Today, the House Ways and Means Committee, chaired by Rep. Kevin Brady (R-TX), held a hearing with Department of Commerce Secretary Wilbur Ross on recent trade actions taken by the Administration, particularly the section 232 determinations on steel and aluminum.
Chairman Brady said at the start of today's hearing:
"As these tariffs go into effect tomorrow, I urge you to allow consolidation of petitions, retroactive application of exclusions to the date the petition was filed, and an exclusion period beyond the one year set out in your rules. These tariffs should be in place for the absolute minimum period. Their effectiveness should be constantly studied. They should be sunset after one year. If they are not having the effect you intend, we should assess whether another policy would be more effective instead of continuing them."
Chairman Brady stressed:
"Tariffs are taxes -- plain and simple -- on American job creators and consumers. Their scope and duration should never exceed what is needed to accomplish their goal."
Throughout the hearing, Members questioned Secretary Ross about these trade actions. Members also expressed eagerness to work together to ensure these tariffs don't hurt American workers and consumers.
Chairman Brady shared with the Secretary a story about Grant Prideco, a supplier of premium drill pipe and stem accessories based in Texas. Grant Prideco employs over 500 hardworking Texans and wants to double its workforce but has put expansion plans on hold due to the steel and aluminum tariffs.
Chairman Brady asked Secretary Ross:
"You have the discretion if a product is excluded to make those tariffs retroactive so there's not a harm on those U.S. companies. Will you consider that as part of the process?
Secretary Ross responded:
"Yes sir. We have actually made a formal request to the Customs and Border Patrol that they do what we call an Escrow account. This is quite commonplace between us and the Customs and Border Patrol in the context of anti-dumping and countervailing duties. So while the value here might be a little more, that's a process by which they are familiar. We think it's only fair because it shouldn't be that just because there's a 90-day process that any manufacturer who is granted relief should be stuck for the tariff during that 90 days."
Rep. Dave Reichert (R-WA), Chairman of the Subcommittee on Trade, recommended modifications to the exemption process and emphasized the need for a multilateral solution to the problem:
"There's another issue in sharing information as [businesses] apply for the exclusions. They are worried about proprietary information they are going to be sharing on their applications that are too sensitive to share publicly. While I agree that we must combat unfair trade practices, we need to take a targeted approach and work in a partnership with the global community on a solution."
Rep. Peter Roskam (R-IL) expressed concerns that the process for seeking exclusions on a product-by-product basis puts huge burdens on small businesses:
"The product exclusion request only allows for exclusion of one product at a time, even if the only difference in that product is size, such as the different diameters of steel wire. I represent suburban Chicago, and we've got a lot of small manufacturers. One company, as you know, will have hundreds and hundreds of products. The burden locally will be enormous if that's not spoken to and remedied in some way."
Rep. Adrian Smith (R-NE) stressed to the Secretary that the effect on farmers and ranchers must be assessed before tariffs are increased:
"Let me suggest that our agriculture economy is certainly not in a position to absorb any spears at this point given the sensitive nature and downturn in the ag economy that has gone on for longer than we have preferred, certainly."
Rep. Kristi Noem (R-SD) echoed concerns shared by Rep. Smith about the harm tariffs will have on agriculture:
"I encourage you to keep agriculture in the forefront of your consideration considering they are in such tough times."
Rep. Erik Paulsen (R-MN) emphasized that his constituents in Minnesota are better off due to tax reform, and he cautioned against undermining that progress by imposing broad tariffs:
"We've made a great deal of progress for American workers, and the last thing we want to do is hurt those workers by creating new barriers for them to work. I'm going to continue to ask tough questions and give voice to the concerns I hear from Minnesotans about the Administration's trade policies."
Rep. Jackie Walorski (R-IN), who represents a district with dozens of RV, boat, and trailer manufacturers, told the Secretary that even though these tariffs have not taken effect yet, the mere of threat of tariffs has already had major consequences for workers and manufacturers in Indiana:
"Even though the tariffs take effect tomorrow, the mere threat of tariffs have been felt already. One RV manufacturer told me the same model is 8.5% more expensive than last year. A trailer manufacturer has had to raise prices 25% -- 30%. He told me on the phone "I'm livid. We are getting destroyed.' This is about jobs in my district, and we have seen the price increases in the last year. This is a danger to jobs."
Rep. Carlos Curbelo (R-FL) emphasized that the Administration is right to target bad actors, but that it is important to keep the concerns of our allies in focus:
"I want to commend the Administration's efforts to hold the Chinese accountable. I think it's clear to everyone they undermine our economy, they undermine our workers, and holding them accountable is certainly the right thing to do. I would also ask the Administration to try to do right by our friends and allies throughout the world: the Europeans, here in the Americas, the Argentinians are concerned. These are countries that are trying to do right by the United States and their own people and I strongly encourage you to do everything you can to accommodate them so we can continue building those important alliances and friendships."
Chairman Brady closed the hearing by saying that the Administration is right to go after bad actors, and that the Ways and Means Committee is dedicated to continuing to work with the President to ensure any tariffs don't harm American workers:
"Clearly, there is a pretty consistent message here: support for cracking down on China's theft of intellectual property and our technology; strong support to make sure that American workers and families aren't punished for China's misbehavior. Your exclusion process is key to that. We encourage you to use all your resources and thoughtfulness in applying that exclusion process in a good, positive way."