U.S. GOVERNMENT PUBLISHING OFFICE

33–657 WASHINGTON : 2019

MISCELLANEOUS TARIFF BILL: PROVIDING 

TARIFF RELIEF TO U.S. MANUFACTURERS 

THROUGH THE NEW MTB PROCESS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON TRADE 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

OCTOBER 25, 2017 

Serial No. 115–TR03 

Printed for the use of the Committee on Ways and Means 

( 

ii 

COMMITTEE ON WAYS AND MEANS 

KEVIN BRADY, Texas, Chairman 

SAM JOHNSON, Texas 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

PETER J. ROSKAM, Illinois 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

MIKE KELLY, Pennsylvania 

JIM RENACCI, Ohio 

PAT MEEHAN, Pennsylvania 

KRISTI NOEM, South Dakota 

GEORGE HOLDING, North Carolina 

JASON SMITH, Missouri 

TOM RICE, South Carolina 

DAVID SCHWEIKERT, Arizona 

JACKIE WALORSKI, Indiana 

CARLOS CURBELO, Florida 

MIKE BISHOP, Michigan 

RICHARD E. NEAL, Massachusetts 

SANDER M. LEVIN, Michigan 

JOHN LEWIS, Georgia 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

BRIAN HIGGINS, New York 

TERRI SEWELL, Alabama 

SUZAN DELBENE, Washington 

JUDY CHU, California 

DAVID STEWART, Staff Director 

BRANDON CASEY, Minority Chief Counsel 

SUBCOMMITTEE ON TRADE 

DAVID G. REICHERT, Washington, Chairman 

DEVIN NUNES, California 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

MIKE KELLY, Pennsylvania 

PAT MEEHAN, Pennsylvania 

TOM REED, New York 

KRISTI NOEM, South Dakota 

GEORGE HOLDING, North Carolina 

TOM RICE, South Carolina 

BILL PASCRELL, JR., New Jersey 

RON KIND, Wisconsin 

LLOYD DOGGETT, Texas 

SANDER M. LEVIN, Michigan 

DANNY DAVIS, Illinois 

BRIAN HIGGINS, New York 

iii 

C O N T E N T S 

Page 

Advisory of October 25, 2017, announcing the hearing ........................................ 2 

WITNESSES 

Cindy Smith, Agricultural Relations Director, Gowan USA ................................ 5 

Edward V. McAssey, Chief Operating Officer, Lasko Products LLC .................. 10 

Michael Ratchford, Government Relations Associate, W.L. Gore & Associates . 14 

SUBMISSIONS FOR THE RECORD 

Footwear Distributors and Retailers of America (FDRA) .................................... 37 

Stephen Lamar, Executive Vice President, American Apparel & Footwear 

Association (AAFA) .............................................................................................. 39 

John Shelton, International Trade Compliance Manager, North America, 

Evonik Corporation .............................................................................................. 41 

MTB Carpet Group .................................................................................................. 43 

(1) 

MISCELLANEOUS TARIFF BILL: PROVIDING 

TARIFF RELIEF TO U.S. MANUFACTURERS 

THROUGH THE NEW MTB PROCESS 

WEDNESDAY, OCTOBER 25, 2017 

U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON WAYS AND MEANS, SUBCOMMITTEE ON TRADE, Washington, DC. 

The Subcommittee met, pursuant to call, at 2:17 p.m., in Room 

1100, Longworth House Office Building, Hon. David G. Reichert 

[Chairman of the Subcommittee] presiding. 

[The advisory announcing the hearing follows:] 

2 

ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON TRADE 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–1721 

Wednesday, October 25, 2017 

TR–03 

Chairman Reichert Announces Hearing on the 

Miscellaneous Tariff Bill: Providing Tariff 

Relief to U.S. Manufacturers Through 

the New MTB Process 

House Ways and Means Trade Subcommittee Chairman David G. Reichert (R– 

WA), announced today that the Subcommittee will hold a hearing entitled ‘‘Miscellaneous Tariff Bill: Providing Tariff Relief to U.S. Manufacturers Through the New 

MTB Process.’’ The hearing will focus on the potential economic benefits to U.S. 

manufacturers and consumers of providing temporary tariff relief through the new 

MTB process on imported products not produced in the United States. The Committee is preparing legislation to implement recommendations made by the U.S. 

International Trade Commission (ITC) in its final report. The hearing will take 

place on Wednesday, October 25, 2017 in room 1100 of the Longworth 

House Office Building, beginning at 2:00 p.m. 

The ITC’s final report, submitted to Congress consistent with the new MTB process established by the American Manufacturing Competitiveness Act of 2016, is publicly available and can be accessed here: https://mtbps.usitc.gov/external/. The Act 

provides that the legislation to be considered by Congress may not include any provision unless it was the subject of a petition submitted to the ITC and was deemed 

by the ITC to meet the MTB tests established in the Act, including that there is 

no domestic producer of a like product who objects to the provision. 

