervailing Duty orders is being undermined by trans shipment and other means of fraud that seek to evade them we need to find creative ways to stop trans shipment so we can assure that uh president Trump's attention to trade um is uh is not being undermined I want to example one highlight um from my state it's actually over in the other part of the state um in Charlotte pip and Foundry which has successfully challenged the unfair trade practice
▶ 1:37:34of Chinese producers resulting in the imposition of significant anti-dumping and countervailing uh Duty remedies um it's sad that they had to do that um but they've had to uh take this to court after the imposition of those remedial dut duties the foreign producers then have taken under undertaken a scheme of shell company exporters and importers from around the region um to obate the origin of their products and evade the ad um cvd duties Charlotte Pipe is now on
▶ 1:38:04its 14th enforce and protection act uh petition um how much money that each of these companies have to spend in trying to fight the reach and the threat to domestic industry remains our inability to enforce law lawfully enforce imposing anti-dumping and counterveiling duties is undermining the utility of us
▶ 1:38:35trade laws to domestic producers so Mr chairman I'd like to enter into the record a letter from the American Business businesses urging contract urging contess to enact improvements to the nation's trade and custom laws Uh custom enforcement laws so be it he said I heard him one of the pieces of legislation in endorsed in the uh in the letters hr12 84 the fighting trades cheats act which I original co-sponsor of this this legislation would increase penalties
▶ 1:39:05for custom fraud while supplementing Customs to Resource pursuit to pursue acts of AD CVT order evasion just uh couple questions here Mr uh Ambassador Gish can you discuss how we can address the issue of trans shipment so we can ensure that our domestic Industries is being are being adequately protected from unfair Trade Practices thank you congressman and the the the problem with trans shipment is a major problem and something we absolutely need to address and
▶ 1:39:35uh your you're fighting trade cheats Act is something that would be an important addition to the you know to our toolbox that we could use to to address the problem with trans shipment uh there are other important changes that I think we need to make some of those are included in the leveling the playing field act 2.0 legisl that has just been reintroduced as well uh which would enhance the ability to address evasion of anti-dumping and counterveiling duties including trans shipment there's also problems with misclassification of products
▶ 1:40:05to evade the duties uh and even instances of undervaluing products to try to lower companies uh Duty liability so these are all significant problems leveling the playing field act 2.0 would would address these as well I it would apply the uh enforc and protect act to um uh Safeguard duties it would also require certifications of products coming in that they're not subject to anti-dumping or counterveiling duties
▶ 1:40:36so could get at this problem as well it it uh enhances the circumvention provisions that are available to the Department of Commerce but there's also other improvements we can make to the enforce and protect act uh one of them is to make it available all TR enforement if you can wrap up that oh sure absolutely uh another is to to to impose certain requirements on companies that try to appeal those decisions uh and also allowing Customs to uh on
▶ 1:41:06its own initiate uh these these proceedings under EPA so there there are changes we should make and we and it's an absolutely important problem that we need to address yeah so miss p i I heard you say there was no in no ability to enforce our trade laws that's and and that's a sad fact unless we do it through the and who's going to recognize those but that's why we're having to do the tariffs that we're having to do sadly enough and um I don't believe they should be used as a revenue generating mechanism but the time has come for American industry to actually reach back and not have the
▶ 1:41:36abuses that other countries Place upon it thank you Mr chairman all you back gentleman y's back and now recognize Miss Su uh thank you Mr chairman I want to thank our Witnesses for being here today um the discussion about trade enforcement I think is very timely and is bipartisan um I welcome the conversation that we're currently having unfortunately like most of uh this administration's actions thus far the president is overreaching his authority and the law to implement blanket untargeted uh tariffs this is not what Congress intended
▶ 1:42:06with authorities granted in the international emergency uh economic Powers Act I think the president's actions are causing more chaos than and confusion than they are being helpful and they're jeopardizing very important trade relationships with our I allies and uh trusted trading partners make no mistake uh these indiscriminate tariffs will pass cost on to the American consumers uh taxing our constituents on Goods uh across the board instead I
▶ 1:42:36believe that we need to advance a common sense worker Focus trade agenda that combat that combats China's anti-free uh Market practices and ensures that our Workforce including our still workers can compete on a leveling a level plan playing field that's why I was proud to reintroduce the leveling the playing field act 2.0 with my colleague representative vany yesterday this bipartisan bill will modernize our anti-dumping and countervailing
▶ 1:43:07Duty enforcement laws to push back against China's belt and Road initiative combat China's uh circumvention of us laws and Target repeat offenders two weeks ago I also uh joined with my colleagues uh Dr Murphy as well as representative uh Mike uh boss to uh introduce the bipartisan fighting trade cheats act uh which we've discussed uh briefly uh in uh his comments uh Dr Murphy's comments um a minute ago
▶ 1:43:38which will increase the Civil penalties for filant and grossly negligent violations of our us trade laws I believe that both of these that leveling the playing field as well as the fighting trade cheats acts are common sense Concrete Solutions to protect American workers and to get tough on China's anti-market practices moreover there are tools that are proven to work and they won't hurt American consumers um Miss PES I wanted to ask you can you expand upon how Industries
▶ 1:44:08like still workers uh um have been impacted by some of the current loopholes in our anti- uh dumping and countervailing duties laws and do you think that the provisions of the leveling the playing field 2.0 act would help workers in my district and across the United States um uh in this regard absolutely and thank you representative Su for your leadership in this area um this really gets at one of the emerging and greatest challenges in battling overcapacity in many
▶ 1:44:38sectors but particularly in steel driven by China so we know that China it's not market-based it is uh a a command control economy that is looking to dominate in steel and as it is in other um and so our companies uh they invest in these cases which are very expensive takes months to um move forward through the Department of Commerce the International Trade Commission um in order to get those remedies in place to show that they're being injured um by
