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▶ 0:34:01the subcommittee will come to order thank you to the subcommittee members and certainly our Witnesses today for joining us for the second trade subcommittee hearing of the 119th Congress this hearing is another opportunity for members to articulate their trade priorities ahead of the significant steps we anticipate in the implementation of President Trump's America First Trade policy in April first and foremost I am confident we will build bu upon the historic trade negotiation successes of
▶ 0:34:31President Trump's first term in four years the Trump Administration was able to fundamentally alter the trajectory of us trade policy through new agreements with our top trading partners including the United States Mexico Canada agreement usmca as we know the China Phase 1 agreement and the United States Japan Trade Agreement these agreements tore down a Litany of tariff and non-tariff barriers facing American farmers manufacturers and service providers to level the playing field for American industry
▶ 0:35:01and workers they achieved fair and reciprocal treatment for the US and enjoyed substantial support within Congress among my constituents and with many stakeholders across our country further president Trump sought to continue this momentum through comprehensive trade negotiations with the UK and Kenya both of which were strongly supported by many of the members here today and on both sides of the aisle unfortunately this PR ress was hindered by a passive trade agenda during the last four years
▶ 0:35:31meaningful talks with the UK and Kenya were stalled or replaced with quote Frameworks and dialogues end quote and effective enforcement of most aspects of our trade agreements was put on hold meanwhile our adversaries forged ahead China remains active throughout the world striking new trade agreements which spread its malign influence and shape the global economy according to its priorities further our friends and Al allies put in place new discriminatory barriers against our companies and producers
▶ 0:36:02with little fear of a strong us response this is why I'm appreciative of the Trump administration's renewed engagement with our trading partners starting day one this engagement will be key to new bilateral or sectoral trade agreement negotiations while conducting a comprehensive assessment of global tariff and non-tariff barriers to prioritize through trade negotiations our Witnesses here today represent a wide range of sectors within the economy including agriculture manufacturing and Services I look forward
▶ 0:36:32to hearing as each of you hearing from all of you as you highlight opportunities and barriers which need to be addressed through strategic trade negotiations I will note while this sector is not directly represented on today's panel there are also significant opportunities to increase US Energy exports I'm very glad to see President Trump's leadership in increasing US Energy dominance I am proud to represent Nebraska's thirdd District which leads the nation in agriculture production producers in my district know firsthand how critical trade is
▶ 0:37:02especially considering American farmers and ranchers face the highest tariffs with trade agreements which eliminate these barriers our Farmers Thrive for example among our top five beef export destinations American Producers receive preferential tariff treatment through existing trade agreements with four of them when given a Level Playing Field American Producers win the same is true for manufacturing today we'll hear from Harley-Davidson about some egregious tariff barriers facing American Motorcycle
▶ 0:37:33exports when American companies can grow and compete both at home and abroad we share culture increase Global ties and strengthen our economy with fair treatment abroad American manufacturing can Thrive and exports will grow without it American workers and consumers are harmed in Services America is the clear Global leader Wei we rely on fair treatment and access to markets abroad to maintain our Competitive Edge a robust Services sector strengthens
▶ 0:38:03our economy and allows American manufacturing and agriculture to thrive increasing jobs and growing our economy the challenges and opportunities in each of these sectors make clear we must get back to the negotiating table and do so from a position of strength I look forward to working with Ambassador Greer and secretary lutnick to build on areas of success in our current trade agreements while moving forward aggressively to enforce all aspects of those agreements and eliminate additional barriers to US exports around the world
▶ 0:38:33I now recognize ranking member Miss Sanchez for her statement thank you chairman Smith for holding today's hearing and I want to thank all of our Witnesses for being here today as the ranking member of the trade subcommittee I want to see new trade agreements with Partners committed to advancing worker rights protecting the environment providing access to medicines defending human rights safeguarding our intellectual property fighting against corruption and creating the conditions for Fair competition but
▶ 0:39:03this cannot be done without a trusted negotiating partner in the White House one who thinks solely about what's best for the American people and its workers and a Republican party ready to stand with us to protect the Constitution and the rule of law since our last trade subcommittee hearing only a month ago president Trump has recklessly thrown around tariff Authority against our closest trading partners Congress deleg ated National Security and trade authority to Prior presidents under the belief that they could be trusted with that power
▶ 0:39:34but in less than 70 days we have seen how president Trump distorts and weaponizes that delegated authority to serve his own interest settle old scores and most alarming of all to destabilize America's economic and security standing in the world the president's trade Wars have trampled the rule of law and the legal framework American businesses rely on for trade with Canada and Mexico as we will hear from Mr Jonathan root today the president's trade War prompted Canada to retaliate
▶ 0:40:04with a 25% tariff on All American motorcycles including unionmade Harley's from Pennsylvania and Wisconsin American businesses including the creative industry are fighting trade barriers in Canada and Mexico have been just one casualty of this trade war and to top it all off the president appears hellbent on acquiring Greenland annexing can Canada and pillaging the natural resources of our trading partners the administration's gutting of federal agencies
▶ 0:40:35has also heard American businesses who rely on them to enforce worker and environmental rights we cannot afford to have the federal government stop advocating for American ranchers and Farmers facing SPS barriers overseas for US service providers fighting technical trade barriers and for creative and Tech sectors facing intellectual property theft abroad president Trump's attempt to circumvent Congress dismantle our federal government and act as the sole Arbiter of the
▶ 0:41:05US trade policy are an assault on the Constitutional Norms that have guided Congressional leadership on trade since the beginning of America's founding I look forward to hearing from Professor Clawson about the importance of congressional authority over trade house democrats should not stand alone in fighting to reassert our Congressional Authority I want to remind my Republican colleagues that last Congress this committee unanimously approved legislation sponsored by chairman Jason Smith
▶ 0:41:35noting a president lacks the authority to enter into binding trade agreements absent approval from Congress if president Trump seeks to enter into a binding trade agreement with any country he must seek Congressional approval house Democrats are willing to work across the aisle to craft trade agreements that can Garner broad bipartisan support in Congress during the Trump the first Trump administration's renegotiation of NAFTA house Democrats fought for better labor and environmental
▶ 0:42:05standards access to medicines and closing enforcement loopholes despite the president's initial put back push back we created a new facility specific labor enforcement mechanism that has delivered real gains for workers in America and abroad we were successful in making these demands because the president knew he needed congression votes to approve his updated NAFTA I hope this hearing will be an opportunity for this body to lay out bipartisan priorities in
▶ 0:42:35trade negotiations and reclaim Congressional prerogatives I look forward to hearing the testimony for our from our Witnesses and I thank the chairman and yield back the remainder of my time thank you now I have the pleasure of introducing our Witnesses for today's hearing Robbie Kirkland is Chairman of the Texas cattle feed Association Jonathan root is Chief Financial Officer and president of commercial for Harley-Davidson Inc Meredith Broadbent
▶ 0:43:06is non-resident senior adviser economics program and SCH chair in international business at the center for strategic and International Studies Christine Bliss is president of the Coalition of Services Industries and Kathleen Clawson is Professor of law at the Georgetown University Law Center thank you all for sharing your your perspective perspectives your insights and uh certainly uh promotion of some great American Products whether it's beef or some motorcycles glad to say that uh
▶ 0:43:36Nebraska workers help that logo on those motorcycles shine all the more and uh there's great things happening Across America right now even amidst some of the the struggles that that exist and but I hope to uh and I know we will hear good perspectives moving forward here from our witnesses as you can share your your insights uh the light you will see in front of you uh green obviously means keep going yellow means uh start to wrap it up and certainly
▶ 0:44:06red means it's time for the next one so Mr Kirkland will will begin and you are recognized for five minutes thank you Mr chairman and members of the committee my name is Robbie Kirkland and I am advis president and general manager of Kirkland feed yard my family's thirdd generation Farm Ranch and feed lot operation near Vega Texas I'm also the chairman of Texas Cattle feeders Association where I'm a member our members feed and Market
▶ 0:44:3625% of the usfed cattle I'm here today on behalf of the N National Cattleman's beef Association where I serve as a board of director ncba has been The Trusted leader and definitive voice of the US cattle and beef industry since 1898 and I'm honored to share our perspective on the importance of international trade the United States has some of the safest and most efficient practices production practices in the world and we utilize Science and
▶ 0:45:07Technology to produce 18% of the world's beef with 6% of the world's cattle while generating only 2% of the US greenhouse gases consumers at home and abroad trust us beef 85% of us beef is consumed by but there are certain Cuts Pro and products like short ribs tongues livers and other organ Meats with strong consumer demand in Asia
▶ 0:45:37and Latin America even facing global economic headwinds demand for us beef remains strong in 2024 we exported $10.45 billion worth of beef which equates to a value of $415 per head of fed cattle Korea ja Japan and China accounted for 58% of our total beef exports removed trade barriers and gave us competitive market access but over the past few years
▶ 0:46:07the US government has done little to expand our footprint abroad while our competitors competitors aggressively secured access to the markets and we need to re-engage and level the plane field unfortunately USB faces a 50% tariff in Thailand a 30% tariff in Viet Vietnam and many non-tariff barriers in Australia Europe and China we need Congress and the Trump Administration to ensure fair trade in these markets
▶ 0:46:37while securing new agreements with allies like the United Kingdom as you know beef uh Americans love ground beef but we don't produce enough lean grind in the US to satisfy domestic demand therefore we do import meat from beef from other countries to combine with our trimmings to help meet domestic demand and ensure affordability for ground beef we must ensure any country that is granted access to the US does not use us consumers
▶ 0:47:08does not put us consumers or us cattle herd at risk this is a major concern with Brazil Paraguay and other countries that have had a history of foot and mouth disease and Highly Questionable record on food and Animal Health we need Congress and President Trump to hold these Partners accountable and ensure the safety of American consumers and our cattle herd there's a long Mutual beneficial history of the cattle and beef trade between us
▶ 0:47:38Mexico and Canada this partnership is devised and and competitive due to the success of the US Mexico Canada agreement most of the North American cattle fed and processed capacity is in the United States cattle Imports represent 2% of our overall cattle herd and only 6.5% of our total cattle uh Harvest cattle Imports fill seasonal lows
▶ 0:48:08in the feed yards and packing plants and keep them running at optimal capacity especially in the southwest demand for us beef is on the rise because of its strong reputation and safety quality and positive eating experience Americans Farm farmers and Ranchers have benefited from the market-driven science-based trade policies that we must continue to remove and we must continue to remove the trade barriers so that us
▶ 0:48:39cattle producers can capitalize on overseas consumer demand thank you for allowing me to provide my perspective on this important topic and I look forward to your questions thank you Mr Kirkland now I recognize Mr Root for five minutes chairman Smith ranking member Sanchez distinguished members of the subcommittee on trade and members of the of the full Ways and Means Committee thank you for giving me the opportunity today to present on such an important
▶ 0:49:09issue my name is Jonathan root I am the President of commercial and Chief Financial Officer at Harley-Davidson back in 1903 our Founders William Harley and Arthur William and Walter Davidson sparked a transportation Revolution and a motorcycle culture that would grow and spread across generations and geographies 122 years later as a global manufacturer we still proudly and authentically stand up for the things we believe in most the rebel spirit in all of
▶ 0:49:39us Unity individuality and personal freedom today Harley-Davidson employs over 5,500 people globally of which over 4,500 are employed in the United States including those with the I am and usw unions across our manufacturing sites in Wisconsin and Pennsylvania while our corporate headquarters is still a Stones throwaway from the original workshed in downtown Milwaukee Wisconsin our powertrain operations in monoman Falls
▶ 0:50:09create the heartbeat of our motorcycles and transmissions for all of our Harley-Davidson motorcycles in Tomahawk North Central Wisconsin we have been making motorcycle parts for nearly 60 years and in Pennsylvania our York vehicle operations plant has been a staple in the local community for over 50 years with almost 1,300 employees working working there three assembly lines build 33 iconic models of American designed and developed
▶ 0:50:39motorcycles with our skilled American Union employees as I mentioned previously while proudly American Harley-Davidson is also a global company we have a facility in Brazil where we assemble motorcycles and powertrains using sub assembled kits from our tomahawk and York plants for our customers in Brazil I would like to note that this facility was created in direct response to trade barriers erected by the Brazilian government intended to limit Imports lastly we