In view of the limited time to hear witnesses, oral testimony at this hearing will 

be from invited witnesses only. However, any individual or organization may submit 

a written statement for consideration by the Committee and for inclusion in the 

printed record of the hearing. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit written comments for the hearing record must follow the appropriate link on the hearing page 

of the Committee website and complete the informational forms. From the Committee homepage, http://waysandmeans.house.gov, select ‘‘Hearings.’’ Select the hearing for which you would like to make a submission, and click on the link entitled, 

‘‘Click here to provide a submission for the record.’’ Once you have followed the online instructions, submit all requested information. ATTACH your submission as a 

Word document, in compliance with the formatting requirements listed below, by 

the close of business on Wednesday, November 8, 2017. For questions, or if 

you encounter technical problems, please call (202) 225–3625. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any materials submitted for the printed record, and any written comments in response to a request for 

written comments must conform to the guidelines listed below. Any submission not in compliance with these guidelines will not be printed, but will be maintained in the Committee files 

for review and use by the Committee. 

3 

All submissions and supplementary materials must be submitted in a single document via 

email, provided in Word format and must not exceed a total of 10 pages. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

All submissions must include a list of all clients, persons and/or organizations on whose behalf 

the witness appears. The name, company, address, telephone, and fax numbers of each witness 

must be included in the body of the email. Please exclude any personal identifiable information 

in the attached submission. 

Failure to follow the formatting requirements may result in the exclusion of a submission. All 

submissions for the record are final. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TDD/TTY in advance of the event (four business days’ notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

Note: All Committee advisories and news releases are available at 

http://www.waysandmeans.house.gov

f 

/ 

Chairman REICHERT. The hearing will come to order. Good 

afternoon. The Subcommittee will come to order. Welcome to the 

Ways and Means Subcommittee hearing on the Miscellaneous Tariff Bill. 

Before hearing from our witnesses, I would like to make a few 

comments. For decades, Congress has considered bipartisan legislation to temporarily suspend or reduce tariffs on certain imported 

products not made in the United States through legislation that 

has become known as the Miscellaneous Tariff Bill, or MTB. The 

MTB is designed to boost the competitiveness of American manufacturers by lowering the cost of imported inputs and, in some 

cases, finished goods without harming domestic firms that produce 

competing products. 

Many companies in my home State of Washington have relied on 

the MTB, and I know that many of my colleagues have similar stories from their home districts. Our manufacturers have used the 

savings from past MTBs to strengthen their competitive edge, support the creation of domestic manufacturing jobs, increase U.S. production, and contribute to the economic growth of the United 

States. 

But the last MTB expired in 2012, and left American manufacturers without a process to help them cut costs. This undermined 

the ability of our manufacturers to provide more domestic jobs and 

damaged their global competitiveness. Last year, Congress took action and passed overwhelmingly bipartisan legislation to create a 

new and transparent process for providing tariff relief to U.S. businesses and companies. 

Under the new MTB process, companies petition the independent, nonpartisan International Trade Commission, not individual Members of Congress, for tariff relief. The new process is 

open and transparent and establishes an opportunity for public 

comment. It provides predictability for our businesses while also 

complying with the House rules. 

The ITC kicked off the new MTB process last October, launching 

a new public accessible portal for the filing of petitions and public 

4 

documents and comments. This August, after lengthy analysis, the 

ITC provided its final recommendations to Congress on more than 

2,500 petitions. Of those, the ITC has recommended that more than 

1,800 of these petitions be included in the MTB legislation. I commend the ITC for its tremendous effort and dedication in successfully bringing the new MTB process to life; and I thank the Commerce Department and Customs and Border Protection as well for 

its work. 

Now, Congress must act to consider an MTB and deliver longawaited tariff relief to our manufacturers. The Committee is doing 

its part by reviewing the ITC’s final report and preparing legislation to implement ITC’s recommendations. 

So I am eager to move forward and hear from our witnesses 

today about how tariff relief, provided through the new process, 

will benefit their businesses, make them more competitive, create 

jobs, and grow our economy. 

I now yield to Mr. Pascrell for his opening statement. 

Mr. PASCRELL. Thank you to our witnesses here today. Welcome. And I want to say thank you to my friend, Chairman 

Reichert, for calling this hearing. 

In my home State of New Jersey, a diverse array of different 

companies will be in a better position to compete as a result of this 

legislation. We have ICF Mercantile in Fort Lee, New Jersey, 

which will obtain duty relief on high-tenacity rayon yarn, an input 

for a material used for Naval defense systems. Unfortunately, this 

specialty yarn has not been produced domestically in 20 years, but 

that means there is no harm from removing a tariff here. 