▶ 1:45:09subsidies by dumping from these companies from Chinese practices um and get those orders in place those duties high as 200% or more which is the level of the unfair practice that they're facing and what is China do well it's very adapt now getting around these orders more and more on a faster and faster basis so it's moving production to third countries um often in Asia but in other locations as well it's cross- subsidizing so it's it's starting out in a third country where we don't have the orders in place
▶ 1:45:39then our companies have to start back at zero and our workers are impacted in the meantime it's it's not as if the the injury stops uh uh as they bring these cases it's ongoing yeah and so leveling the playing field 2.0 it's getting at these very urgent issues and really promises to to really help solve these problems and give us extra tools on our toolbox uh Ambassador garish you also talked about the leveling the playing field 2.0 as well as um most recently uh discussion about the fighting the cheats act as well
▶ 1:46:09can you talk about why these are truly Common Sense bipartisan solutions that we should prioritize as a committee but definitely this work with this Administration and trying to implement thank you and again congresswoman Su thank you for your leadership on on on this legislation on leveling the playing field act and and uh on the fighting trade cheats act uh and I agree with with my colleague Miss p on this these are very much Common Sense uh actions to address the problems that we face and you know I
▶ 1:46:39I think what Miss P was describing was situations where we get trade remedies our companies our workers get trade remedies against uh China for instance and what happens after that they move their operations to a third country and so uh these Provisions would allow us to uh expedite successive investigations address crossb subsidies uh and and the and the distorted costs that often result as well because these companies in third countries are often sourcing their inputs from
▶ 1:47:09China or Chinese overcapacity is causing the entire cost structure to be distorted so it it allows Commerce to uh to go after particular Market situations in a way that it was origin intended by the the the original legislation here and also ad adjust costs in in other instances as well so it it really enhances the remedies that are available to our companies and our workers in a very common sense way thank you so much uh Mr Ambassador and Mr chairman I look
▶ 1:47:39forward to working with you hopefully we can have an opportunity to do a markup where we actually do prioritize uh these enforcement tools I look forward to working in a bipartisan manner thank you thank you and I recognize Mr stubie for five minutes thank you Mr chairman us trade policy must reflect not only economic interests but our national security and ideological interests I fully support president Trump standing up for this country through his trade policy it's about time that we had a leader in the White House standing up for our interests in putting America First our allies must stand with us it's not extremist to
▶ 1:48:10suggest that trade deals be fair mutually beneficial and accomplish measurable goals if our friends to the north south and across the Atlantic and elsewhere choose to rip us off and compromise our own National Security then there are serious actions and consequence qu es that need to happen last week I introduced legislation to stop the importation of citrus from China entering the United States The Dumping from China is appalling has had negatively impacted our domestic industry Ambassador jerish uh what role do trade remedies like anti-dumping and countervailing duties play in
▶ 1:48:40protecting us industries from unfair foreign competition and are there any gaps in how these tools are currently applied thank you congressman and and they serve an essential role in helping our companies and our workers to address unfair Trade Practices they address instances where companies including from China are engaged in dumping in the United States where they're unfairly pricing their products here many times below the costs of of producing the products and where those companies are unfairly subsidized
▶ 1:49:10by their foreign governments and really uh provide a Level Playing Field for our producers and and and workers here in the United States and there are unfortunately there are some there are limitations right now that need to be addressed and and uh some of those many of those limitations are addressed in the leveling the playing field act uh legislation that we've been talking about where we need to address this problem where where companies are are moving to a third market and and continuing to receive subsidies from their home government in many
▶ 1:49:40instances it's China or uh they you know they they There's real burdens to Bringing Su successive investigations to address every time a company moves to uh to a third country and and then there's more unfair trade that that results from that we need to to address circumvention and evasion of the duties uh leveling the playing field act does address circumvention it puts very strict timelines on the proceedings it also address evasion requiring certification
▶ 1:50:11from importers to address the issue as well as extending the enforce and protect act to safeguard investigations it requires minimum asset uh commitments by uh non-resident importers to address the problems we Face we also need reform of the enforc and protect act uh there are limitations to that uh to the to the current system that we have I've talked about some of them already where we need to make companies that want to appeal the decisions by by Customs pay the duties
▶ 1:50:41before they can appeal we need to give Co Customs the ability to self-initiate investigation so the burden is not just on us companies to try to identify every single importer that is involved in these proceedings very often that information is not available to us companies or they hide it through the use of shell companies so that's a significant problem so we need to continue to enhance the remedies that are available to us and and what are countries like China doing to get around our trade balls they engage
▶ 1:51:11in a variety of very sophisticated practices they're constantly engaging in in uh practices like trans shipping through third countries where they they falsely change the country of origin to avoid the payment of tariffs and anti-dumping and counterveiling duties uh they will misclassify the products to bring them outside of the coverage of the relief that's been imposed they will undervalue the products to pay less in duties uh they very often
▶ 1:51:41will set up operations in a third country to just completely try to avoid the payment of Duties so there's I think we really need to take like uh the leveling the playing field act would provide for but also directing just directing our tariff actions at companies that are owned and controlled by Chinese companies even in third countries there was just an article in the Wall Street Journal today about the fact that Chinese companies are already moving their operations to third countries to try to avoid the the tariffs that