▶ 0:51:09also have a facility in Thailand that allows us to manufacture closer to Growing markets in that region and to benefit from the regional comprehensive economic partnership as part of the aan initiative the US has long been and Remains the key market for heavyweight motorcycles with engines larger than 601 cubic cm Wisconsin and Pennsylvania made motorcycles account for over 95% of our Us sales the US remains our largest Workforce our largest
▶ 0:51:40country of production and accounts for the majority of Harley-Davidson's Global sales however we are under incredible pressures at home and abroad through uneven and unfair Trade Practices I'd like to highlight the scale of the imbalance as as you are likely aware the EU has scheduled a devastating total Tariff of 56% for Harley-Davidson motorcycles meaning 50 percentage points is retaliatory tariff plus the base six percentage points import Duty
▶ 0:52:10irrespective of the place of their manufacturer this is a shocking comparison to the 0 to 2.4% import Duty that International Motorcycle brands are able to take advantage of when accessing the US market whether they manufacture these in Europe Asia or elsewhere it should be noted that from 2018 to 2021 Harley-Davidson exports to the EU have already faced an additional 25% tariff which costs an estimated $166
▶ 0:52:41million as we tried to avoid passing costs on to customers in an attempt to secure the company's future in Europe however a 56% tariff is indefensible and will impact our ability to sell motorcycles in Europe continuing with retaliatory tariffs a 25% tariff is currently being applied to all motorcycles imported into Canada from the US since March 4th another clear effort to politically Target Harley-Davidson as an American icon Harley-Davidson competes in other foreign
▶ 0:53:11markets with luxury taxes up to 150% as well as additional non-tariff barriers related to everything from licensing barriers to emissions pricing using Denmark in the EU to further emphasize my point a Harley-Davidson Road Glide after adding a 25% vat and an incredible 150% luxury tax already cost the customer around 77,000 us but should the eu's additional 50% retaliatory tariff be applied this would balloon the price of
▶ 0:53:41this motorcycle in Denmark to an eyew watering $124,000 over four times the cost to a customer in the US where this model starts from $28,000 what was a dream of personal expression and freedom on the road is turned into an unatt aable luxury for many prospective Harley-Davidson customers in Europe turning to Asia many customers Levy high duties and high taxes on motorcycles coming from the US is standard practice a few examples of Duties and taxes associated with us produced
▶ 0:54:11motorcycles follow Thailand imposes a 60% import Duty a 30% excise tax and a 7% vat Indonesia charges a 40% import Duty an exorbitant 95% luxury tax and 12% vat Vietnam has an import duty of 40% an excise duty of 21% and 8% vat and India has historically imposed a 100% import Duty on us motorcycles 3% excise duty and 28%
▶ 0:54:41vat all the countries I mentioned as examples have no import duties on motorcycles from other aan countries as part of negotiated trade agreements among those countries lastly I would like to mention China which also imposes High tariffs 30% import Duty and 25% retaliatory tariffs and 133% vat and a Cascade of barriers Harley-Davidson supports a fair and reciprocal us trade agenda with our trading partners for too long the trade policy imbalance has permitted
▶ 0:55:11manufacturers to use cheap labor cheap duties from developing and emerging economies to enter the US market at a disin advantage over companies that remain dedicated to the American worker Harley-Davidson while at the same time our us- made vehicles are met with huge import tariffs and other restrictions to enter other markets my ask here today is a simple one and that is fairness it is very clear that Harley-Davidson is being discriminated against and politically targeted by the EU and Canada moreover competitor brand
▶ 0:55:42should not be allowed to take advantage of lowcost manufacturing and preferential import Duty when accessing the US market I want to thank the committee again for the opportunity to testify as you continue your important work to create a More Level Playing Field for American American manufacturers I remain at your disposal to share Harley-Davidson's experience and most importantly to help reduce barriers to American motorcycles and ensure fair treatment for our company thank you Mr Root uh Miss Broadbent you recognized for five minutes welcome back to the
▶ 0:56:12uh the committee room as a ways and means alumni staffer welcome back I appreciate it chairman Smith ranking member Sanchez and members of the committee of the subcommittee it's a privilege to speak with you about American Trade negotiation priorities an area of huge opportunity and responsibility I'm currently a senior adviser non-resident at the center for strategic and international studies and these views are my own trade negotiation priorities are front and center
▶ 0:56:42for the US economy and for your constituents each of you brings to this debate a keen grasp of the impact of American trade policies on the workers and businesses and farmers in your District Congress should work work with the administration to pursue a comprehensive trade and investment agreement with the United Kingdom that includes tailored approaches to the challenging security trade and Tech issues facing both countries president Trump and prime minister starmer have re-engaged
▶ 0:57:13on this and the Chairman's Bill hr1 1743 sets out bipartisan goals and procedures further cementing bilateral trade relations with a close Ally will give us trade negotiators the opportunity to craft state-of-the-art Provisions that reflect the similarity of our countries in terms of advanced Industries working conditions and regulations a comprehensive Trade Agreement will have the added benefit of clearly Rel
▶ 0:57:43legislating Congressional digital trade NE negotiating objectives that have been undermined internationally by the previous administration's decision to retreat on these issues at the WTO current geopolitical tensions push the US and the UK to rely Less on China as an export market and source of imports Industrial Supply chains in both countries are reorganizing UK faces conflict in Europe and China has aligned with Russia against
▶ 0:58:13key us and UK National Security interests China floods World Markets with excess manufactured products such as EVS solar panels and batteries and is coming on line with a large volume of aircraft manufacturing in the US and UK industrial towns has been swamped the two governments have the opportunity to construct a common trade remedy response mechanism to address non-market economy
▶ 0:58:43Trade Practices resulting in overcapacity being dumped onto World Markets since brexit the U UK has pushed hard to conclude trade agreements it has recently been accepted as the first new member of the comprehensive and Progressive transpacific partnership commanding the world's largest consumer Market the US Remains the world's most sought-after Trade Agreement partner moving ahead now with a
▶ 0:59:14strategically chosen partner capitalizes on this Advantage as other economies grow and develop over time the US Advantage will decline moving ahead now would best position the US to achieve its job objectives concluding an agreement with the UK would rejuvenate American influence and Tra over trade and regulation Grassroots frustration with heavy-handed regulation is at least rhetorically behind brexit
▶ 0:59:44and figures prominently in British politics UK M maintains Legacy regulations from its prior membership in EU virtually all exporting sectors of the US economy including agriculture services and Manufacturing see an agreement with the UK as an opportunity to innovate in regulatory cooperation on standards and product approvals according to us industry many UK
▶ 1:00:14regulations are unnecessarily restrictive non- science-based approaches that for example require us manufacturers to ban or impose costly restriction itions on substances based on possible but unproven risk in joining CP TPP the UK has taken a step toward embracing the US MCA model of respecting WTO TBT principles for determining legitimate
▶ 1:00:44International standards this model defined by domestic procedures for adequacy and mutual recognition is the most constructed P most constructive path for opening the UK Market to many US exports us and UK negotiators should focus on four goals building on usmca the provisions of which are Road tested and agreed to on a bipartisan basis in the US and they stand for state-ofthe-art stand
▶ 1:01:15a state-ofthe-art for trade agreements globally promoting Innovative mechanisms to harmonize and and improve selected regulatory procedures in the UK which currently adheres largely to EU regulatory practice where goals of consumer safety are the same as they almost always are but tough domestic politics resist harmonization of Regulation Mutual recognition of each each other's standards will be important reaching agreement between
▶ 1:01:45the world's two most digitally intensive economies on rules for data flows a SE a sector that will drive the future of both economies is critically important these rules can then be replicated globally and finally we should achieve a meeting of the minds with the UK and a fair and transparent trade re remedy mechanism for protecting both countries's industries from harmful non-market economy practices the overall benefit of a
▶ 1:02:15US UK trade deal is simple and obvious improving the security and E economic prospects of us and UK citizens and workers in the global economy if the United States aspires to set standards for regulations that will be followed by other countries a US UK Trade Agreement is the next and most logical step thank and it has the virtue of being doable missing the opportunity to strike a deal particularly on regulatory principles
▶ 1:02:45and data flows with such a well-matched willing partner as the Kingdom would be really an enormous mistake thank you thank you thank you now recognize for five minutes Miss Bliss thank you Mr chairman you want to turn on your microphone there thank you Mr chairman ranking member Sanchez and subcommittee members I really appreciate the opportunity to speak today on the critical role of services
▶ 1:03:16and digital trade in advancing American negotiating priorities my name is Christine Bliss and I'm president of the Coalition of Services Industries nonprofit Association representing US service providers including in financial services technology Logistics and media and entertainment sectors just to name a few services are the backbone of the American economy in 2023 the US exported over 1 trillion in crossb Services generating
▶ 1:03:46a trade surplus of nearly 280 billion and US Services exports are 68% of gross US exports even more significant are revenues from Services delivered through foreign offices which reach $2.1 trillion just as important services are critical to supporting us Agriculture and Manufacturing through Logistics financing Insurance cloud services digital payment services and even
▶ 1:04:16soil testing and Animal Health monitoring these services are critical for delivering manufactured goods and agricultural products and livest stock worldwide services are increasingly delivered through digital means which means we need trade firworks non only for services but for s for digital as well high standard services and digital trade disciplines should be Central to Future us trade agreements without them the rise of global trade barriers threatened
▶ 1:04:46the US competitive advantage in services and digital trade and our leadership in key Technologies like AI just to give you an example the oecd that tracks trade restrictiveness has documented a 25% increase in trade barriers to services and digital trade 2013 the usmca and the US Japan digital Trade Agreement should be the building blocks for new agreements digital trade discipline should include promotion of crossb data flows
▶ 1:05:17a Prohibition against forced data localization protection of source code and algorithms and a ban on discrimination against us digital content it should also include a permanent ban on custom duties on Transmissions the US should also actively push back against discriminatory digital sovereignty requirements Digital Services taxes discriminatory online streaming legislation and AI regulation that would undermine us competitiveness we
▶ 1:05:47should ensure that foreign governments Accord fair treatment to us technology firms and to electronic payment services provided providers disciplines on services financial services and investment should build on usmca commitments including the removal of foreign Equity limits in terms of priority markets the UK should top the list of candidates for a comprehensive Trade Agreement as noted in the Chairman's bill with high standard commitments
▶ 1:06:17on services financial services and digital trade offering a robust template for other us trade agreements moreover the us and UK have a strong and balanced bilateral trade relationship with respect to India the US should prioritize the removal of persistent services and digital barriers and press forcefully for fair and Equitable treatment of us services and digital providers greater Market access and India's support for extending the WTO e-commerce moratorium
▶ 1:06:47on China the US government should enforce outstanding Services commitments under phase one particularly licensing of eps Services providers and services of us and purchases of us Services another major concern is as that as bilateral tensions have grown Beijing has applied selective pressure to us companies seeking to intimidate them through targeted regulatory enforcement and any Monopoly investigations the US government should address these in trade
▶ 1:07:18negotiations in the usmca review the US should work with Canada and mexic to strengthen the agreement while addressing ing major trade frictions these include Canada's DST and C11 audiovisual content legislation and Mexico's concerning retroactive interpretation of its vat tax as well as its unfair treatment of us electronic payment services and telecommunication providers regarding Korea the US should press for elimination of services
▶ 1:07:48and digital barriers such as restrictions on cloud services data localization and discriminatory legis ation and regulation with regard to platforms the US should also and I want to pause here because I'm Switching gears to sectoral agreements the US should also consider pursuing a new high standard digital and services trade deal with likeminded Partners such as Australia Japan Singapore the UK and Costa Rica such a plurilateral agreement
▶ 1:08:19could provide an affirmative rules-based Counterpoint to China's mercantilist trade approach finally we urge the administrations to secure the extension of the WTO moratorium on e-commerce duties and to positively re-engage and the WTO JSI e-commerce negotiations We Stand ready to support your efforts and ensuring American services in digital trade rank high among American negotiating priorities I thank you and I look forward
▶ 1:08:49to your questions thank you and I recognize Miss Clawson 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 cooperation between the legislative and executive branches in an across theboard Trade Agreement agenda trade agreements have long served important functions in our nation's history from the earliest days the United