New Jersey has a robust presence of chemical companies. In fact, 

it is the largest industry in the State of New Jersey, employing 

close to 100,000 people. Several of the firms will receive tariff relief 

on numerous imported chemicals that I dare not try to pronounce. 

And all those folks who like their anti-pasta and their Italian 

subs and salad or pizza with extra mild spice will be pleased to 

enjoy a break on the cost of pepperoncini, either packed in oil or 

not. 

I agree with the Chairman that the miscellaneous trade bill 

would provide some much-needed relief to United States manufacturers and the workers across the country. These companies, as 

well as those represented by our witnesses here today, will receive 

a competitive boost, be able to use their resources in a more productive manner, whether by raising wages or investing in research 

and development. 

One key reason that this bill stands to enjoy broad bipartisan 

support is the underlying analysis completed by the International 

Trade Commission and the Department of Commerce, to ensure 

that products that are currently produced in the United States are 

not included in the final bill. In this way, the MTB is designed to 

prevent domestic companies from being harmed. 

I look forward to working with other Members of Congress to 

pass a noncontroversial MTB in the coming weeks for the first time 

in 7 years. Seven years is too long to go between MTBs, and blame 

can be placed on the Majority’s short-sighted and far too blunt earmark policy. 

5 

I also want to note that what we accomplish with the MTB in 

terms of boosting U.S. manufacturing competitiveness is small compared to the challenges our manufacturers are facing globally. For 

example, China has announced an ambitious industrial policy 

called Made in China 2025. I think it is something we need to pay 

attention to. A plan to transform China into a leader in advanced 

manufacturing, including in key sectors like aviation, rail, new energy vehicles and agriculture machinery. 

As a champion of U.S. manufacturing, I want to emphasize that 

we, as a country, need to be thinking big picture about our future. 

We, as a Committee, should be taking the lead here. Unfortunately, 

I don’t see that we are right now. 

Before closing, I would also like to say that while I am glad that 

we are having this hearing today, I am still disappointed that this 

Subcommittee has not held a hearing on NAFTA renegotiations 

with the Administration witnesses. The need for a public hearing 

is highlighted by this Administration’s lacking record on transparency. 

In August, I led a letter calling for the Administration to appoint 

a chief transparency officer, as required by the statute, but the Administration has still not done so. No one can say this is partisan, 

because I whacked the last Administration for a lot of the same 

things. I have yet to receive a response to my letter sent August 

16. There were only three or four words in there that were more 

than two syllables. I don’t understand it. 

My transparency concerns go beyond process. Press reports have 

now suggested that NAFTA parties are negotiating on currency 

manipulation. The Administration has given no indication to any 

of us of its plans or intentions on the issue. While we are here 

today to discuss MTB, there are other issues with significant consequences for America’s economic well-being that we need to discuss openly. I look forward to a response from the Chairman on 

this matter very soon. 

Thank you, Mr. Chairman. I yield. 

Chairman REICHERT. Thank you, Mr. Pascrell. 

Today we are joined by three witnesses. The first witness is Ms. 

Cindy Smith, the Agricultural Relations Director for Gowan USA. 

Our second witness is Mr. Ed McAssey, the Chief Operating Officer of Lasko Products LLC. 

Our third witness is Michael Ratchford, the Government Relations Associate for W.L. Gore & Associates. 

Before recognizing our first witness, let me note that our time is 

limited, so please limit your testimony to 5 minutes. Members 

should keep their questions to 5 minutes. 

Ms. Smith, your written statement will be made a part of the 

record, and you are recognized for 5 minutes. 

STATEMENT OF CINDY SMITH, 

AGRICULTURAL RELATIONS DIRECTOR, GOWAN USA 

Ms. SMITH. Thank you, Chairman Reichert, and Ranking Member Pascrell, and Members of the Committee, for the opportunity 

to come before you today to speak to you regarding the Miscellaneous Tariff Bill, or MTB, on behalf of the Gowan Company. I am 

Cindy Smith, the Ag Relations Director of Gowan USA. I have 

6 

worked with the Gowan companies for about 18 years in a variety 

of commercial and regulatory roles. And it is my honor to be able 

to speak with you today about Gowan, and why we believe passage 

of the MTB is critical for our business, for agriculture and manufacturing in the United States to remain competitive and successful. 

Gowan Company is part of a group of companies headquartered 

in the agricultural community of Yuma, Arizona. As you might 

know, Yuma is the source of nearly all the lettuce grown in the 

United States during the winter months. So pretty soon when you 

start eating salad, know that lettuce is coming from our town in 

Yuma, Arizona. 