▶ 1:52:11have just recently been imposed and and likely future tariffs uh thank you and in the limited time I have Ambassador D I'm concerned that the EU gains intellectual property rules to gain an unfaired edge over American dairy products by using geographical indications to protect the names of generic dairy products do you think this is an issue the United States should prioritize in its trade agenda absolutely and in fact uh congresswoman fishball has sponsored the again the save act
▶ 1:52:41uh you know we've done side letters with usmca on on common names we got a similar deal with Chile uh this this is something that we need to pursue with all of our trading partners thank you my time's expired thank you I now recognize Miss fishbach for five minutes thank you Mr chair and uh and in Minnesota uh and my district borders Canada heavy a district um we really do know how important those relationships with our Canadian neighbors are for business and for
▶ 1:53:11Farms um however I do think that um our trade should at least be fair for our American Producers and and you can probably guess I heard a lot about the dairy issue in usmca in my district um many of my Farmers supported usmca because they uh really thought that we needed to update those agricultural trade issues and um and it's important that we increase um the dairy market and the access to Canada um and like you mentioned Ambassador Dow
▶ 1:53:42it is critically important that um that American Dairy Producers have a fair opportunity to compete with in particular here in neighboring Canada um and I am disappointed that uh Canada continues to keep us producers from playing on a um playing on a level field when it comes to filling the usmca Dair Dairy tariff rate quotas I have to slow down so I get all my words in um but and and Ambassador D I'm going to throw out a few questions um really quickly and I'd just like you to speak
▶ 1:54:12to some of that um can you speak to the importance of access to foreign markets for us Agriculture and how do exports relate to commodity prices and then um how can stepped up trade enforcement ensure new and continued access to export markets and I'm just going to throw that about three and a half minutes and you're going to cover all of that perfectly in that time well you know in der 4 44% of our Dairy goes to Canada and Mexico so obviously usmca is
▶ 1:54:42a critical thing um with the ca Dr on January 1 our tariff finally after all these years went to zero for dairy and I think to look at C to Dr and say well was that a success well over these years we've taken our Dairy trade from 40 million to 440 million so obviously these free trade agreements are a big deal um we uh when we started with Mexico it was 181 million in 1994 today is two and a half billion so obviously number one trade deals are very
▶ 1:55:12important number two next thing I would say is trade enforcement is critically important you know the very first trade enforcement uh in the WT was beef hormones with the EU and and going back to the EU you mentioned them very interesting situation where rather than fixed the problem they agreed to pay compensation they've never fixed the problem they have no interest in fixing the problem they're protectionists this is how they do business and this is an incredibly
▶ 1:55:42difficult thing for us Farmers to have to deal with we're very competitive in the world in fact that's part of the challenge is we scare other countries and their Farmers about this but I actually last summer had a very interesting conversation with a Chinese Ambassador about this and I said our goal is to make the P bigger expand consumption of food around the world and hopes that we increase US exports and US trade of that consumption so we're trying to increase trade increase uh the diets of consumers around the world increase protein
▶ 1:56:12and that's our advantage in the US is on the protein side and and just maybe just comment on on the effect on prices on commodity prices cuz that obviously that's a huge issue to everybody well uh I believe it was Senator Dole that once said you get in agriculture you have to sell it or smell it and uh that that's the way we look at it in agriculture 18% of our Dairy is exported on the pork side I think is 25% beef is you know 15 to 20% wheat is half so it means
▶ 1:56:43everything that we do we grow in abundance in this country we're completely dependent on our ability to sell it to other customers around the world well and I appreciate appreciate that and with that Mr chair I will yield back thank you thank you I now recognize Mr Snider for five minutes uh thank you chairman Smith and and ranking member Sanchez for holding this hearing I want to thank our Witnesses uh for for being here I just want to read a headline from this morning that was uh New York Times came across my phone
▶ 1:57:13Americans are expecting higher prices that could unnerve the FED more Americans are starting to brace for higher prices as president Trump's policies begin to take effect I'm going to expand on that in a minute now I do share many of the frustrations that some of my colleagues have articulated uh most clearly uh representative Panetta where the last Administration fell short in pursuing strategic trade agreements to benefit American exporters and American workers like representative Del Benny I joined with colleagues
▶ 1:57:43on both sides of the aisle when the last Administration sought to take actions without direction or input from Congress so I also share the great disappointment articulated today with the Republican majority in the house that seems quite content to agregate our constitutional responsibilities to give them up to the branch now the subject of this hearing today is about priorities and at core I think the trade priorities that we should
▶ 1:58:13be focusing on are fairly simple to State improving the lives of our citizens economic growth which includes raising wages and helping Working Families Achieve Financial Security and Building Wealth lowering the cost of living and bringing inflation down greater access to global markets for American exporters manufacturers and Farmers creating more high paying American jobs and a stable supply chain giving greater confidence to
▶ 1:58:44American manufacturers and American consumers unfortunately this is not what the actions of the Trump Administration are doing thus far in fact I don't think they've done anything to lower prices voters made clear last November that lowering prices was their number one priority but the pars tariffs being swung about like a giant battle ax against our most important trade Partners will have the exact opposite effect we saw the effect eight years ago when retaliatory tariffs
▶ 1:59:14against you the United States resulted in having to bail out our Farmers with the bombastic threats and actions emanating from the White House we're going to see the cost of chaos again raising prices for americanmade Autos that depend on North American Supply chains higher costs for home builders who are reliant on lumber from Canada higher food prices at the grocery store for fresh produce that consumers have come to expect to be available year round
▶ 1:59:44the president's recent trade announcements have caused costly uncertainty for small and medium-sized companies here in the United States who depend on access to global markets to sell their products and grow their businesses these businesses need certainty to thrive and that comes in the form of policy stability a clear regulatory framework and an equitable Equitable and transparent system to resolve trade disputes the president's trade agenda has pointlessly rattled our trading system