▶ 1:09:19States has pursued treaties and other forms of agreements with its trading partners for multiple purposes trade agreements have been complements to other tools in the economic regulatory security and foreign toolkits Congress has had and continues to have a critical role in this exercise primarily Congress tasks the executive branch with negotiating agreements and often approves those agreements
▶ 1:09:50that the executive seeks to enter the Cornerstone in that relationship has always been article one section 8 of The Constitution which provides that Congress shall have power to lay and collect taxes duties imposts and excises and to regulate commerce with foreign Nations given their political significance large free trade agreements have occupied considerable time and attention both among members of Congress
▶ 1:10:20and in the eyes of the public these agreements authorized and approved d by Congress are the most wellknown of our trade agreements the collaborative agreement making process through which they are made is challenging and it includes many points of compromise and engagement but ftas are not the only trade related agreements into which the United States has entered in recent decades the executive branch agencies have concluded hundreds of trade related agreements
▶ 1:10:51without clear Congressional authorization or approval refer to these as trade executive agreements given the lack of congressional involvement some colleagues also refer to them as skinny or Min deals since they have been narrowly focused on one or a small set of trade issues but they are not small in their impact you'll be familiar with several of these from the last eight years such as the handful of deals concluded with Japan and a wide- ranging
▶ 1:11:21agreement with Taiwan those are just a sample in total the United States maintains trade agreements that fall short of comprehensive ftas with 10030 countries although trade executive agreements frequently serve meaningful ends in resolving trade problems for us Industries and other stakeholders they are not without substantive and procedural costs these sorts of agreements tend to circumvent regular Ru
▶ 1:11:51making and the important guard rails set forth in in legislation including transparency consultation presentment and approval requirements as well as conditions on withdrawal publication and Reporting are further problem surrounding these agreements what becomes Apparent from these deals attractive functions as well as their costs is that alternative trade agreements to ftas are at least somewhat useful some of
▶ 1:12:22the time so space remains for trade deals con concentrating on Specialized topics and for bilateral agreements with specific countries not all trading partners may be able or willing to negotiate traditional comprehensive deals or deals with multiple countries but smaller more focused deals may be possible and indeed beneficial to the United States the important work of this subcommittee can lay a solid foundation for the
▶ 1:12:52executive branch to undertake negotiations in these areas with oversight and input from Congress so that future trade agreements are subject to appropriate scrutiny getting the balance right between the branches for different types of trade agreements will be important not just as a constitutional matter but also because such agreements will be more durable ambitious balanced and legitimate than agreements entered into by the executive alone
▶ 1:13:22there is an opportunity now to review and where necessary craft new legislation to ensure that future us trade agreements are on strong footing in initiative that will only make our nation even stronger thank you again for this opportunity to provide input into the work of the subcommittee thank you Miss Clawson and again thank you to our entire panel for sharing your perspective we'll now go into the question and answer period where we can have a a good exchange
▶ 1:13:52I'll begin uh bringing up Australian beef Mr Kirkland uh this is an issue I'm I've been concerned now certainly I represent a constituency that produces a lot of beef uh some would call it the top beef producing District in America but we don't want to get too caught up in those details um but clearly American beef leads the world in terms of quality and affordability a lot of great qualities there unfortunately some of our trading partners
▶ 1:14:22many of them actually adopt significant ter and non-tariff barriers for example for 20 years Australian beef has enjoyed full access to the US market and while the Australian government imposes non science-based restrictions on our beef and could you provide more background on perhaps on these restrictions and and perhaps reflect a little bit on Australia's measures as Justified or not thank you
▶ 1:14:52chairman we might debate about who has the most cattle but uh we won today so no uh just all all in kid inside no I appreciate your question and and to give you that Insight so for for the last 20 years Australia has sold roughly 29 billion dollar worth of beef to American consumers in that same time we have not exported and sold $1 worth of beef fresh beef in the country of Australia that's that's a
▶ 1:15:22clear clear-cut differential um Australians have exhausted all their approval processes over the last 20 years and uh we believe in science-based protocols and we don't believe that there's any science-based protocols there U we fully believe that us deserves full access to the Australian Market clearly clearly an imbalance and I appreciate that um moving on to uh UK uh Miss Broadband
▶ 1:15:53I know that there's been a lot discussed about a potential trade agreement with the UK there's some concern about uh UK kind of reverting back to more uh EU style regulations certainly inconsistent with what I would say the voters of the UK ultimately decided on some time ago but would you agree that the possibility uh exists that the UK might move closer to EU standards and perhaps the risk associated with that perhap
▶ 1:16:23whether it's agriculture or even digital the it is a big risk I think and I guess my point would be it's this is the time for us to negotiate with the UK because they're sort of sitting on a on a bit of a pivotal spot in the sense that brexit happened five years ago they've really wrestled with what the EU retained law is in the UK there's been a lot of talk of a reset back with Brussels now that there's a new
▶ 1:16:53labor government in the UK and the EU will try to demand realignment so that the UK is basically implementing UK regulations and that's not good for us interests I think we have a a chance here to work with the UK on some more uh constructive procedures on Mutual recognition and just exchanging viewpoints and how we regulate trying to find the least uh intrusive ways to do it and I don't
▶ 1:17:23think Brussels regulation is really something that that that the UK should aspire to and I think the US negotiators can make a great case for working together with the UK to be a little bit less than the heavy-handed nature of Brussels regulation would you say there's some opportunities perhaps on leveling a playing field on agriculture absolutely because that's a huge break a huge uh break on our exports into both the UK and Europe because the UK has a lot of
▶ 1:17:53uh Legacy EU regulations and particularly in beef and so forth and so this would be one of the things the US would be interested in and it's you know it's a give and take in a negotiation but I think we we have a huge opportunity for making mutually advantageous con concessions to each other on things right well I I'm uh always eager to really reflect on M modern agriculture here in the US that produces quality and affordability and uh that I I would hope that our trading partners especially our friendly trading
▶ 1:18:24partners I would want to take advantage of of that as well shifting gears just a bit uh Mr Root you talked a lot about a vat value added tax our trading partners kind of uh I would say play games with that they they wave or refund the vat on their own products for their own taxpayers or consumers and yet uh when they ship stuff or when they ship it to us they wave the vat and yet they don't wave on anything we ship to them whether it's your products or a
▶ 1:18:54cross economy and that certainly creates an unlevel playing field I think you would you would agree with that can you elaborate more on how you see that I I know you listed a long list of various countries in in these uh uneven approaches that they take but can you give a little more commentary to that inequity certainly thank you chairman Smith so as we look at at vat we do feel like the landscape
▶ 1:19:24is is slightly uneven and slightly unequal in terms of the treatment of American Products in many foreign markets uh obviously vat can be very large percentages we demonstrated some of those examples in my opening comments uh that certainly is something that we feel puts us as a US manufacturer at a competitive disadvantage uh when you look at the premium nature of the product that we produce certainly adds a fair amount of cost from a consumer
▶ 1:19:54standpoint uh and again we think is a perfect example of an uneven playing field and something that we would like to see addressed and and I might add with emphasis that so many countries do this it really creates a a broad uh unlevel playing field as as uh we keep pointing to uh so it's my hope that we can uh ultimately encourage our trading partners to take a a different approach so with that I now recognize Miss Sanchez
▶ 1:20:24for for five minutes for her questions thank you Mr chairman um Professor Clauson last Congress this committee passed bipartisan legislation that affirmed congress's constitutional Authority on trade and implemented a trade agreement with Taiwan as my colleagues may recall the Biden Administration was not planning on sending the trade agreement with Taiwan to Congress for approval Democrats and Republicans in both Chambers however raised concerns with the administration's approach
▶ 1:20:55because it usurped Congressional authority over trade I hope my Republican colleagues will remember this if president Trump decides to sideline Congress by relying on Executive authority to enter into trade agreements Professor Clawson in your written testimony you noted that restoring an appropriate separation of powers between Congress and the executive branch on trade is important not just as a constitutional matter but also because agreements that are passed by Congress are more durable ambitious
▶ 1:21:25balanced and legitimate than agreements entered into by the executive branch alone could you please expand on that just a little bit absolutely first an agreement approved by Congress is it likely to enjoy higher levels of bipartisan support so it's likely that a subsequent Administration will encounter more resistance if it seeks to withdraw for example similarly because of its legislative implementation a congressional executive agreement is also
▶ 1:21:56more likely to remain in force longer providing greater certainty uh for businesses and for workers second Congress sets a higher bar for outcomes because it is focused on addressing a diverse array of economic interests one could see this in the usmca negotiations for example the final product which included the strongest labor enforcement Provisions to date in a trade agreement Congress also has broader authorities including importantly to make changes to us laws
▶ 1:22:26affording negotiators a broader range of carrots and sticks to obtain a better outcome for us constituencies third uh Congress collectively represents a wide range of interests and can monitor the domestic impact uh of agreements through constituent engagement and last trade agreements approved by Congress can enjoy more legitimacy because voters can express their views most directly to their Congressional Representatives so working together the anch es can often achieve more than they can working alone
▶ 1:22:57thank you very much for that um answer Miss Bliss um in your written testimony you noted that China did not meet its commitments to purchase us Services Under the first Trump administration's phase one agreement the phase one agreement called for China to purchase at least 12.8 billion additional services in the first year of implementation and $25.1 billion after that however US service Services exports to China declined
▶ 1:23:27sharply after the agreement was signed reaching an an estimated 54% of the level mandated by The Phase 1 agreement in addition to not meeting its commitments under Phase One China maintains numerous trade barriers to US service exports including for cloud services financial services Insurance telecommunications and audio VI Vis uh audiovisual Services Miss Bliss could you could you please elaborate on China's trade barriers to exports of us
▶ 1:23:58audiovisual Services especially streaming of movies shows and music use your microphone please thank you congresswoman chanchez uh yes uh I absolutely would agree with you that that China is very deficient in meeting its phase one commitments and with respect to audiovisual um what they have failed to do is to increase the number
▶ 1:24:28of movie releases that they're bound to do Under the previous uh binding agreement um and also the percentage of Revenue is supposed to increase as well so I think from the standpoint of us industry it's critically important that we hold their feet to the fire on both issues um and I think previously we had viewed this as potentially lwh hanging fruit so it's a it's a real shame it's a missed opportunity so I absolutely would agree with you that this is an important issue to address along
▶ 1:24:58with the other Myriad barriers um and if I can just mention one of the things that we're particularly concerned about is the level of harassment that's going on of us companies right now okay thank you I have just a few seconds left but in this time I just wanted to point out that in Mr Root's testimony he talked about a 56% retaliatory tariff from the European Union and a 25% retaliatory tariff from Canada I just want to point out that retaliatory tariffs are in response to tariffs that
▶ 1:25:28the US or more specifically president Trump has imposed uh first so it's a tit fortat battle that started with the US picking the fight and um that's how trade Wars get started and I'm not exactly anxious to see our country in trade Wars with Canada Mexico China and the European Union and with that all you'll be back thank you I now recognize Mr Arrington for five minutes I thank the chairman and the ranking member for organizing the hearing and the panelist for
▶ 1:25:58your time and Council um I'm especially excited to have a fellow West Texan and act producer from my part of this great country in Mr Kirkland who uh has impeccable educational credentials as a graduate of Texas Tech University so I I am more confident today than maybe at any other time that we'll solve some problems and seiz some opportunities for the United States thank you Mr Kirkland
▶ 1:26:28for all you do to to make West Texas great and uh let's talk about making American Trade great it doesn't work when we have an average trade rate of 3.3% and uh the 20 largest economies countries uh who we compete with and trade with have twice that rate and when you look at agriculture culture I think our average rate is around 5% but uh the 20
▶ 1:26:58largest economies have three times that rate how are we supposed to accept the fact that there is such a thing as free trade without fair trade we're simply uh attempting and this President is attempting for the second time because we lost a lot of the ground we made up in his first term to reset those relationship such that we're playing by the same set of rules then everyone wins