Gowan is the only basic manufacturer and distributor of crop 

protection products in the United States that remains owned by a 

single family, the Jessen family. 

The Gowan companies include: 

Gowan USA, which is sales and product development and marketing of our products here in the United States; Gowan Milling, 

which is a state-of-the-art manufacturing facility in Yuma that formulates many crop protection products. Gowan products only make 

up about 10 percent of Gowan Milling’s business. The vast majority 

of their business is toll manufacturing for other companies like 

BASF and DuPont. 

The Dune companies, which are based in Yuma, Imperial Valley, 

and Salinas, California, retail operations that sell crop inputs directly to growers. So they are certified pest control advisers that 

actually walk fields and make recommendations to growers. 

And then Gowan Seed, which is sales and product development 

and marketing personnel that focus primarily on vegetable seed 

production. 

Jon Jessen started the family of companies over 55 years ago 

after returning from military service in Korea. The business started with Jon himself walking fields, making pest control recommendations to growers, and now has grown into several businesses that provide a variety of inputs to U.S. growers. Through 

our marketing companies, we develop, register, and sell crop protection products around the world. 

The Gowan companies now employ more than 700 people in the 

United States, with a payroll that exceeds $50 million. Approximately half of those 700 jobs are in Yuma, Arizona, at our plant. 

Gowan Milling itself employs 300 of the 700 jobs and has become 

a major employer in Yuma. 

The MTB will help us be competitive and keep all these wonderful people employed and successful. Jon remains active in the business today as the Chairman of the Board; and his daughter, Juli 

Jessen, is the Chief Executive Officer; and other members of the 

family also remain very active in the business. 

Gowan develops, registers, and supplies crop protection products 

to farmers across the United States. Our business model is to acquire, develop, and maintain those products critical to agricultural 

production. We invest most of our profits right back into the business to improve the existing products or to bring new ones to the 

market. We primarily serve specialty crop markets, so fruits, nuts, 

and vegetables. U.S. specialty crop growers typically do not have 

7 

access to many crop protection products that growers of large row 

crops benefit from. 

So the specialty crop markets are smaller and, therefore, the 

tools that they have are critical to their success and to preserve 

and to be competitive. The MTB process is extremely helpful in allowing us to remain cost-competitive and provide those products to 

specialty crop growers. 

Gowan is clearly not the largest crop protection company in the 

United States, but is a small, family-owned business. Access to 

cost-competitive materials is critical to our ability to compete and 

to be successful. To serve our customers, we buy active ingredients, 

have products manufactured by contract manufacturers in the 

United States, and source some of our products from outside of the 

United States. 

To be competitive, we have developed strategic relationships with 

suppliers and vendors who are able to supply our needs in a timely 

and cost-effective manner. Because not all of the raw materials 

needed are produced here in the United States, we have found the 

MTB process is extremely helpful in reducing our overall cost and 

improving our global competitiveness. Gowan is very pleased that 

the new MTB process will regularly and predictably update the 

Harmonized Tariff Schedule to suspend or reduce duties on active 

ingredients and other products that we import because they are not 

available in the United States. This new process will bring enhanced certainty to our long-range planning and product development process. 

For our business and that of our customers, international trade 

is an essential component of our livelihoods. For this reason, we 

have a keen interest in efforts to remove tariffs on active ingredients and other products that we import. We can’t use those active 

ingredients as we import them. We have to do manufacturing on 

them to make them available to growers. 

So I appreciate the opportunity to provide input to you today, 

and I look forward to working with you on passing this bill as 

quickly as possible. Thank you. 

[The prepared statement of Ms. Smith follows:] 

8 


33657A.001

Written Testimony given by Cindy Smith 

Agricultural Relations Director for Gowan 

Before the House Ways and Means Trade Subcommittee 

Regarding the Miscellaneous Tariff Bill 

October 25,2017 

Thank you Chairman Reichert and Ranking Member Pascrell for the opportunity to come before the 

Committee today to speak to you regarding the Miscellaneous Tariff Bill (MTB) on behalf of the Gowan 

Company. I am Cindy Smith, the Agricultural Relations Director for Gowan USA. I have worked in the 

Gowan companies for about 18 years in a variety of roles. It is my honor to be able to speak with you 

today about Gowan and why we believe passage of the Miscellaneous Tariff Bill is critical for our 

business and for agriculture and manufacturing in the United States to remain competitive and 

successful. 