▶ 2:00:14demonstrating that his priorities are not focused on helping American workers and businesses now I appreciate Ambassador Dow your remarks on agriculture and dairy in particular last week I sat down with a round table conversation with farmers in my district and I was surprised to discover that in Lake County Illinois the biggest part of my district there's only one Dairy producer left operating the conversation started out with one of the attendees noting that us farmers are the most productive in the world
▶ 2:00:44and grow far more food than is necessary to feed our population but here's the thing farming is a low margin Enterprise and if American Growers are excluded from export markets many of their products as you said Ambassador dowed it sell it or smell it many of their products will be left either on the vine or in the fields and many of these Farms will either shut down or require once again another bailout and of course it's not just our Dairy Farmers that are facing
▶ 2:01:15challenges again failing to focus on lowering costs and enhancing American exporter's access to markets means more acon economic pain for American workers and communities the United St States is strongest when we work with our partners and allies and I agree with my colleagues today that we should prioritize trade enforcement and opportunities to open new markets for farmers and small businesses sell American Products around the world and invest in trading systems that support both workers and businesses that said at this moment I fail to
▶ 2:01:45see how upending Decades of trade policy and going back on our word with our closest trading partners meets the moment in instead of looking for ways to lower costs and using tariffs strategically president Trump has altered the application of nearly every trade agreement the United States is a part of and his actions threat our country's position as a global leader putting tariff on our allies and retaliating against one of our most trusted trading partners through the usage of reciprocal tariffs will increase the cost of doing business with the United States the president's actions will raise
▶ 2:02:15prices for nearly every industry across Supply chains and failed to lower cost for American workers and Families and will not invest in our communities without a yield back gentleman yields now recognize Miss vany for five minutes thank you very much Mr chairman and thank you to our Witnesses for joining us today fair trade is the foundation of a strong American economy but for too long our businesses and our workers have been forced to compete on an uneven playing field foreign competitors particularly China continue to exploit our trade laws
▶ 2:02:45and cheat the system by flooding our markets with subsidized Goods stealing intellectual property and undercutting American American Industries it's time that we confront these actions head on and reverse the trend that we see caving to our adversaries and I'm grateful for the return of American first policies and I was glad to see that USR and the department of Congress will be the Department of Commerce will be conducting a comprehensive review of all us trade agreements our tariffs and economic policies to strengthen domestic Industries and enhance National
▶ 2:03:16Security as has already been mentioned today in response to concerns repeatedly expressed by our constituents representative Su and I along with 29 of our colleagues in the house reintroduced the leveling the playing field 2.0 act to equip companies and the Department of Commerce with the tools that they need to take on these Bad actors Mr chairman I ask for unanimous support to enter into record a letter of support from a variety of stakeholders whose Industries would benefit from the bill without objection thank you our
▶ 2:03:46bill updates trade remedy law and creates new laws to combat repeat offenders to expedite investigations and apply meaningful consequences including going after Chinese subsidized manufacturing through the belt and Road initiative uh Mr Gish uh as you outlined so many of our global trading partners engage in Trade Practices and policies that harm American companies and workers I'm also concerned about the impact of transnational subsidies and Chinese overcapacity in Third Country markets it's clear these UNF Fair Trade
▶ 2:04:16Practices make it a lot harder for American workers to compete you mentioned support of our leveling the the playing field 2.0 act can you expand on the importance of tackling crossborder subsidies and circumvention thank you congresswoman and thank you for your leadership on the leveling the playing field act 2.0 it is an absolutely crucial piece of legislation and IT addresses many of the issues that our companies are experiencing and and the problems that they face in trying to get adequate relief uh you mentioned the crossb
▶ 2:04:46subsidy provision this is often a problem that we have where we we get trade relief our companies and the workers get trade relief uh and and then Chinese companies relocate to a to a third country yet they continue to receive subsidies from their their you know their original Home Market uh and and that benefits their production and gives them an unfair advantage and for too long the United States has not addressed that issue the Europeans do address crossb subsidies we should not be doing
▶ 2:05:16any less we should be addressing this this massive problem the the the legislation also addresses this issue this whack-a-mole issue where we have to bring successive investigations where companies bounce around and move their operations it expedites the pro proceedings and and and allows the International Trade Commission to consider uh you know the prior record from the prior investigation which is critically important because otherwise our companies are spending too much money too much resources to try to get trade relief against all the different
▶ 2:05:47uh sources of unfair trade uh IT addresses the distortions that are resulting from this in costs as well and addresses circumvention and evasion it's it's a critical piece of legislation thank you thank you very much and while trade with China has been a concern for president Trump and for members of this committee trade with Mexico has also been of under great scrutiny as well miss pish I'm deeply concerned about Mexico's commitment to upholding the rules of the usmca framework when we met with a former president we he told us that
▶ 2:06:17the US misunderstood the usmca as basically an excuse for being able to not uphold uh the letter of that Doctrine and so I'd like to hear your opinion is what is happening with the ex appropriation of Vulcan Materials property compliant with usmca rules thank you for the question um uh the circumstances of Vulcan and other uh issues trade irritance with we have with Mexico um sometimes they're complicated
▶ 2:06:47under the agreements I can't speak directly to whether uh those uh activities are inconsistent with the agreement what I would say is that the United States has a whole host of tools oh you're you're familiar with what happened though yes you had armed guards who came in in the middle of the night busted through their fences and took over their property and are basically now kicking them off after they'd spent hundreds of millions of dollars on on creating you know their their port that's correct the investment uh rules in usmca have of course been uh were were uh renegotiated