▶ 1:27:29then consumers get to choose and producers and manufacturers get to make that value proposition and uh and everybody's quality of life improves as a result um do you see it any differently than that I mean we're both West Texans I mean seems pretty straightforward doesn't mean there won't be some pain associated on the front end there certainly was in the first uh Trump term but as I recall
▶ 1:27:59he was successful at bringing those trade Partners to the table and in fact because of of uh of the actions uh and Leadership that he demonstrated the same posture he's taking today we were able to negotiate trade deals with five countries that represent over 50% of our export markets now that's success in West Texas I don't know about any other part of the country what say you Mr Kirkland
▶ 1:28:29my fellow Texas Tech Red Raider well thank you and ream so um weet 16 baby that's right here we go here we go okay uh but I I do agree um we do appreciate what um what president Trump did in his first term he he opened some doors he opened doors in China where we hadn't traded for for 20 years possibly and so he opened doors and then like I said over the last four years there has been a uh just not as much aggression there
▶ 1:28:59and so it's and it's time to to to step up to the plate in our opinion um you know the deal is it it needs to science-based um it's got to be you know we know that there's there's going to be restrictions we know that sometimes there's going to be retaliatory tariffs we do understand that I know us as a company and our family we understand that in in the agriculture your business and do we like it no not necessarily but we do understand for our next Generation that's coming up
▶ 1:29:30our fourth generation of family Farmers that are that are starting to come into our business today it's going to have we're going to have to go through a little bit of pain to get to the spot where that next round of of of of trade and everything is is prosperous for the Next Generation you know I can't imagine the Texas Tech Red Raiders taking on the Arkansas Hogs and let the Arkansas r laser backs shoot layups for their free throws or pick up the ball and run with it instead of dribbling
▶ 1:30:01I mean can you ever imagine watching a competition where there were two sets of rules now we' we'd still beat them no question under any set of rules and circumstances but anyway it's it just seems to me that it's unamerican to not fight for our manufacturers producers and workers to Simply have an even even playing field and that's I imagine whether it's Miss Sanchez's District or mine we'll whip the competition every day and twice on Sunday we have the
▶ 1:30:31best technology the best operators and producers the hardest workers uh I mean we've got the in advantages um so at any rate I appreciate your contributions how about a last word from uh my friend from well and I so I agree 100% we're we're not scared of competition right right competition makes things better and so that's that's that's what we believe and just just like you said and so um we just want a fair playe
▶ 1:31:01playing field and uh and let's you know that way people can enjoy the the great beef that we produce all across our country Nebraska Kansas Texas all across and Iowa you know across the feeding country um because people uh in this world we know love American beef amen I you back thank you I now recognize Mr Panetta for five minutes thank you Mr chairman ranking member Sanchez gentlemen ladies thank you for being here today and for your
▶ 1:31:31time your experience and your wisdom for sharing it with us I appreciate that um I want to especially highlight this um second hearing uh thank you Mr chairman in which we're actually discussing trade negotiation priorities and what I hope is laying the foundation for the United States to return to entering into free trade agreements uh Mr Kirkland I agree with with you show a little more aggression when it comes to entering into these agreements is something that needs to be done in order to reduce
▶ 1:32:01both tariff and non-tariff barriers to trade now as much as I appreciated the last administration's Frameworks they are nothing they are nothing compared to agreements which can open up new markets for our producers and manufacturers establish enforcement mechanisms and ensure that American goods are treated fairly and we get to these agreements though through serious difficult and complicated negotiations that's why you negotiate fortunately what we've seen especially
▶ 1:32:32politically is that trade has become a four-letter word and based on those politics there's been a sharp decline in the negotiations that can lead to agreements and also a decline in obviously the number of agreements not just in the last four years but in the last couple decades yes the Biden Administration not only didn't even enter into any agreements and failed to take legitimate steps towards any agreement the first Trump Administration Struck One usmca the Obama Administration struck three and the Bush Administration
▶ 1:33:0213 free trade agreements 13 free trade agreements under the Bush Administration now it appears we have unfortunately in administration that although they've shown an interest for agreements the only t-w they're using is for tariffs this inconsistent shoot now aim later approach on tariffs tangibly undermines our ability to work with partners ERS and expand trade and small businesses are getting caught in the crosshairs a perfect example is what happened to one of my small food distributors in my district
▶ 1:33:32simply because their shipment got stuck in traffic at the Mexican border their goods entered the us only 16 minutes after president Trump's Mexico tariffs went into effect and then 3 days before there was an exemption for usmca compliant goods and now this small business is facing a $38,000 bill from CBP something where working to remedy tariffs on our closest Partners also undermine faith in negotiations and poison the relationships that we need to advance trade agreements
▶ 1:34:03additionally tariffs increase input cost and expose us industry and producers to crippling retaliatory tariffs as we've talked about which can shut down markets that are vital to our economy the administration's tariffs are also I believe and I think many of us should believe are an overreach of executive power and Congress must reassert its role in trade policy both to mitigate these damaging tariffs and to affirmatively shape the trade agenda going forward again I appreciate this hearing we should be doing more of these hearings we should
▶ 1:34:33be doing more negotiations and yes with the ultimate goal of entering more trade agreements free trade agreements and assuring that congress's constitutional role is lived up to miss Broadbent one region that I've been outspoken about with especially with free trade agreements is Central Asia which is critical I believe to us strategic in interest based on many areas including its capacity for Rare Earth minerals and its geography situated between Russia and China there's this thing called the Jackson vanic Amendment
▶ 1:35:03though that denies permanent normal trade relations to several Central Asian Nations including kazakstan which is a WTO member in good standing and a strong partner for the United States in the region now Jackson vanck was originally intended to prevent the Soviet Union from halting Jewish immigration however that's no longer applicable it's Antiquated and we've even lifted Jackson vanic for Russia and other countries in your view Miss Broadbent in your view would lifting Jackson Bic for Kazakhstan
▶ 1:35:33improve us relationships in Central Asia and also how could deepening trade relations in Central Asia bring Central Asian Nations closer to the United States as opposed to Russia or China thank you Mr Panetta I mean I think it's that statute has a longstanding statute since I think 1974 and it it achieved a lot of things during its life I think probably it is a good time to relook at it that region of the world
▶ 1:36:04has a lot of Outreach going on from Russia and China and the these countries have been uh pretty pretty vocal about wanting to expand trade with the US and they've got minerals they've got opportunities for our exporters so it would be something good to look at I think thank you I do have a questions I don't have a lot of time so I'm just going to yield it back thank you thank you now recognize Miss Miller for five minutes thank you Mr chairman and ranking member
▶ 1:36:34Sanchez and thank you all for being here today this can be an exciting trade time for trade and my colleagues and I in the Ways and Means Committee are ready to invigorate American manufacturing and engage with our International Partners to get moving on trade negotiations again I agree absolutely with Mr Panetta about Jackson vanic and what we need to do in Central Asia central that
▶ 1:37:04particular area so now I'll speak about the indopacific the indopacific is an essential strategic foothold to combat China's quest for global economic dominance the econom the economies of the indo-pacific are rapidly developing the growing personal wealth of the citizens in the Indo Pacific provides more export opportunities the advances in the Region's manufacturing sector enables us to diversify our supply chain away from
▶ 1:37:35China unfortunately we are falling severely behind as China makes significant strides while the United States has not concluded a single trade agreement with an indopacific partner in more than 10 years China has concluded negotiations with the association of Southeast Asian Nations to enhance their massive free trade area in October of 2024 this is why I reintroduced the US trade leadership in the indopacific
▶ 1:38:05act with several of my colleagues on this committee this bill will make significant inroads to further our Partnerships in the region Mr Root as you are aware our lack of Engagement in the Indo Pacific has left the door open for these nations to stifle bilateral trade by imposing significant trade barriers on American Products this includes remarkably steep tariffs on Harley-Davidson motorcycles could you speak
▶ 1:38:35to the importance of the indo-pacific as an export market and what can Congress do to overcome these barriers that are currently in place thank you congresswoman Miller uh as we look we certainly believe that Asia Pacific presents a significant opportunity over the midterm and the long-term from a Harley-Davidson perspective uh as we look we recognize that there are unique trade packs that are in place uh that that certainly provide some
▶ 1:39:05benefit to those who manufacture uh within that region uh many of our competitor Brands uh have plants in Thailand uh that certainly ensure low low tariff uh access to those aan markets uh many Asian Nations trade agreements allow exports from Thailand into those markets duty-free and that does provide certainly a significant Advantage for them and a disadvantage for direct exports
▶ 1:39:36from the US into those markets uh we obviously do ask for again a Level Playing Field that gives American workers the ability to export their products with equal treatment thank you and as we engage in these important trade negotiations it's important that we work to strengthen the emerging SEC sectors of our economy particularly in the Digital Services economy president Trump and my colleagues on both sides of the aisle are keenly aware of
▶ 1:40:06the unfair treatment the United States technology companies are facing by even our closest allies including Canada and South Korea it's pertinent that we put a stop to this and to ensure that our future agreements adequately protect us companies from harmful policies Miss Bliss what Provisions should we include in our future trade agreements to make sure that our digital and service companies are adequately shielded from unfair
▶ 1:40:38treatment thank you Congressman uh woman Miller um I agree with you it's a very very serious problem and I I think first and foremost data flows underpin All Digital and service is virtually all services trade so I would say that that is one very key element we need to see in all of our trade agreements secondly we need to see a Prohibition on data localization which often is coupled with restrictions
▶ 1:41:08on data flows and third and perhaps most importantly we need to see a strong non-discrimination provision which really goes to the core of your question um and whether you're looking at India and the case of the India Pacific or you're looking at Korea one of our closest allies um I think a having a strong non-discrimination provision is absolutely essential that we include in our agreements
▶ 1:41:39um and particularly in Korea where we're facing legislative proposals regulatory proposals for discriminatory online regulation um I think it's essential that that happened there and also also that we're frankly facing both in Korea and China harassment of us firms through Regulatory and unfair Regulatory and enforcement actions so I would say those three Provisions are probably very
▶ 1:42:09very key in terms of negotiating and resolving those issues thank you so much we've used up our time thank you thank you I now recognize Miss D Benny for five minutes thank you Mr chairman I want to thank all of you for being with us uh today um as I said during our last trade hearing Republicans on this committee need to speak up and work with us to support congress's Authority on trade and taxes um right now president Trump
▶ 1:42:39is attempting to impose the largest tax increase in over 30 years on the American people through various tariff hikes which consumers ultimately pay for without a vote in Congress in fact Republicans snuck a hidden Vision into the vote schedule two weeks ago that effectively surrendered congress's role in setting taxes and tariffs on the American people to Trump and this made it so House Republicans didn't have to vote directly on whether to keep Trump's tariffs on Canada and Mexico
▶ 1:43:09in place and he was only able to impose these tariffs by trying to declare National emergencies including against Canada for its role in the fentel crisis even though we know that fenel from our nor northern border accounts for only 2% of total seizures by the border patrol and this also happened the same day that Trump levied huge new tariffs on steel and aluminum on countries including our closest allies like Canada which are already
▶ 1:43:39driving up the cost of building cars planes and new homes and let's talk a little bit more about Canada for a second I have a question for any of my Republican colleagues some of who I've worked with closely over the past decade do you think it's okay that Trump and some of your colleagues disrespect and belittle Canadians by calling their leader a governor and referring to their country as the 51st state do you think it's a joke my constituent is in Washington certainly don't think it's
▶ 1:44:09funny um and right now Trump is turning our allies into enemies Canadians are boycotting American products at grocery stores and retail stores and according to the latest Federal figures half a million fewer Canadian cross the land B border into the United States in February compared to last year in fact that's the lowest it's been since Co era testing and quarantine rules were in place and many Canadians don't want to fly here either Mr chairman I'd like to enter into the record and article
▶ 1:44:40published in the hill which highlights that Canadian airlines are canceling flights to Tennessee and reducing flights to Arizona Florida and Las Vegas without objection so order um this is already having a big negative impact on Canadian tourism um which generates over $20 billion and supports over 100,000 jobs across the United States and what's the goal um Trump's tariffs plan are full of holes he says they're a negotiating tactic but you know what are we