Gowan Company is part of a group of companies headquartered in the agricultural community of Yuma, 

Arizona. As you might know, Yuma is the source of nearly all of the lettuce grown in the United States 

during the winter months. Gowan is the only basic manufacturer and distributor of crop protection 

products in the United States that remains owned by a single family. The Gowan companies include: 

Gowan USA- sales, product development and marketing people that sell Gowan products; 

Gowan Milling- a state of the art manufacturing facility in Yuma that formulates many crop 

protection products. Gowan products make up about 10% of Gowan Milling's business. The 

vast majority of Gowan Milling's business is toll manufacturing for other companies like BASF 

and DuPont; 

The Dune Companies (based in Yuma, Imperial Valley and Salinas)- retail operations that sell 

crop inputs to growers. They have certified pest control advisors that walk fields and make 

recommendations for growers; 

Gowan Seed- sales, product development and marketing personnel that focus primarily on 

vegetable seed. 

Jon Jessen started the first of the companies over 55 years ago after returning from military service in 

Korea. The business started with Jon walking fields making pest control recommendations to growers 

and has now grown into several businesses that provide a variety of inputs to US growers (seed, 

fertilizer and crop protection products). Through our marketing companies, we develop, register and 

sell crop protection products around the world. The Gowan companies now employ more than 700 

people in the United States with a payroll that exceeds $50 million. Approximately half of the 700 jobs 

are in Yuma, Arizona. Gowan Milling itself employs about 300 of the 700 jobs and has become a major 

employer in Yuma. The MTB will help us to be competitive and keep all these wonderful people 

employed and successful. Jon Jessen remains active in the business as the Chairman of the Board and 

his daughter Juli Jessen is our Chief Executive Officer. Other family members are also active in the 

business. 
9 

f 


33657A.002

Gowan develops, registers and supplies crop protection products, such as herbicides, fungicides, 

insecticides and biologicals to farmers across the United States. Our business model is to acquire, 

develop and maintain products critical to agricultural production. We invest most of our profits right 

back into the business to improve existing products or bring new ones to the market. We primarily 

serve specialty crop markets (fruits, nuts and vegetables). US specialty crop growers typically do not 

have access to as many crop protection products as growers of larger row crops like corn and soybeans. 

The specialty crop markets are smaller so not all crop protection companies focus on those markets. 

Affordable access to our products is critical for US specialty crop growers and this is where a dependable 

MTB process is extremely helpful in allowing us to remain cost competitive. 

Gowan is clearly not the largest crop protection company in the United States but as a small, familyowned business, access to cost competitive materials is critical to our ability to compete and be 

successful. To serve our customers we buy active ingredients, have products manufactured by contract 

manufacturers in the United States, and source some of our products outside the United States. To be 

competitive we have developed strategic relationships with suppliers and vendors who are able to 

supply our needs in a timely and cost efficient manner. Because not all of the raw materials needed are 

produced in the United States, we have found that the Miscellaneous Tariff Bill process is extremely 

helpful in reducing our overall costs and improving our global competitiveness. Gowan is very pleased 

that the new Miscellaneous Tariff Bill process will regularly and predictably update the Harmonized 

Tariff Schedule to suspend or reduce duties on active ingredients and other products that we import 

because they are not available in the United States. This new process will bring enhanced certainty to 

our long-range planning and product development processes. 

For our own business and for that of our customers, international trade is an essentia l component of our 

livelihoods. For this reason, we have a keen interest in the efforts to remove tariffs on active ingredients 

and other products that we import. The active ingredients for which we are seeking tariff relief are not 

used as they are imported- they cannot be- they have to undergo further manufacturing, which occurs 

at Gowan Milling or another contract manufacturer. 

I appreciate the opportunity to provide input to the Committee today. I look forward to working closely 

with you and your staff as you consider the Miscellaneous Tariff Bill and to answering any questions you 

may have for me. Thank you. 
10 

Chairman REICHERT. Thank you. Mr. McAssey. 

STATEMENT OF EDWARD V. MCASSEY, 

CHIEF OPERATING OFFICER, LASKO PRODUCTS LLC 

Mr. MCASSEY. Good afternoon. My name is Ed McAssey. I am 

the Chief Operating Officer of Lasko Products LLC, headquartered 

in West Chester, Pennsylvania. Lasko is a 111-year-old company, 

a privately-owned company that was owned—— 

Chairman REICHERT. Mr. McAssey, could you pull the microphone a little closer to you. 

Mr. MCASSEY. Lasko is a 111-year-old privately held company 

that was owned by the Lasko family since inception. In 2016, we 

were sold to Comvest Partners, a private investment firm. 

Lasko employs 942 people in the United States at facilities located in Pennsylvania, Tennessee, and Texas. Many of those employees have been part of the Lasko team for over a decade. I, myself, have been with the company for 33 years. We manufacture 

fans, heaters, humidifiers, and range hoods. Portable electric fans 

make up about 72 percent of our sales. 