▶ 2:07:17from NAFTA and actually reduced in the uh in the process of those negotiations so but surely you're not suggesting that our usmca agreement would have allowed this to happen to an American company I can't speak directly to that um at this time but there's again there's a whole host of tools under the agreement including the review that's coming up where we can address anything that is not squarely covered under the agreement all right thank you very much and I yield back
▶ 2:07:48the chair recognized recognizes representative Miller thank you chairman and ranking member Sanchez and thank you all for being here today over the last four years we've watched the Biden Administration sit idly by as foreign Nations launched a fullscale attack on American companies I'm thankful that these days are over and we now have a president who will advocate for American businesses and engage with our allies and spur domestic manufacturing
▶ 2:08:18last Congress I introduced the protecting American Advanced manufacturing act to eliminate the access to American tax dollars that Chinese linked manufacturers currently enjoy in the 45x manufacturing tax 45x is the very credit meant to level the playing field for domestic manufacturing and yet the Chinese companies continue to take American tax dollars and we urgently need to address this another
▶ 2:08:49concern more directly related to this hearing is the very same Chinese link manufacturers who are circumventing tariffs and putting us manufacturers at risk the manufacturers in my district that produce aluminum titanium and steel have been victim to these tactics as China ships considerable amounts of Steel and aluminum through Mexico for before entering the United States effectively avoiding the tariffs imposed on these products I am
▶ 2:09:19concerned that the plants that are in my district and around the country are being harmed as Bad actors enter the US by circumventing their products through other countries circumvention decreases the revenue we collect through tariffs and puts American jobs at risk in our Market as it is flooded unfairly and subsidized and with priced products Ambassador Gish how can the US strengthen cooperation with allies and trading partners in order
▶ 2:09:49to prevent Bad actors from using third countries to evade duties while we ensure compliance with our International Commissioners thank you congresswoman and and I think there are uh several actions that we could take to get better cooperation uh from our trading partners uh you know one is to establish uh Customs cooperation agreements uh with with our counterparts for Customs and Border Protection in other countries to get them to crack down on trans
▶ 2:10:19shipment uh you're absolutely right the with trans shipment and and evasion and and other efforts to get around the the duties is a is a significant problem uh but we could we can have our customs authorities work with their Customs authorities and and try to get better cooperation and cracking down in these efforts we made efforts to do that in the first Trump Administration with Vietnam uh unfortunately the problems with Vietnam have continued to a massive degree and and they continue to be a problem now the other thing we can do
▶ 2:10:49and this is of course more of a but we can uh potentially apply uh do investigations under Section 301 to investigate the uh the lack of action being taken by Customs authorities where it's they they you know not only turn a blind ey but maybe even facilitate the kinds of evasion and trans shipment and circumvention practices that occur and and I think that should be something that another another tool that should be applied
▶ 2:11:19to try to address this problem thank you and I'd like to now shift to digital trade trade Partnerships are a two-way street and I have serious concerns that some of our partners aren't holding up their end of the bargain last Congress I introduced the US Republic of Korea digital trade Enforcement Act that protects American digital companies if Korea passes a law that harms digital businesses it's my understanding that the Republic of Korea is still pursuing this legislation albe it under the guise of a so-called expost
▶ 2:11:50framework work that covertly still targets specific us companies Mr male do you believe both the online platform Monopoly regulation Act and the Korean fair trade commissioner expost approach amount to discrimination against us companies and do you believe that the Trump Administration should seek trade and other enforcement remedies to ensure this type of Korean discrimination against the US company no longer occurs
▶ 2:12:21thank you yes the short answer is is is yes if you look at uh the service definitions and the thresholds that the uh Korea fair trade commission's uh proposal uh institutes both are clearly aimed at targeting us firms even though some Korean companies may be swept in the key question is does it put the US firms at a competitive disadvantage when competing in the market what we've seen is that uh Chinese companies are are rapidly
▶ 2:12:52coming into the market they re I think they the revenues are now up to $2 billion a year they would not fall within the thresholds or service definitions uh from from what I understand so us companies are competing against both Korean companies and Chinese companies in the market based on specific definitions they're uh subject through this uh proposed law to findes uh prohibited conduct and injunctive uh action that are not applicable to their competitors
▶ 2:13:22for me that looks like discrimination thank you I yield back I've run out of time gentoman yields is a gentleman from Texas ready you are recognized for five minutes thank you so much and thanks to uh our Witnesses for their testimony but Madam chairman I just don't believe that uh this committee can continue to operate with business as usual while the government all around us is enveloping with chaos with destruction
▶ 2:13:53and illegality our International Trade trade agreements are being shredded by Donald Trump the greater paser too weak in his ability to stand up to Vladimir Putin American farmers are suffering while so many that they would normally feed go hungry from Trump's illegal shutdown and Trump's grocery tax delayed for a few short weeks will now be hitting American consumers this weekend this hearing attempts to to deny what our eyes can
▶ 2:14:23clearly see the emperor has no close the trade policy of our self-proclaim King Donald Trump is no policy at all it's only threats reversals and lies Trump is driven by his top priority which is new tax breaks for billionaires passing the buck to defending our country to Working Families requiring families to pay far more in the form of higher prices on their goods uh whether it's groceries or something else last week on Fox
▶ 2:14:53Trump's Commerce Secretary confirmed this Reality by stating Trump's plan was to abolish the IRS and replace it with tariffs tariffs that today provide about 2% of the revenues of the federal government never mind that this plan in the words of the very conservative tax Foundation is a quote mathematical impossibility our overall level of trade is too small and the grocery tax Working Families would be required to pay is far far far too high for this scheme to ever work