▶ 1:45:10trying to negotiate whatever Trump thinks is unfair none of our allies have Clarity um Americans don't have Clarity and if the tariffs are for negotiating leverage then they won't end up raising any Revenue when he removes them but the Republican plan is to pay for extending trillions of dollars in tax cuts by raising revenue with tariffs so Republicans want to pass big tax cuts which mostly benefit the wealthy pay for a small portion of those tax cuts by gutting
▶ 1:45:40health care and food support for low-income people who use Medicaid and snap and then balloon are already 36 trillion dollar deficit because the supposed tariffs won't actually be in place for enough time to raise any or if the tariffs are permanent then all Americans are forced to pay higher prices on goods and the retaliation against our businesses and Farmers becomes even more devastating these are concerns that should be bipartisan and could be worked through if we had a deliberative process
▶ 1:46:11that involved Congress and um Miss Clawson uh do you agree that the constitution gives Congress not the Executive Branch the power to regulate foreign Commerce and impose taxes and tariffs yes thank you so um Washington State's economy is extremely relyant on trade um and selling our products to customers around the world so I want to see the United States get back in negotiating real trade agreements that go through Congress but at the same time I'm concerned about giving even more power to a president
▶ 1:46:41at a time when he is abusing the current limited authorities that Congress has given him and I also wonder what the point of entering into trade agreements is like we did with bipartisan USMC a if Trump can blow up the deal by imposing sweeping tariffs on Canada and Mexico so miss Clawson I wondered what guard rails can Congress put into future trade promotion Authority or trade deal implementation laws to ensure that a president can't effectively destroy trade deals by imposing tariffs without
▶ 1:47:11the consent of Congress very briefly thank you congresswoman there are a number of approaches that the subcommittee could consider I would submit that it may wish to consider both existing author authorities as well as future authorities and the ways they interact interestingly trade promotion Authority evolved since 1974 in a way that Congress added more procedural protections more oversight while Congress didn't take the same approach in the Tariff raising delegations so taking a look at them
▶ 1:47:41together makes good sense I think to ensure productive Cooperative coherent trade policy thank you thank you I yelled back thank you I now recognize Mr smucker for five minutes thank you Mr chairman for holding this hearing thank you to the witnesses for uh sharing your testimony today uh I think one of the highlights and one of the lasting impacts of uh Trump's first term uh were his efforts to rebalance global trade while the United States has historically been uh very generous in letting
▶ 1:48:12foreign products into our markets American Producers have not always received the same similar treatment in other countries instead us products have faced exorb tariff rates and unfair discrimination sometimes by even some of our closest allies and as I said in these first term president Trump uh conducted trade negotiations that meaningfully opened foreign markets and resulted in real successes uh such as the usmca the
▶ 1:48:42US uh Japan trade agreement and others and through the America First Trade policy presidential memorandum uh the president has communicated that he intends to do the same during the next four years and I would say that Republicans on the Ways and Means Committee stand ready to work with President Trump to shape these new trade agreements ensuring that American Products workers and industries are treated fairly around the world in fact Congress
▶ 1:49:12plays an important role in ensuring that American manufacturers aren't targeted in global trade disputes as we've seen all too often with Harley-Davidson for example Le and I'm very pleased to have uh you with us here today Mr Root Harley um has a significant presence in York Pennsylvania which is one of the counties that I represent in my district you have uh 1300 employees working there I've been to the plant uh several times
▶ 1:49:42uh three assembly lines friends of mine uh who work there and they're crafting 33 different models of motorcycles and we appreciate the commit M to uh our region and the job creation there and as you outlined in your testimony as an iconic American company Harley-Davidson motorcycles are often targeted by Foreign tariff regimes so-called luxury taxes and other non-tariff barriers so
▶ 1:50:13um Mr Root um you know if you had a magic wand what what policy Solutions what trade measures would you recommend or would you implement or would recommend that Congress pursue to help level the playing field for Harley-Davidson and for other Us exporters in foreign markets thank you Congressman smucker uh as as we look we certainly believe that any Trade Agreement must have enforcements and reciprocal duties
▶ 1:50:43minimize non-tariff barriers things like excise taxes luxury taxes that we've talked about and enforce country of origin requirements uh we certainly aren't asking for protectionism but fairness thank you can you outline some of the most significant uh tariff barriers that you face in key markets like the EU and in India certainly maybe also how how they how that affects your uh bottom line and how that affects
▶ 1:51:13your operations uh certainly so some of the things that we've talked about our our very high tariff treatment in in select markets in terms of products that we export from the US that includes the 100% tariff we talked about in India it includes the 6% which could go to 56% from an EU perspective we talked about the the situation in Denmark and some of the luxury taxes that get passed along so many elements for us to think about in addition
▶ 1:51:43there are a number of non-tariff barriers that countries place on our products uh these include special licensing requirements for certain size motorcycles so there are a number of very obvious ways that that we feel uh we are certainly targeted and then there are some elements that are a bit more creative well a as a member of the US UK uh interparliamentary group you know there's so much that we could do to be working together and improve
▶ 1:52:14uh our economic partnership um and I hope that we get to that with the Trump Administration certainly we didn't see that uh with the Biden Administration and so we're hopeful that we see those kind of negotiations uh take place um manufacturing is one of the top uh Industries in my district most of it uh focus on agriculture which is also a top industry and uh although it may not be top of- mind digital trade is integral to this type of production with traditional Industries like manufacturing
▶ 1:52:44receiving 75% of the value added by data flows Miss Bliss can you explain how uh digital trade rules in trade agreements enhance manufacturing and enable us to make more things in America your microphone isn't on but the time is limited thank you for that question just very quickly um it's absolutely essential um because as in the case of most sectors in the economy they increasingly are
▶ 1:53:14digitized and what that means is a combination of services and digital Technologies so for manufacturing it's everything from design and research at the front end to robotics on the factory floor and Big Data flows and Analysis to insertion of chips in the equipment itself to ensure its safety and operation to after Sales and Service Transportation financing thank you uh thank you Mr chairman thank you and now uh we will go as is typical at a 2 to one and so I'll now
▶ 1:53:44recognize Mr Murphy and then Mr doggo will be recognized after that thank you Mr chairman um thank you all for the witnesses for coming today we're obviously in different times when it comes to uh trade in our country sadly enough I think the Band-Aid fortunately rather has been ripped off of what have been predatory practices um from some of our partners but a lot of our adversaries um unfortunately uh little progress if any was made during the last Administration we would have uh
▶ 1:54:14meetings in here and literally nothing was being done uh thankfully we have a president in new office who understands the trade barriers that this has faced both from countries like India from China and even from of our friends in Europe North Carolina's third congressional district which I am blessed to represent is a host to a variety of industries that are affected by uh by trade first I talked about the agricultural um trade North Carolina third is the fourth largest
▶ 1:54:44hog District we used to be the second I wonder what happened I think Randy Finster took off a little bit but that's a that's a little mut but you know we have thousands of jobs in eastn North Carolina in the hog industry um billions of dollars in economic industry however things that have happened to the hog industry prop 12 which was ped by California which I don't know understand why it was allowed to stand is almost like a uh non-tariff trade barrier that's affected American Industries and I'm sorry American
▶ 1:55:15poultry uh trying to push off some arbitrary phytosanitary regulations um soone on a different note with my colleague Randy fenstra I called on the US trade rep last session to take action on South Africa's trade barriers that were unfairly blocking American Port South Africa now is just one of the UN one of the many countries that unfairly targets the American pork producer in the first Trump Administration we saw usdr revoke eligibility of GSP products from Thailand
▶ 1:55:45as a result from their unfade uh Trade Practices against the American Port same thing with South Asia vietn Vietnam we want greater access uh Mr Kirkland can you discuss how we best given the world of Agriculture how we can better serve our farmers and our agricultural producers by negotiating trade agreements that address both tariff and non-tariff issues our farmers are hurting right now we need open we need access to a lot of
▶ 1:56:16markets yeah thank you um and that's correct uh like you mentioned and you uh I know you represent a lot of of the hog industry I can't speak to it directly but within the the beef industry I can talk with is all agriculture related so again 50% tariff in Thailand 30% in Vietnam 10% in Philippines 5% Indonesia those are those are those tariffs that are that are we know that they're there for protectionist
▶ 1:56:47um we know that they're there um to keep our beef out of their out of their country um um you know we we feel like there needs to be a pre free playing Ground there needs to be competition we need to open those those markets and uh it's going to become you know we I can't tell you exactly how it needs to be done but I I believe there needs to be new agreements and um like I said sometimes there's tariffs that that go along with it but that uh what I believe is there needs to be new
▶ 1:57:17agreements established and try to you know engage in those um ultimately China is about A2 billion market for the beef industry and um you know we don't want to completely uh they they've they've shut us off uh currently uh we're not exporting any beef to China and so I wish America just knew all this uh which they don't I mean people are busy in their lives they don't understand how we've been mistreated by the rest of the world so so let me let me move on on to that question I
▶ 1:57:47appreciate you know Mr rude I won't make you repeat this but we're harley-davison is doing the same facing the same things that so much of our boat industry in eastern North Carolina is facing as far as um challenges with getting out exports overseas one thing I would like to talk a little bit about is just uh the medical supply chain I want to ask I don't want to expend my time but we have a strangle hold um China has a strangle hold on us with with products for medical supplies that are crucial to this country I wonder Miss Broadband
▶ 1:58:17can you address how we can secure how we can do better secure our medical supply chain through trade negotiations you know which we need to onshore we need to Nearshore but how can we do this better trade thank you Dr Murphy um yeah I think it's a it's an important area which we have to look at closely uh there is the secure medical supply chain act I think that you maybe sponsored and it sets up a structure where we negotiate with countries so we have a sense of what kind of secure Supply
▶ 1:58:47you would have with them and you call them I think it's the trusted trade partner and you would have a special relationship you would look at regulations you'd look at sourcing you'd look at possibilities for near Shoring on Shoring but to sit down with countries that you could trust and work out how you could better guarantee to each other that you would have secure Supply in a a pandemic situation or some other crisis I think we've missed a great opportunity um in the last four years with doing Central America is trying to Nearshore
▶ 1:59:17it's a population that needs business um it keeps people at home and it was a great deficit that you know we we're talking about root causes of migration this is the number one one so thank you m Mr chairman I'll y back the gentleman yields uh Mr doet is now recognized for five thank you very much and I appreciate the hearing uh and the testimony of our Witnesses who offer insights on a number of long range problems but I'm amazed that we could be here at this point and not hear a word
▶ 1:59:48uh from our Republican colleagues or any of the witnesses they've summoned about Liber Liberation day we're only a week away from Liberation day the day that President Trump has told us will be liberated in the trade area and it would seem that while these long range problems are important that we would hear some justification some celebration or explanation of what this next important step in president Trump's trade War means and how it will liberate us of course Liberation day
▶ 2:00:18in the true Spirit of George arwell means just the opposite of the name uh as it was indicated when the spokeswoman for president Trump recently actually said from the White House Podium that tariffs are a tax cut uh to the amazement of all well tariff may be the most beautiful world in the dictionary to president Trump but his incompetent implementation of his trades policy is already hacking the prices that my
▶ 2:00:48constituents and yours are paying we know from the recent meeting of the Federal Reserve board that we're probably already paying higher interest rates for anyone who's buying a car uh a house or business inventory because uh interest rates are being kept higher with the uncertainties of the Trump Liberation day and the house Republican answer to all this of course is to wash their hands of any involvement and to surrender all of congress's authority to the
▶ 2:01:19president and to write into law that Congress can do nothing about the outrage that's about to occur now last week I talked to the representative a senior representative of foreign country that respectfully approached this month the Trump Administration to ask a simple question what can our country do to avoid these big tariff increases on the goods and services that we export to the United States is there anything we can do and they got a clear answer from the Trump Administration
▶ 2:01:49and a high official there and the answer was there's absolutely nothing you can do because president Trump is intent on imposing tariffs on almost every country in the world they did get one important piece of guidance and that was don't complain about it because if you complain about it it will upset president Trump and he'll just Spike the tariffs even higher in his trade war and we've certainly heard president Trump make contradictions great Again by attacking our most valued trading allies