The Lasko story is a textbook example of what the United States 

Congress intended to provide with the Miscellaneous Tariff Bill, or 

MTB. Our factories in Franklin, Tennessee, and Fort Worth, Texas, 

manufacture the portable electric fans and employ 638 workers, 

roughly 68 percent of Lasko’s workforce. These are the two sites 

that will benefit from swift passage of the MTB. We are the only 

manufacturer in the United States of electric pedestal and desktop 

fans sold to the big box retailers. Our competition is exclusively 

from China. 

As a result of having to compete with low-cost Chinese manufacturers, our operating margins are razor thin. In order for our business to be viable against low-cost portable fans imported from 

China, we have invested heavily in automation for assembly, welding, and painting machinery. On any given day, we operate over 60 

injection molding machines, most of which were manufactured in 

the United States. 

Despite stiff competition from China, we are committed to maintaining our United States manufacturing facilities. In the past 3 

years, we have invested $7.4 million in plants, property, and equipment in Franklin, Tennessee, and Fort Worth, Texas. 

We make the injection molded parts in our fans with plastic 

resin from the United States. Much of the steel we use to manufacture our products is produced in the United States. We use cardboard made in the United States. I point this out to show the multiplying effect from our operations that benefit our suppliers as 

well. There would be a substantial negative effect on our suppliers 

if the MTB was to fail to pass. 

We are in a business of pennies. We can lose a sale to overseas 

competitors for a cost difference of 20 to 30 cents. The duty relief 

provided by the MTB on motor assemblies and related parts enables us to compete with suppliers in China who do not incur the 

costs of livable wages, health insurance, and retirement contributions that we provide our employees. Our average wage rate is over 

$16. Unfortunately, the 638 jobs that would benefit from the MTB 

are down 4 percent compared to this time last year. We have lowVerDate Sep 11 2014 11:37 Feb 11, 2019 Jkt 033657 PO 00000 Frm 00014 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33657.XXX 33657
11 

ered our price to try to compete with the volume to protect our employees’ jobs. 

The swift passage of the MTB is very important to Lasko and our 

workers. Our business benefits our steel, paint, and packaging suppliers. The tariff savings from the MTB in 2018 would be an estimated $1.5 million, and $4.8 million over a 3-year term. These savings will not only allow us to maintain our workforce, but to continue to source other parts from American suppliers. 

As you can see, the MTB is very important to American business 

as a whole. Passage of the bill would make Lasko and other manufacturers in the United States more competitive with low-cost manufacturing around the globe. That is why we are working with the 

National Association of Manufacturers and broader business community to explain the importance of this legislation for our workers. 

In the last year, there was a bipartisan showing which created 

the new process. While the process is not perfect, we look forward 

to working with all the stakeholders to suggest refinements and 

make the process work better in the future. Thank you. 

[The prepared statement of Mr. McAssey follows:] 

12 


33657A.003

Statement of Ed McAssey Before the House Ways and Means Sub-Committee on Trade 

Good afternoon, my name is Ed McAssey. I am the Chief Operating Officer of Lasko Products 

LLC headquartered in West Chester, PA. Lasko is a 111 year old privately owned Company that 

was until last year owned by the Lasko family since inception. In 2016 we were sold to Comvest 

Partners, a private investment firm. 

Lasko employs 942 people in the United States at facilities located in Pennsylvania, Tennessee, 

and Texas. Many of those employees have been a part of the Lasko team for over a decade. I 

myself have been with the company for 33 years. We manufacture fans, heaters, humidifiers, and 

range hoods. Portable electric fans make up 72% of our sales. 

The Lasko story is a textbook example of what the United States Congress intended to provide 

with the Miscellaneous Tariff Bill, or MTB. Our factories in Franklin, Tennessee and Fort 

Worth, Texas manufacture the portable electric fans and employ 638 workers, roughly 68% of 

Lasko's workforce. These are the two sites that will benefit from the swift passage of the MTB. 

We are the only manufacturer in the United States of electric pedestal and desktop fans sold in 

big box retailers. Our competition is exclusively from China. 

As a result of having to compete with low-cost Chinese manufacturers, our operating margins are 

razor thin. In order for our business to be viable against low-cost portable fans imported from 

China, we have invested heavily in automation for assembly, welding, and painting machinery. 

On any given day we are operating at least 60 injection molding machines, most of which were 

also manufactured in the United States. Despite the stiff competition from China, we are 

committed to maintaining our United States manufacturing facilities. In the past three years we 

have invested $7.4 million in plants, property and equipment in our Franklin and Fort Worth 

facilities. 

We make the injection molded parts in our fans with plastic resin made in the United States. 

Much of the steel we use to manufacture our products is produced in the United States. We pack 

our finished products in cardboard boxes made in the United States. I point this out to emphasize 

the multiplying effect from our operations that benefits our suppliers. There would be a 

substantial negative effect on our suppliers if the MTB were to fail to pass. 