▶ 2:15:24nevertheless our self-proclaimed very stable genius president is pushing forward by firing 6,500 IRS workers responsible for tax enforcement and today the Congress is about to vote on Trump's one beautiful Bill his solution to the phony Republican concern about our soaring national debt the king of debt in fact will approve adding about $4 trillion do to the national debt with this bill those who will be harmed by the chaotic desire to
▶ 2:15:54slap a tariff on everything and anything are working families looking for a little help with rising cost I uh am reminded uh you you got to put the right chart up sorry yeah well I'm reminded of Trump's comments uh in recent months about what he would do about grocery prices he told us that uh starting on day one we'll end inflation and make America affordable again
▶ 2:16:24he told us as recently as January the 7th we're going to have prices down I think you're going to see some pretty drastic price reductions well if anybody can find those reductions I'd like to know about it what is drastic is the approach that's being taken with this Republican budget and the fact that beginning this weekend my Texas consumers who rely on Mexican produce will pay 25% more as a result of his new Trump tariff tax and for our nation's
▶ 2:16:55Farmers his tariffs promise only more paying the type of pain they got during the first Trump Administration when taxpayers were out billions of dollars for Farm welfare payments when Farmers lost their foreign markets as the president of the Illinois Farm Bureau recently said our Farmers simply cannot afford the uncertainty of a potential trade war and it's the same story for the people in my area that are struggling over High housing prices Trump totally ignored the warning of the National
▶ 2:17:25Association of homeb builders that if tarff would quote ultimately be passed on to home buyers in the form of increased housing prices and would disrupt Supply chains which will delay building and what about American workers while promising US economic pain we have yet to see Trump release any credible plan for bringing good manufacturing jobs back to the United States I've been critical in the past of both Democratic and Republican administrations for not vigorously enforcing
▶ 2:17:55our trade agreements particularly with respect to the environment to prevent a global race to the bottom but the destructive chaos that is Trump's tariff policy driven is as it is by the desire to raise costs for Working Families in order to give billionaires another tax break is no response to the perceived lack of trade enforcement either real or imagined and we must continue to focus on those wrongs instead of the illusion that occurred through much of today's hearing I yield
▶ 2:18:26back gentleman yields uh I now recognize myself for five minutes uh I just want to say thank you to the panel uh particularly uh I am privileged to represent New York's 24th district and Upstate New York a very large and sprawling District all the way from the St Lawrence Seaway to the niagar river down to the Southern Tier and I represent the fifth largest Dairy District in the entire country uh the largest agricultural District in the Northeast and the birthplace of the Industrial Revolution along the yie canal Corridor and uh for decades us
▶ 2:18:56trade policy has allowed other countries to take advantage of American farmers and businesses without repercussion under President Trump's leadership America has finally fought back against these horrendous policies that have hollowed out America's critical Industries inhibited America's Farmers access to global markets I wholly support these efforts and applaud president Trump for his America First Trade policy memorandum issued on the first day of his administration uh requiring a wholesale review of us trade policy and ensuring it supports
▶ 2:19:26us interests and National Security to benefit American workers farmers and businesses and so with this uh Dairy State of Mind I'd like to direct my first question to Ambassador Dow uh you highlighted how Canada has repeatedly failed to comply with its usmca dairy market access commitments which has left many of the dairy uh Dairy tariff rate quotas unfilled every year since its implementation um and while I strongly support the the underlying principles of usmca
▶ 2:19:57for its updated roles you know coming off the the old uh trade Bill uh and especially when it comes to agricultural um the promises of ensuring us Dairy access to Canadian Markets Canada has continued to abuse the system and restrict us access to Canadian markets for dairy and I strongly disagree and I know you do with the dispute settlement panel decisions last November that Canada is actually not inreasing its usmca commitments I shall turn you over to every Dairy Farmer in my district who will tell you they don't they disagree as well
▶ 2:20:28um can you just elaborate real quickly on how the United States should address this issue and ensure that our New York Dairy Producers have the full benefit as the usmca regarding this particularly powdered milk you can talk about whatever the issues are I hear about them every day from our Farmers yes congresswoman thank you yeah there are two issues uh it's in and how Canada administers its tariff rate quotas uh they're very good at uh allocating those to processors which are really in essence competitors rather than
▶ 2:20:58allocating those to food service and retailers where would be willing to actually utilize us product uh then in terms of uh their overproduction or or abundance of skill milk powders that they sell into third country markets uh we address that in in usmca and and and have restrictions on that in terms of their class seven but they've you know is the the term weuse used earlier here in the hearing was move the cheese on us and they've slid this over into a different class uh to try to push more of that product into the US
▶ 2:21:28and elsewhere uh this is the reason that Ambassador lighthiser wanted to have a situation where every so often you renegotiate and you sat down and and had conversations about our trade agreements I think it's a very good thing to do and this gives us an opportunity in this case with Canada to sit down and and uh well what specifically you think the President should do or your the USR and our team should do right now dealing with this this issue it's affecting us every day well I I think you know we have to continue to lean on there was there was a a conver
▶ 2:21:58term used earlier about rattling cages and I think uh U from from my perspective in agriculture all the easy stuff was done a long time ago in trade uh we we rattled cages the first time around the two of us to great effect with regard to uh China and usmca and Japan and uh I'd like to see us do that again uh Canada and in particular with the European Union thank you I appreciate that now my next question I want to talk to Mr garish just real quickly Ambassador Gish um look I my district
▶ 2:22:28again I talked about the Yuri Canal we are home to some of the most important copper fabricators in the entire nation Paul Rivier started his copper business in my what was now my old old District but in my region uh really important uh that we talk about dealing with the tariffs when it comes to the ability of China to dump uh you know into the region now I'm going to fully acknowledge that we've had some issues over the years a lot of the smelting plants have been moved overseas they're not available U many of our copper suppliers are required to work with Canada