▶ 2:02:20our allies uh in the world for democracy and freedom and playing nice with war criminals and thugs his is not just a tariff policy or a trade War it is a terrible policy it is part of an unnecessary trade war with Liberation day that won't liberate us but will liberate dollars from our pocketbooks as we have to pay more for foreign Goods uh this means a cost for virtually every American Consumer less well understood
▶ 2:02:50is the direct relation between this trade War and the 2017 Trump tax scam which Republicans are so eager to impose on us again that was a policy that rewarded companies for moving their factories abroad and one of the industries that took the Republicans up on this and the Trump tax scam and did it so well as always is the pharmaceutical industry they were so eager to exploit the new corporate tax giveaways that they moved offshore
▶ 2:03:21production for particularly to Ireland prior to the 2017 Trump tax scam we annually imported about $65 billion worth of drugs each year from Europe now we have $155 billion about A90 billion per year gain and what is the overall trade balance in or trade deficit in drugs with Europe well it's a deficit of about a 100 billion per year almost the same size as the 90 billion increase
▶ 2:03:51uh in the uh imported drugs from the Trump tax scam uh and the result of course is that Pharma in last year paid absolutely nothing in taxes and sought some tax refunds despite charging American consumers the highest prices in the world so my Texas constituents look forward to Liberation day knowing that they'll be paying more for goods in a war we cannot win American agriculture faces retaliatory
▶ 2:04:22measures just like during the first term when we had unjustified pain for agriculture uh I think we will see Liberation perhaps for big Pharma but only pain for American consumers and I yield back the gentleman yields uh I recognize myself for five minutes and I just want to say thank you so much to all of you for being here uh I represent New York's 24th congressional district it's an honor to represent that area this was the birth place of the Industrial Revolution along the Erie Canal Court uh I
▶ 2:04:52represent basically the shoreline of Lake Ontario all the way from the St Lawrence Seaway Westward to the niagar river so uh much of and for decades I should say for even more more than many decades us trade policy has allowed other countries to take advantage of our American farmers our workers our businesses all along this this corter with great repercussions it's hollowed out my region uh there are empty uh buildings empty facilities factories all across the region but some still do
▶ 2:05:22remain and uh under President Trump during his first term America America finally got back to fight against some of these horrendous policies that allowed foreign countries and foreign companies to take advantage of us and now uh have because of those efforts we've been able to lower some of the cost and able to bring some some of our our markets back here including um uh repatriating a lot of money repatriating a lot of our resources so I believe that any any of these current trade deals that we're dealing with
▶ 2:05:52today under President Trump need to give us expanded access uh especially for my district which by the way is the fifth largest Dairy District in the entire country and it is the largest agricultural District in the Northeast so expanding uh through the trade policy our access to foreign markets which some of my colleagues have referenced has been cut off for dairy for example uh for apples for obviously the beef we talked about beef earlier so I I applaud president Trump's efforts especially in the first term of trump trying to get China to
▶ 2:06:23purchase some of our agricultural products and continuing to try to make that happen and to make Market access a priority in when we when we craft these deals unfortunately many of these deals have not put America first and I think attempting to do that by bringing the balance of trade back to the United States and giving us an opportunity uh to have have our our goods and and uh so our Goods our agricultural Goods of all kinds sold on the open market are important so my first question uh is going to be to Mr Kirkland and uh you know many
▶ 2:06:53of these po policy makers argue that the trade deals haven't benefited Rural America you Des described in your in your testimony that the beef industry relies on exports from your perspective uh and I know you've touched on this what should us trade negotiators keep in mind when they put the deals together and what do you think about the concept of universal tariffs or Universal uh trade okay thank you and uh and I agree with you uh when you when
▶ 2:07:23you talk about balance trading I agree 100% And so some countries um have identified unit United States agriculture as a target for retali retaliation we've seen that um that's not ideal for farmers and Ranchers but it's also bad for Global consumers so those consumers that are buying our Goods as well however tariffs Can Be an Effective tool U we've seen that we've seen it resolves serious problems and massive trade barriers and we'll work with Congress and and the president to
▶ 2:07:53accomplish those goals and so we understand those things we understand there may be some headwinds but uh we're we're we're there ready to to to to dig in and get after it well thank you so much I appreciate that uh Mr Root uh I discussed with your CEO last year uh long been a fan of Harley-Davidson I own a Harley-Davidson I have a softtail deluxe which I love uh I've test driven just about every other one but I keep staying with the same one just uh it's an amazing opportunity I love how you described it you know it's got a great reputation
▶ 2:08:23and uh people around the world do want to drive hly David I was kind of stunned at the numbers you put out on uh the the import uh penalties trades Vats everything just to prevent Harley-Davidson's been from being sold around the world in fact I have some European friends who come to the United States just so they can take a Harley-Davidson across the United States but um we I just talked about this I briefly with Mr Kirkland and I'm just wondering on your from what can you outlin some of the things we could do do but what do you think we can do with a universal
▶ 2:08:54Baseline tariff in terms of dealing with is it Universal Baseline tariff do we need reciprocal trade free trade agreements how do we make it uh fair and a lot of you know obviously there are a lot of Europeans and people around the world as you say in Thailand and other places that want to drive a Harley-Davidson it's a unique ride how do we do that and what do you recommend is the best way to do that uh congresswoman Tenny thank you for your support of Harley-Davidson thank you for uh enjoying riding your softtail deluxe uh as we as we certainly look at trade we believe
▶ 2:09:24that the the best thing is is fair trade uh from our perspective as we think about what that means uh that would mean that we are we are enjoying uh treatment uh moving into a country equivalent to what what other countries uh enjoy when they bring products into the us we talked through the fact that tariffs in terms of uh motorcycles being imported into the US have a zero 2.4% import tariff we would ask
▶ 2:09:54for reciprocity thank you very much I'm out of time but I really appreciate uh all the witnesses sorry I didn't get to everyone uh I now recognize Miss vany for five minutes thank you very much and thank you for our Witnesses for being here today as we work with the Trump Administration to conduct a comprehensive review of America's trade policy we must ensure that our trade engagements put America workers and Farmers manufacturers and energy producers first for far toon our competitors and especially our adversaries
▶ 2:10:25have taken advantage of us markets while our businesses face unfair barriers abroad we've heard it all across the country the days of passive trade policy are over and I am committed to working with the Trump Administration to expand market access and to ensure that American farmers and small businesses get access to markets and opportunities they deserve and that being said securing New Market access is only part of the equation and I'm continuing to emphasize that we must also hold our trade Partners accountable Mexico
▶ 2:10:55and Canada must stand with us in confronting China's unfair Trade Practices particularly the flooding of subsidized Goods into our markets and as we approach the usmca review we must ensure that we are fully enforcing their commitments to not allow China to exploit loopholes at our expense we know trade agreements are only as good as their enforcement in Mexico and Canada must be full Partners in preventing Beijing from exploiting North America as a back door into US markets the usmca was a hardfought
▶ 2:11:26win for American workers but we cannot allow China to circumvent tariffs and restrictions by shipping Goods through our neighbors we need strict enforcement measures to prevent this type of manipulation and ensure that Mexico and Canada fully uphold their obligations under their agreement additionally Mexico must return the land of Vulcan Materials that is wrongfully ex appropriated and commit to upholding its part of a Mexican water treaty that is especially important in Texas
▶ 2:11:56China Remains the greatest long-term threat to fair trade and American Economic Security and as we consider new trade agreements this Congress we will address China's Market manipulation dumping of Steel and aluminum Force technology transfers and IP theft to protect American e economic interests both home and abroad trade must be free but also fair and fully enforced we must secure better trade hold Bad actors accountable and protect American Industries from unfair competition
▶ 2:12:27Mr Mr Kirkland I know that uh uh congresswoman Tenny had asked you a similar question but I don't know that I got the answer that I was looking for specifically uh in your testimony that you had discussed interest in expanding trade in Southeast Asia uh specifically in Vietnam and in Thailand can you help explain how these trade agreements with these two countries would benefit us cattle producers yes thank you and um so
▶ 2:12:57and I kind of I kind of talked about the the trade with with China and that's what you were talking about is our our Reliance or not really Reliance but our our heavy trade with China is you know being two billion dollar market uh for the beef industry with the with the large tariffs from Vietnam and Thailand um we appreciate everything that that the Trump Administration did in the first is first term to to get China open but at the end of the day we've got Australia New Zealand and Canada that have zero
▶ 2:13:28tariffs for all these countries that we have tariffs against that that have tariffs against us and so uh we need to we we don't need to depend on China to be our main source of of beef exports that's in my opinion um we need non- science-based restrictions and um and and basically a competitive trade um that uh platform that we can that we can stand on and continue to uh move our product to those other countries
▶ 2:13:58uh in the in the south Asia area thank you miss brodman you have a lot of experience in this um can you talk about how we can improve our trade deals with countries like Mexico that have posed challenges in the past and have basically completely ignored um many of the regulations they agree to under the yeah I mean I think the the review of the usmca agreement that's coming up the committee is starting to think about it now
▶ 2:14:29and I think we just have to I can't hear you pay very close attention to the letter and the law of the agreement and are there things that you think that we could put into it to make it stronger that would actually give it teeth uh I guess I would assume there are I can't think of what exactly you want right now I mean is it a dispute settlement enforcement or ways that we've seen them abuse it in the last four years sorry we've seen them abuse it in the last four years are there things that we could have included in the usmca
▶ 2:14:59that we should look at in the review that would actually make that enforcement easier I mean I think CH Mexico and the US are engaged in pretty tough talks right now given the threats of the tariffs and so forth and I think let's wait and see how that plays out and use the review to look at rules of origin and agreements that we can areas where we can approve the agreement because we know where the problems are now that we didn't know when it was implemented excellent thank you Nel be uh representative Bon I excuse
▶ 2:15:29me buyer is recognized chairman Murphy thank you very much and thank all of you for hanging with us this afternoon we're having this hearing a week before what Donald Trump has called taken a calling Liberation day and frankly that adds a bit of absurdity to this exercise we're discussing new notional trade agreements while the president is busy tearing up the last one he negotiated you know I'm very interested in the possibilities of free trade agreements with the United Kingdom with Switzerland but it's hard to imagine an
▶ 2:15:59FTA in the present context on April 2nd the president's promised to late T tariffs in some form and some amount based on some invented but yet to be revealed metrics on an unknown list of countries relying on dubious Authority we are told that these tariffs will remedy all manner of slights real or imagined countries around the world in business businesses around the country are scrambling to understand the Maga astrology that these supposedly reciprocal tariffs will be based investment
▶ 2:16:29is on pause your 401k is down and uncertainty is up this opacity might be less dangerous if the president wasn't simultaneously promoting his crypto token a historic platform for industrialized bribery and in depending on what you want to buy your paycheck won't stretch as far because Howard lutnick has felt disrespected by some prime Minister somewhere your life will be more expensive to protect the president's feelings does that feel like Liberation to you in the past two months
▶ 2:17:00on on andof trade war against Canada given us the perfect distillation of The Emptiness and absurdity of the administration's trade policy The Wall Street Journal called it the dumbest trade war in history when they're right they're right we've heard 17 different pretexts for the necessity of aggressive tariffs that will raise costs destroy integrated suppli chains and turn friends into enemies the only the only one the president will stick to is his desire to take to turn a proud and friendly nation of 40
▶ 2:17:30million people who can't stand him into the 51st state you want to hear a lot of that from my Republican friends because they know how utterly stupid that sounds and you won't sound any smarter explaining to your constituents that the price of medicine just went up because Denmark refused to sell this Greenland for Trump coins are there irritants in the US Canada trade relationship sure but this is blowing off your toe to cure a hangnail it's burning our manufacturing base in order to save it and this has been so successful
▶ 2:18:00the president now wants to do a world tour with American consumers footing the bill this committee should be leading the charge to reassert Congressional trade Authority we should be working together to protect the economy from an ideological and emotional tariff program that will make us poorer and kill more jobs than it saves Dr Clawson it seems to me the objective of the American First Trade agenda or our cross purposes nowhere is this more glaring than the emphasis on tariffs as a revenue Source uh at the same time using tariffs