We are in a business of pennies and can sometimes lose a fan sale to overseas competitors due to 

a cost differential of 20 to 30 cents. The duty relief provided by the MTB on motor assemblies 

and related parts enables us to compete with suppliers in China who do not incur the costs of 

livable wages, health insurance, and retirement contributions that we provide to our employees. 

Our average wage rate is over $16. Unfortunately, the 638 jobs at the plants that would benefit 

from the MTB are down by 4% compared to this time last year. We have lowered the price of 

our products as much as possible in an effort to generate enough sales volume to protect our 

employees' jobs. 
13 

f 


33657A.004

The swift passage of the MTB is very important to Lasko and our workers. Our business benefits 

our plastic, steel, paint and packaging suppliers. There are also businesses that provide us with 

parts and supplies for the relevant factories. The tariff savings from the MTB in 2018 would be 

an estimated $1.5 million, and $4.8 million over the three-year term of the bill. These savings 

would not only allow us to maintain our workforce, but also to continue to source our other parts 

from American suppliers. 

As you can see, the MTB is very important to American business as a whole. Passage of the bill 

would make Lasko and other manufacturers in the United States more competitive with low-cost 

manufacturing around the globe. That is why we are working with the National Association of 

Manufacturers and the broader business community to explain the importance of this legislation 

for workers in Franklin, Fort Worth, and around the United States. 

Last year in strong bipartisan showing, Congress passed legislation that created a new process 

for the consideration of the MTB. While the process has not been perfect, we look forward to 

working with all stakeholders to suggest refinements to ensure that the process can work even 

better in the future. 

I urge you to once again reach across party lines and pass the MTB as soon as possible, as it will 

provide tariff relief to domestic manufacturers who are committed to maintaining their facilities 

in this country and providing much needed jobs to the American people. Thank you. 
14 

Chairman REICHERT. Thank you. 

Mr. Ratchford. 

STATEMENT OF MICHAEL RATCHFORD, GOVERNMENT 

RELATIONS ASSOCIATE, W.L. GORE & ASSOCIATES 

Mr. RATCHFORD. Good afternoon, Mr. Chairman, Ranking 

Member Pascrell, Members of the Committee. Thank you for giving 

me the opportunity to speak with you this afternoon on this important topic for American manufacturers. 

My name is Michael Ratchford. I am the Government Relations 

Associate for W.L. Gore & Associates. Founded in 1958 in the basement of Bill and Vieve Gore’s house in Newark, Delaware, Gore is 

a privately-held American manufacturer. Today, Gore has approximately 9,000 associates globally, with 6,000 of my colleagues here 

in the United States. Our plants are located in Delaware, Maryland, Arizona, Pennsylvania, California, and Montana. 

Gore has more than 2,000 patents worldwide on electronics, military and consumer apparel, medical devices, and polymer processing. We are also recognized for our unique culture. We are consistently listed on Fortune Magazine’s best places to work. 

We are a strong supporter of the MTB process, and we have utilized the process since 2006. We appreciate the renewal of this important program. The new process builds on decades of work by 

Congress, and creates a more transparent, objective, and predictable process. The new process is rigorous, is rightly focused on ensuring that current and imminent U.S. manufacturing is not 

harmed. The new MTB process is significantly more transparent. 

Stakeholders have ample opportunities to become involved in the 

process. The number of petitions submitted alone demonstrates the 

demand for this type of duty relief. Of the 1,800 total petitions recommended for inclusion, they will save approximately $350 million 

in duties in 2018 and over $1 billion over the next 3 years. 

On Gore’s part, we submitted 46 petitions. We are pleased that 

22 were recommended for inclusion. In submitting our petitions, we 

worked with a number of trade associations, communicated with 

trade associations of which we are a member, including the National Association of Manufacturers; the Outdoor Industry Association, where I used to serve as Chair of the Trade Advisory Council; 

American Apparel and Footwear Association; National Council of 

Textile Organizations; Footwear Distributors and Retailers Association; and AdvaMed, which represents the U.S. medical device industry. 

MTBs are extremely important to the members of all these organizations. Virtually all of Gore’s thousands of products are based 

on one material: A versatile polymer called expanded polytetrafluoroethylene, or ePTFE. This material is best known in apparel 

and footwear as our signature product, GORE-TEX. It also, though, 

has broad applications in the medical field. Our medical products 

include synthetic vascular grafts, meshes, and sutures for vascular, 

cardiac, and general surgical procedures. Over the past 40 years, 

more than 40 million Gore medical devices have been implanted, 

improving patient outcomes worldwide. We create high-value products through our design, research and development, process engiVerDate Sep 11 2014 11:37 Feb 11, 2019 Jkt 033657 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33657.XXX 33657
15 

neering, testing, patenting, and market research, all conducted 

here in the United States. 