▶ 2:22:59uh I know that the these have been paused uh some of the tariffs on Canada particularly dealing with some of our copper manufacturers can you tell me how uh the Trump Administration can best combat the Chinese efforts uh to undermine our critical us Industries like copper and also how we can I know I'm running out of time but quickly just State how we can deal with this issue with Canada and getting you know smelting and getting our our supply chains back here a lot of our copper Fabricators support bringing the supply chains back but it can't be done overnight could you maybe address that real quickly
▶ 2:23:29sure and and thank you congresswoman and I think you know there are a number of things that the Trump Administration can do that can enhance the enforcement of anti-dumping and counterveiling Duty laws to address the unfair trade uh by China and that can in in turn help with Supply chains here in North America as well and and uh and I think that will have carry-on benefits from that and also I think you know increasing enforcement of the the phase one agreement in in imposing tariffs on Chinese Imports for its violations
▶ 2:24:00of the phase 1 Trade Agreement can also address the the problems with Chinese uh Imports and and addressing evasion uh of of Chinese Imports or you know getting around the various tariff and and trade enforcement uh efforts that that are engaged in by Chinese companies so there's a variety of efforts that that that that they can employ and uh and I think they there will be very much enhanced trade enforcement going forward we appreciate that and these are significant I don't want to forget the aluminum processing PL
▶ 2:24:30some of them right in my own District too uh we we we know that these Supply chains need to come back and we're very committed to that we want to make sure that we're just continuing to move in that direction uh we have a great opportunity to to have a rebirth you um thank you so much and I'm going to uh yield back my time to myself and recognize the gentleman from Pennsylvania Mr smucker for five minutes thank you madam chair this is an important hearing today I want to say first obviously uh we have great American workers
▶ 2:25:00producers manufacturers and company that create wonderful products and they're they are interested in having markets available around the world so it's an important discussion starting with the America First Trade policy memorandum president Trump has shown that he's going to undertake a comprehensive review of our existing trade policies to ensure that we have fair market access for those products and for for our Industries and I will say that we as you've heard today Congressional Republicans are ready to work with the president to
▶ 2:25:30hold our trading partners accountable and enforce a Level Playing Field um I have a number of topics that are specific to my district some you've already touched on one is regarding Dairy and I appreciate uh congresswoman Tenny bringing that up I serve Pennsylvania's 11th congressional district which um is the largest Dairy producer in the Commonwealth of Pennsylvania and also the 10th largest in the country so Dairy very important um and you've already talked a little bit about
▶ 2:26:00it Ambassador D but um wonder if you could talk about the real impact on American farmers if we if we don't get this right if Canada continues to go against the spirit of the usmca in regards uh to its Dairy policy well I think it has a particular impact New York and Pennsylvania because that's where the people in Canada are every everybody you know in the Toronto area Ontario that's that's where the folks live there and so that's that's our Natural Market just as
▶ 2:26:30much as it is uh you know to uh our population centers in the US um but but if I would you know I want to make particular emphasis on on the European Union with regard to Dairy as well uh we've talked today about the uh lack of ability to export to this we provide the European Union country specific trq into the US they don't give us any uh leeway in that regard as well there's there's so many certification requirements process requirements
▶ 2:27:01now they're talking about and and uh you're part of the world Congressman uh the European unions want to come on farm and interview our Farm Workers is is is an discussion with regard to whether or not they're going to trade with us uh the list goes on and on and uh it's high time that uh you know we engage with the Europeans on this subject of egg trade yeah uh definitely agree U Aven influenza um is uh of course my my district is the largest uh
▶ 2:27:31egg producing District in the country I believe and so Avan influenza is um is has considerable impact we're all of course uh concerned about the price of eggs and you one of the things we could do is vaccines I'm just curious this may not even necessarily be trade related but there's been a um sort of a policy not to do the vaccines because of potential impact on trade for the um broilers for for meat um but yet uh France and other countries
▶ 2:28:01have had the vaccine for a while so I think um it's probably time and I know the administration is working on this that we allow vac vaccinations for uh at least our layers um just wonder whether you had any thought on that Congressman this is a big issue for us in the dairy industry and we are very support supportive of vaccines so zuus is is got one coming we just heard today the lanco is working on one and there are trade implications to this and this is a very important point to the best of my understanding
▶ 2:28:31Congressman these vaccines are differentiated vaccines they the term is Diva vaccines means that you can tell the difference from an animal that's been vaccinated versus occurring and got the virus in the wild and and being able to differentiate one from the other solves the trade issue it allows our trading partner to say no that's a vaccinated you know bird or whatever it is vers versus uh what what goes on from from from getting the actual virus
▶ 2:29:02uh that should resolve the trade issues as as we develop these de what they call Diva vaccines anybody else care to weigh in on that at all I don't know okay no all right um also um been concerned with actions taken uh by some of our closest allies like Canada to impose um local content requirements for online streaming platforms um last Congress I co-led a letter with congresswoman Sanchez to us asking for increased oversight on this issue and so I was pleased to see President Trump
▶ 2:29:32highlight that as a matter to investigate uh recently uh Mr male are these requirements structured to specifically Target uh American companies do you think and how are American artists and companies harmed by this unequal treatment there are absolutely targeting us firms I think the bulk of the the payments will land on on us streaming companies uh what I think is particularly unfortunate is the US streaming companies are