▶ 2:18:30to secure Market access abroad and your view would replacing your current tax base with significant tariffs con strain the ability of our trade negotiators to make deals lest they blow a hole in the deficit thank you Congressman um I I would say in response to that that uh you've highlighted how delegations are extremely expansive and and most of these three-digit statutes as we call them they have these go by these three-digit numbers uh they're they come from a
▶ 2:19:00time of they were negotiated they were um uh completed during the Cold War and reflected the state of play of the global economy at that time so I think it makes sense as as you've suggested that Congress would want to re-evaluate that trade toolkit 50 years on given the current circumstances just as it has done on many occasions before now Dr class and various Administration officials seem to have a conception of reciprocal terorists that would include the national value added tax of the Vats even though these taxes apply to domestic goods
▶ 2:19:30and services as well as Imports and in M countries are the largest component of the tax base does this make sense to you I can't speak to that directly at this time representative but I would leave it to our economists Economist expert to to guide us through that policy analysis okay Miss Bliss I've had lots of meetings with service EXP BS whove raised all sorts of Trad erit in countries where they do business but I can't recall them ever citing a vat as somehow discriminatory against American companies is this something
▶ 2:20:01that you've been hearing from your membership thank you Congressman buer um in the in specific context yes and the context I will mention is Mexico and there's a very serious concern that Mexico is making an interpretation of its vat that would impose Russ retroactively back to 2014 bat taxes on insurance companies and and that is a really serious concern so I would say conceptually
▶ 2:20:31the notion of a vat no if it's non-discriminatory um however um depending on how it's administered and I would use Mexico as an an egregious example that is a problem also with respect to Europe there is concern about how the vat is imposed and whether it's imposed on a Level Playing Feld field so again I would say conceptually a that in and of itself may not be a bad thing it depends on how it's administered and I would say Mexico is the most urgent issue we need to
▶ 2:21:01deal with great thank you very much and Mr chair yield back gentleman yields back I now recognize Mr Moore for five minutes thank you chairman um Mr Kirkland uh president Trump has indicated his interest in making a trade deal with United Kingdom which poses a unique opportunity for the Utah beef and cattle industry Utah exported near exported nearly $86 million of beef in 2022 and 79% of our 17,000 plus farms and ranches are owned by individuals
▶ 2:21:31or single families my question is this we know the British consumers love beef but the US beef is highly restricted due to quota rates and tariffs which are largely left over from their days in the European Union I'm also aware the US and UK made it through five rounds of negotiations on a trade deal in early 2020 during Trump's first admin ministration but that but that agriculture was never addressed due to the sensitivity of the issue I get that it might continually be a sensitive issue but what opportunities do you see for us beef exports in a trade agreement with
▶ 2:22:01the UK thank you con Congressman for the question um yeah and so I I would say I mean British consumers we we've seen they love they love us beef um it's high and it is highly restrictive due to small quotas and tariffs um so we see I I see very similar as you do that we see that there's opportunity there with the change of UK leaving the EU that there are going to be opportunities
▶ 2:22:32um there are barriers uh already in place now what we believe is we have to to to push for science-based um trade I mean at the end of the day that's that's that's the barrier it's non non-tariff barriers that are non science-based we believe they need to be science-based and that we believe there's a great opportunity there for for extended trade and and a new deals with uh with the UK absolutely um our two countries actually share many values
▶ 2:23:02and standards when it comes to raising cattle and um and and I'm hopeful because this is a difficult topic this is this the whole concept of of tariffs and the current trade situation it's it's not easy for for for um anybody particularly this on the trade committee on the trade but we do need points of Leverage we do need points of of uh of negotiation to be able to take place or we will get taken advantage and this in our agriculture industry needs this I mean this is the the fundamental
▶ 2:23:32problem with us usmca so many positives but Canada and with respect to to to Dairy has has not lived up to their end of the bargain and so we need to be able to to go through this difficult time it's tough uh and will continue to be very difficult but we've got to be able to find Opportunities like this thank you Mr Kirkland U Mr Root one of the things that I'm hearing from Utah businesses over and over again is that trade is not just about tariffs and revenue margins it's also it's also a tool that we can rejuvenate us manufacturing and encourage companies to reshore their businesses
▶ 2:24:02to the United States in the long run it's going to be impossible for American companies to come back if they don't have good access to the intermediate products and inputs that they need to make things domestically my question is simple how can us trade negotiations support reshoring efforts and ensure American manufacturers remain competitive any rules in particular that we need to be writing to to be able to this uh thank you Congressman Moore so as as we've talked about we actually believe that that fair trade
▶ 2:24:33uh revolves around a policy in which there is a a fair and equal tariff rather than an imbalance in tariffs uh we believe that Harley-Davidson has actually highlighted that you can produce in the US and you can Source from the US uh as we go through and we take a look 95% of what we sell in the US is produced in the United States we do that with a very very heavy sourcing uh within the United States for our parts and components with
▶ 2:25:0370 to 80% of what we actually put into our motorcycles produced from within the United States uh so from our perspective uh in order to answer your question uh we do believe that it really is a matter of of fairness in tariffs and ensuring that we're not in a position where people who who bring products into the us or export to the US have a policy where they actually have 0 to 2.4% tariffs whereas
▶ 2:25:33we end up paying significantly higher levels than that outside of the US thank you I won't miss Brin I won't be able to get into the broad implications of us Taiwan exports I should have never left 30 seconds for that uh but thank you for your work on understanding of this um and positives moving forward with Taiwan but they face you know uh an enormous amount of potential coercion from uh in the South South South China Sea and their part and their neighbors there and we've we we've got to be able to navigate this in a positive way so
▶ 2:26:04with that I won't ask any questions on that and thank you for your work and I yeld back thank you and now recognize Mr stubie for five minutes thank you Mr chairman after four years of weakness and absence it is great to know that America is back on the world stage president Trump is enacting a robust trade agenda one that actually advances is the interest of our country we cannot allow other countries to undermine our domestic Industries or our allies are on notice that we will not let them rip us off or discriminate against American Products uh Mr Kirkland I'll start with you I know that one of
▶ 2:26:34the biggest priorities for us cattle producers is holding Brazil and Paraguay accountable these are countries with a history of foot and mouth disease and they were granted beef access to the US under Highly Questionable conditions we need the administration to hold them accountable and protect the safety of us consumers and the US cattle herd uh Brazil and Paraguay were recently given access to the US market despite strong opposition from us cattle producers should we trust beef imports from Brazil and Paraguay and other countries with a history of foot and mouth
▶ 2:27:04disease thank you Cong Congressman sty um and so uh I'll just start by saying you know I've talked about competition uh throughout the day and this is not about competition what we're talking about here this is about safety for our for our herd and safety for our consumers and so we we know that uh Brazil and Paraguay have had a um outbreaks of foot and mouth disease and it's danger for the dangerous for the animal disease and would be devastating to our
▶ 2:27:35our livestock herd in the United States um so if you kind of go back in in both instances um USA secretary uh vilsack denied our request to suspend access and conduct new audit on Brazil and Paraguay to confirm their claims so basically we've got to go back and set back where we where we've been and we've got to go back and do Audits and look and see where we're at there and stop uh and and stop the
▶ 2:28:05suspend access to Brazil and and Paraguay into our our markets today so um I think I think it's uh every sector of our uh of the beef industry agrees thank you uh Miss Broadbent uh president Trump has discussed the need for improved bilateral relationships with the United Kingdom and their prime minister seems like one of the few sensible world leaders working with the president can you provide more details on how a US UK tra Trade Agreement could improve bilateral regulatory
▶ 2:28:37cooperation thank you Mr subie for that question yeah I I think it's a huge opportunity uh to to kind of tack UK back a bit from Brussels heavy-handed type of Regulation which is not science-based not mutual recognition and Brussels seeks to harmonize everybody with Brussels regulations so to sell in Europe they demand that you follow their their regulations to the law rather than having your own standards that they could recognize
▶ 2:29:07and I think the UK would be a good partner to talk to about this we we spent a long time negotiating with Europe under the uh the trans-pacific partnership I mean the ttip negotiations and came to any result that would open markets for US exports of beef there so we need to try it with the UK it may be a sensitive issue in the UK but I think we've got smart people that can figure out regulations so that we both feel assured with the safety of the food that we're getting which sectors do you believe
▶ 2:29:37would benefit the most from that type of collaboration I think all sectors Manufacturing Services uh and agriculture because it is it's a uh an overall approach to regulation that goes across the economy that that the UK took on board when they joined the European community so to the extent that they can relook at some of these regulations and with an eye towards increasing access for US exports I think it's very valuable and it will
▶ 2:30:07be it will be valuable for them because it will have less of of the Brussels stamp on it Miss Bliss uh you advocate for using the US mca's digital and financial services disciplines as a model for future agreement ments what specific elements of usmca do you believe are most essential to replicate and improve upon when negotiating with other nations um and I and I would use the term building block um because I think there are other things
▶ 2:30:37that can be added but I think primarily the crossb data flows data Lo data localization prohibition non-discriminatory treatment of digital content the cyber security provisions the permanent moratorium on e-commerce duties just to name a few I think we also need to need to add a provision on use of non-discriminatory services standards particularly for Digital Services standards in Services I think largely the disciplines in usmca
▶ 2:31:08are quite good uh including for areas like generally crossborder delivery of services but also things like Logistics and other areas um Financial Services is another area area that's very important certainly in electronic payment services but rid large in the financial services space um so I I would say that all of those are very very good building blocks to start on my time's expired thank you all for being here today thank you I now recognize Miss suul for five minutes thank
▶ 2:31:38you Mr chairman I want to thank our Witnesses for joining us today I'm sure that you're all very busy uh as you try to navigate the chaotic trade policy that's coming from the White House I represent a trade dependent State the state of Alabama and right now alabamians are hurting last year Alabama exported over 26.8 billion dollar in Goods which supports over 990,000 jobs in my state but many of those jobs are now at risk my constituents are scared
▶ 2:32:08and confused they don't understand why this President is attacking our allies and starting trade Wars which will devastate exporters and raise costs for workingclass alabamians Trump's billionaire friends can survive a downturn in the stock market but I can tell you that the people that I represent the thousands of people that I represent are hardworking alabamians who cannot cannot withstand uh such a reckless trade War therefore while I am a supporter of opening markets for Alabama exports I have serious reservations
▶ 2:32:39about giving this President any additional trade Authority that he could use to destabilize our economy uh Miss Clawson um Alabama's farmers and manufacturers would love to have access to New Markets to sell Alabama products and services however it is hard for them to focus on expanding into new markets when their current exports are so uncertain our two largest exporting uh markets are Canada and Mexico but the markets access but that market access is being threatened
▶ 2:33:09by trade Wars um why should Alabama farmers and manufacturers be optimistic about potential new trade agreements if president Trump could turn around and sabotage that by using the international emergency Powers Act to invoke um tariffs or or through other actions thank you congresswoman uh I think you again your question uh puts a finer point on on the differences between the way that the statutes are set up those that
▶ 2:33:39allow the president to raise tariffs for limited purposes under National Security for a limited time and those limited purposes yes and those that allow him to negotiate tariffs down and so for many years that bifurcation as I said earlier the the those that have based on raising that those allow him to raise tariffs have gone unchecked while those allow him to lower tariffs Congress has actually put more uh restrictions on your engagement between the two branches on those issues absolutely you know Article 1 Section 8 of The Constitution plainly states that Congress
▶ 2:34:10has the power to regulate trade uh it is clear that President Trump lacks the authority to enter into binding trade agreements without Congress granting trade promotion Authority um does President Trump currently have trade promotion Authority Miss cson no he does not if Congress doesn't give Trump this uh Authority how do you suppose the president would Dodge Congress and bypass the Constitution when we look back at the trade executive agreements that have been concluded over
▶ 2:34:40the last several decades in in those instances when challenged the executive branch has said the basis for some of those uh for some of those agreements have been a variety of different things most importantly uh Us's we call organic statute the statute that sets up Us in the first place but if you look closely at that statute it doesn't actually give USR negotiating Authority uh rather it sort of sets up that USR is some an entity that should report both to the president
▶ 2:35:10and to Congress so there's been a discrepancy between what the executive branch has reported out as the authorization and what statutes actually say on the books well do you expect that uh potential agreements uh with India or with the UK or Kenya would be many or phased in like uh Japan and would that have that kind authority well I can't speak to what their plans are specifically with with respect to those countries but I encourage the subcommittee to set up a framework through which the branches
▶ 2:35:40can work together with respect to those countries or any others absolutely you know as president uh Trump continues to defy the rule of law and erode the separation of power what can Congress do in the trade space uh to reclaim authorities provided to us in the Constitution for example should we consider reforming the international uh emergency economic Powers Act or section 338 of the trade act um any suggestions as to how we can reclaim the authority that is so
▶ 2:36:11uh that's so blatantly given to us by the Constitution so there's a broad menu that would take us more than the remaining 30 seconds to to discuss whether it's uh revising on the agreement side a fast track uh whether it's uh adding more publishing and Reporting requirements uh bringing back tariff decision-making to the Congress narrowing justifications the executive can rely on bottom line as you pointed out congresswoman Congress has the power to regulate commerce with foreign Nations and so it has the right to choose the instrument
▶ 2:36:41through which the executive carries out that work thank you I Y back the balance of my time thank you I now recognize Mr Estus for five minutes well thank you Mr chairman for the opportunity to join the trade subcommittee today and thank you for all our Witnesses for joining us the district I represent is a cross-section of the United States there are rural farmers and ranchers working to feed clothe and provide energy for the entire world they're skilled workers manufacturing airplanes and Aerospace components
▶ 2:37:11and workers developing and building computer instruments that power our devices and all of these industries benefit from free and fair trade when the United States has a Level Playing Field field kons do better unfortunately unfair treatment by foreign countries and a lack of urgency to advance trade by the Biden Administration has harmed our country there's no question that countries like China have been cheating the CCP not holding to its trade promises shouldn't shock anyone they've been doing it for 70 years
▶ 2:37:41other countries have piled on extra EXT territorial taxes and tariffs on the United States and gotten away with it all of this puts our American manufacturers and producers at a disadvantage but the Biden Administration was absent in enforcing the good policies of the usmca the US Japan trade agreement and the China Phase 1 agreement additionally there was virtually no movement on expanding markets in the past four years or pushing back on discriminatory tariffs the M the momentum that was built in the first
▶ 2:38:11Trump Administration came to a grinding Hal now we need to reverse the stagnation and deliver free and fair trade policies to encourage economic growth and open markets for our producers and manufacturers There's an opportunity to capitalize on the Biden Administration T stalled trade agreement with UK and Kenya president Trump has shown that he will use every tool available to provide long-term economic opportunities just a threat of tariffs has brought some of our allies to the negotiating table and also spurred new investments in our country and
▶ 2:38:41I'll ride my colleagues that tariffs were first used in the Trump Administration uh but inflation remained low and then President Biden kept many of those in place we can all agree that the United States will benefit from Return to stability and certainty in the marketplace but first we need to level the plane field and ensure that foreign countries in their discriminatory tariffs and taxes that are a burden on our economy I'm pleased to see that just today India has announced the repeal of its Equalization Levy which is a form of Digital Services taxes
▶ 2:39:12that India first imposed in 2016 this Equalization Levy focused on online advertising and like other types of Digital Services taxes that trading partners around the world have imposed in recent years it was always designed to Target American companies uh chairman Smith with your permission I'd like to submit an article uh uh communicating this announcement uh from India for the record without objection so ordered Miss Bliss do you have any perspective on either uh India's Equalization Levy specifically
▶ 2:39:42or the importance of addressing digital uh taxes that discriminate against us companies around the world thank you co Congressman eses um yes uh and certainly the elimination of discriminatory dsts are a priority for my members um and respect to India's action I think it's a very positive announcement that was made by the Finance Minister with respect to the 6% lean advertising activities um and it comes
▶ 2:40:13after the uh announcement that the Indians made last year in August that they would eliminate their 2 % Levy um on online services so I think that's a very very pos positive step in the in the right direction um more generally uh unfortunately we still have a huge problem with dsts and I would point to Canada uh with its 3% tax on revenue from certain Digital Services and the fact that that would be applied retroactively
▶ 2:40:43I think it's a huge problem uh it would be a major cost to uh us companies that affected um so that remains a serious problem I also think it remains a serious problem in Europe with the failure of pillar one in the beeps negotiations you have roughly half of the European members um European nations that are members of the oecd either talking about or having in place dsts so um yes congressmen we absolutely agree
▶ 2:41:13that it's it's a major problem and one that absolutely needs to be addressed um in uh in terms of our negotiating priorities oh thank you for that and and I I just want to make a comment I don't really have a question but Mr Root when you were when you were talking you gave some specific examples of unfair tariffs that were placed on your company's products and I I think it's important for us in a hearing like this that uh we get that information out that so that all my colleagues are aware um that U we we we should not acknowledge
▶ 2:41:44that punitive tariffs are already targeting American companies and we need to focus on having Administration in place that actually focus on how we how we benefit American companies do that so thank you for bringing that up and Mr chairman I you back thank you I now recognize Mr Davis for five minutes Mr chairman ranking member Sanchez thank you for convening today's hearings on America's trade agenda and priorities which is of great importance to our nation
▶ 2:42:14and while we may not agree on many things around here today today one thing I think we all should and could agree on is that a robust trade policy is essential to maintaining productivity and growth across all economies be it international national state-based or local for my home state of illino our major
▶ 2:42:45trade Partners happens to be Canada China and Mexico so recent executive branch trade and tariff related actions targeting these three countries will ultimately have great impact on our businesses Farmers consumers and our overall economy to
▶ 2:43:15that end it is important that the executive Administration respect and recognize Congress has authority over trade agreements and its purpose is to guide and or direct the administration on the content of that agreement unfortunately what we have seen from the Trump musk Administration in the trade and tariff space
▶ 2:43:46over the past month has been anything but comprehensive well balanced and measured in fact the president's recent approach to advancing his America First Trade policy has been incons and even contradictory clearly the administration's
▶ 2:44:16halfhazard approach to America's foreign trade policy and enforcement efforts fall short of the robust and comprehensive policy with respect to working with Congress to Advance America's trade agenda and measured as we look at markets we certainly have not
▶ 2:44:47been protecting those tariffs are instruments usually used to address unfair Trade Practices like anti-dumping and duties where other countries are selling Goods at lower prices that hurt our Industries and workers so when Congress gives away its capacity to question and dialogue
▶ 2:45:17with the other branch we weaken our position and risk deals that don't reflect All American values or economic priorities Professor Clawson given your experience both in Academia and in government How concerned should we be that the trend toward executive only agreements combined with the hollowing
▶ 2:45:48out of K agencies under the current Administration could weaken our ability comprehensive enforcable trade deals especially those with strong labor and provisions and under what circumstances must foreign Commerce involve Congressional approval to ensure legitimacy enforceability
▶ 2:46:19ility and viability thank you Congressman uh the first thing I would say in response to your question is that the trade executive agreements uh not only have they uh for some time Fallen under the radar but because they haven't had the attention from Congress they've also sometimes Fallen under the table and that's not the situation that one wants to to be in second thing is in response to your
▶ 2:46:49point about uh having strong labor and environment protections uh as I mentioned earlier those are of course have been um most available and emphasized when uh we've been working with Congress when the executive branch worked together with Congress either under uh trade promotion Authority or or otherwise so so those are two reasons why it makes good sense for the branches to to work together uh in crafting new trade agreements going forward thank you very much thank you Mr chairman and I you back thank you I now recognize Mr yakum
▶ 2:47:19for 5 minutes thank you to our Witnesses for being here and Mr chairman thank you for holding this important hearing it's time for America to start negotiating trade deals again the Biden Administration began negotiations for an indopacific economic framework or ipf with 13 countries in the region but this trade pillar never got across the Finish Line Mr Kirkland you said in your testimony that American beef exports face a 30% tariff in Vietnam and a
▶ 2:47:4950% tariff in Thailand did the Biden administration's ipaf negotiations prioritizing prioritize lowering these tariffs yeah um to to answer your question very simply no it uh unfortunately the ipf agreement did never touch tariffs and tariffs were off the table entirely thank you and you also flagged that uh Australia as a country with uh non-tariff
▶ 2:48:19barriers for American beef exports did the Biden administration's ipf negotiations prioritize addressing these barriers to exports I was aware of those discussions um but at the uh at the end of the day no nothing ever materialized from them so they didn't get it done nothing thank you in fact the Biden Administration fact sheet on ipf uh listed its top agricultural uh priorities uh for their negotiations as promoting
▶ 2:48:49climate smart sustainable production practices optimizing land water and fuel use and contributing to climate change mitigation and adaption food security and resiliency if you read these without any context you wouldn't even know that I was talking about a trade negotiation Mr Root Harley-Davidson exports uh face exorbitant tariffs and other fees from ipf participants like Thailand
▶ 2:49:20Indonesia Vietnam and India did the Biden administration's ipf negotiations prioritize lowering these tariffs on the exports of your iconic motorcycles uh thank you Congressman yakim uh as I look I think the awareness that we would have as to some of these specific uh negotiations are are limited uh as a matter of fact uh the the bid Administration clearly did not prioritize
▶ 2:49:50these which is why a number of overseas uh countries are still charging tariffs on uh Harley motorcycles uh in fact uh India uh despite its massive tariffs wasn't even a participant in this uh trade pillar Miss uh Broadbent I agree that we should not be we should be pursuing negotiations for a trade agreement uh with the UK I'm actually a co-sponsor of chairman Adrien Smith's United Act which authorizes uh UK trade negotiations
▶ 2:50:21and lays out congress's priorities I'm also proud to say that my home state of Indiana was the first to secure a state level agreement with the UK but this feels a little bit like a groundhog day because president Trump already began negotiations uh with uh for a UK Trade Agreement during his first term during the four years of the Biden Administration did it meaningfully Advance trade negotiations with the UK I don't um
▶ 2:50:52I can't say for sure I mean I think it just went a lot slower and their comments where we're stepping back we're going to look at small business issues and they were not uh announcing that they wanted to do a comprehensive agreement with the with the UK they did some meetings but did not meaningful advance meaningfully advance trade negotiations with the UK I think that's very fair to say I think that's fair thank you uh Miss Bliss the the eu's regulatory regime uh has uh shifted or stifled the innovation but it's not enough to kill its own industry it
▶ 2:51:22wants to drag the rest of the world down with it by creating owner regulations wed in such a way as they just so happen to mostly target American companies should the federal government uh help American companies innovate grow and Export or should it be helping foreign governments put up barriers to keep American companies out well I think it's very important that the US government um as
▶ 2:51:52the White House indicated in the presidential memorandums and executive orders that it was interested in removing unfair barriers and I think the EU would be right up there um whether it's in cloud services or how it's administered its DSM DSA and dma um and uh and also in the area of dsts um I think it's very important that the government remain involved in removal of those those trade barriers as well as assisting
▶ 2:52:22thank you Mr chairman I look forward to turning the page on a trade agenda from the last four years that didn't seemingly be interested in trade uh to one where we actually negotiate trade deals as opposed to help other countries uh put up trade barriers uh for our Great American companies let's have an America First Trade policy with that Mr chairman I yield back thank you appreciate the gentleman yielding back again thank you to our Witnesses for sharing your insights and your obviously uh I think we can agree that
▶ 2:52:53um there's opportunity on the horizon to perhaps work together U across the aisle uh with various objectives though to sell more of our products and to keep various P perspectives in mind across our economy so uh please be advised that members have two weeks to submit written questions to be answered later in writing those questions and the answers from our witnesses will be made part of the formal hearing record with that the subcommittee stands adjourned