▶ 2:30:02actually a platform that helps Canadian uh artists and producers export to the world and so it's a double whammy where we're helping the Canadians actually do something helpful and yet we're being taxed in order to do that uh the agreement does prohibit the rule prohibit discrimination on the basis of nationality which is how they're implementing this and so I do think it does require investigation and and action sure thank you I'm out of time thank you madam chair
▶ 2:30:33the gentleman yields I now recognize the gentleman from Ohio Mr Miller for five minutes thank you very much uh and thank you chairman and thank you to our Witnesses for their time and testimony here today today this committee examines an essential pillar of American's economic strategy trade enforcement policy ensuring fair trade is not just about protecting American industry it's about defending our workers strengthening our businesses and securing long-term economic growth and security for too long we've seen
▶ 2:31:03other countries China Chief among them engage in unfair Trade Practices consistently whether through stateb subsidies Force technology transfers and intellectual property theft burdensome regulations and outright non-compliance with existing trade agreements they've manipulated the system to their advantage and they consistently once again do this like clockwork while the United States has had strong enforcement tools at our disposal the question here is whether we are utilizing them effectively
▶ 2:31:33and adapting to new threats of a rapidly changing global economy trade agreements play a crucial role in leveling the playing field for American businesses reducing trade deficits and ensuring that United States exports and imports compete under Fair and enforcable rules rols when these Agreements are effectively negotiated and enforced they provide manufacturers farmers and service providers with access to New Markets while safeguarding against unfair competition strong enforcement of trade
▶ 2:32:04agreements is critical to prevent Bad actors from exploiting loopholes undercutting American Industries and harming our economic stability which I believe uh Canada and Mexico have negated the usmca agreement with corn GMO down south and with 38% Dairy tar on us here in the United States from one from day one president Trump has made it clear that the era of unchecked unfair Trade Practices is over thankfully under his leadership we have demanded a more balanced trade agenda committed to
▶ 2:32:34expanding Market access for American farmers and manufacturers and have worked to restore our position as a global economic leader uh Ambassador Dow it's great to see you again uh hope you're doing well last year I joined several colleagues in a letter calling on the bind Administration to address the growing AG agricultural trade deficit I had just mentioned beforehand I'm concerned with the treatment of American exports especially the challenges facing dairy products exported to Canada and the EU as you noted in your comments
▶ 2:33:04earlier the United States currently has a dairy trade deficit of nearly $3 billion do alone with the EU can you speak a bit more about the structural trade barriers that are driving these massive deficits and what role can new enforceable Trade Agreement play in addressing these Market access barriers well there is no question that the EU treats us poorly in agriculture and has for a long time um you know they have subsidies protectionism uh you
▶ 2:33:34if it isn't just that you have to meet uh the standard in terms of food safety or whatever it is to get into your art you also have to meet the process the protocol and every step along the way in the process and if you don't follow every step in their process then you don't have access and and it's just unbridled protectionism really at the end of the day it it is has been the case we've been having this conversation uh since the 1980s the year way around you know we've always talked about subsidies in Europe and and now
▶ 2:34:05uh they're not shy about it anymore they just make it clear that you know if if we come up with a way and and dairy uh to meet some of their processes and their requirements and their standards all of a sudden they come up with new ones they they move things around to to prevent us to from having access yeah so they they continue to move the goalpost back in extra five yards they're always moving the goalpost and Agriculture and and uh I think my frustration is in 32 years in Washington we've always let them and and I so from
▶ 2:34:35uh this notion of a reciprocal trade relationship uh we have a 26 billion trade deficit in agriculture with the European Union we have a $3 billion trade deficit in Dairy with the European Union this we we here are exactly what the president is discussing in agriculture and the trading relationship in a between the US and the EU yeah and all we're trying to do is get our allies to uphold to the same agreement that they already signed willingly just to operate in good faith which is incredibly sad that they've decided to negate
▶ 2:35:05those agreements thank you uh for the response to that question Ambassador and it's great to see you again I'm going to try to get this in quick if not uh we can submit it for the record um to the panel uh starting with you Ambassador Gish what additional tools should Congress consider to more effectively address and Target specific trade distortions such as concerns from industrial overcapacity and digital service barriers and which tools can ensure a fair playing field for American businesses thank you congressman and first and foremost I would say passing the leveling the playing field act
▶ 2:35:352.0 IT addresses a number of the problems that you're mentioning uh specifically and and you know among other things we've talked about that some here today but addresses the the crossb subsidies allows Commerce to imply counterveiling duties to subsidies that are provided by one government to a country a company in a third country uh IT addresses the problem of country hopping where we have to bring our companies and workers have to bring multiple investigations to try to address unfair trade uh IT addresses the distortions that result to
▶ 2:36:06costs in various markets from the over capacity problems in China for instance uh and it allows us to adjust costs or would allow the would allow Commerce to adjust costs uh where there's been uh distort ions due to dumped subsidized Imports or import inputs but or inputs that are coming from non-market economies as well so we that that's an essential set of tools that addresses circumvention and evasion as well we also need reforms to the enforc and protect act
▶ 2:36:36to Greater address the problems with Duty evasion uh that that we're experiencing through trans shipment or misclassification as well uh and uh you know at this point companies are just setting up these shell companies and these elaborate operations to try to get around the duties we need to take stronger enforcement action there and we'll get there thank you Ambassador I'm way over time thank you very much thank you the gentleman yields I'd like to thank the witnesses for appearing today we really appreciate your testimony we know this is a
▶ 2:37:06really important issue uh thank the ranking member and everyone here who have been uh terrific uh please be advised that members have two weeks to submit written questions to be answered later in writing those questions and your answers will be made part of the formal hearing record with that the subcommittee stands