When in effect, the MTB alleviates duties that act as barriers. 

The savings on these duties translate into various benefits for 

Gore, our customers, and end users. For our medical products, we 

can invest in our ongoing U.S.-based research and development for 

our technically advanced products. For high-performance outdoor 

footwear, which face duties as high as 371⁄2 percent, we have observed that MTB allows our customers to add our technology more 

broadly at better price-points. For our North American companies, 

a majority of membranes and films for these footwear products 

originate in the United States. This means the highest value portion of the manufacturing remains American. 

In sum, I believe the new MTB process is meeting the goals of 

the American Manufacturing Competitiveness Act of 2016, and the 

petitions have been carefully and thoughtfully vetted to ensure 

there is no domestic availability of goods. Suspending duties on 

specific goods enhances American manufacturing competitiveness 

and helps to eliminate artificial economic distortions that negatively impact American manufacturers and consumers. The new 

process has been rigorous, open, and transparent, and should build 

confidence that it has been fair, open, and free from abuse. 

Mr. Chairman, thank you for the opportunity to appear here 

today. I look forward to answering any questions. 

[The prepared statement of Mr. Ratchford follows:] 

16 


33657A.005

luoRElf Crearive Technologies Worldwide 

Testimony of Michael Ratchford 

Government Relations Associate 

W.L. Gore & Associates 

U.S. House of Representatives 

House Ways & Means Committee 

Subcommittee on Trade 

October 25, 2017 
17 


33657A.006

Good morning. Thank you for giving me the opportunity to testify before you today on this 

critically important topic for American manufacturers. My name is Michael Ratchford, and I am 

the Government Relations Associate for W.L. Gore and Associates. 

Founded in 1958, W. L. Gore & Associates, Inc. is a privately-held company headquartered in 

Newark, Delaware. From our humble beginnings in the basement of Bill and Vieve Gore's 

house, Gore today has approximately 9,500 Associates inventing, making, marketing and selling 

innovative, technologically-advanced products; 6,000 of our Associates are employed here in the 

United States. Gore has been granted more than 2,000 patents worldwide in a wide range of 

industries, including electronics, military and consumer apparel markets, medical devices, and 

polymer processing. We are a strong supporter of the Miscellaneous Tariff Bill (or MTB) 

process. Gore has benefited from the MTB process beginning in 2006 with the inclusion of 

petitions for outdoor footwear that include a laminated textile that imparts protection against 

water while simultaneously permitting breathability. 

Upon creation of the new process in the American Manufacturing Competitiveness Act 

(AMCA), Gore submitted petitions that will allow us to obtain critical duty savings for our own 

imports on products that don't have domestic competition concerns, and we actively supported 

petitions submitted by our customers. Specifically, we have pending petitions for inputs for 

gasketing materials, components used in a special coating for implantable medical devices, 

hunting accessories, and outdoor footwear that protects the wearer against the elements, some of 

which contain a waterproof breathable sole. We strongly support passage of an MTB bill by 

Congress as quickly as possible. 

Gore appreciates the renewal of this important program; the MTB process creates an avenue for 

substantial duty savings. We believe the new rigorous process is rightly focused on ensuring that 

current and imminent U.S. manufacturing is not harmed. 

The AMCA creates an open process where stakeholders and the public can monitor filed 

petitions, comment, and better understand how petitions are evaluated. The new MTB process is 

significantly more transparent than previous iterations and ensures that stakeholders have ample 

2 
18 


33657A.007

opportunity to be actively involved during the vetting process, before being considered by 

Congress. 

The new process builds on decades of work by Congress and successive administrations to create 

a more transparent, objective, and predictable process for Congress to consider and enact the 

MTB. The duties that are eliminated undermine the competitiveness of manufacturers in the 

United States by imposing unnecessary costs. 

The number of petitions submitted demonstrates the demand for this type of duty relief. The 

I ,800 petitions to remove tariffs on imports included in a final report sent to Congress in August 

would eliminate tariffs of more than $350 million in 2018, and more than $1 billion over the next 

three years, if Congress acts to pass the MTB by the end of this year. Gore submitted 46 

petitions to the International Trade Commission (ITC) as part of this new process. We were 

pleased that 22 of those were recommended for duty reduction or elimination. As with any new 

process, we believe there is some room for improvement. We would appreciate an opportunity 

in the future to have a dialogue with the Committee and relevant agencies on how the process 

could be improved. We greatly appreciate the efforts of the ITC, the Department of Commerce, 

and U.S. Customs and Border Protection (CBP) in participating in this new process. 

As an innovative American manufacturer, we are a member of the National Association of 

Manufacturers (NAM). Gore also plays a leading role in Outdoor Industry Association (OIA), 

where I am the chairman of the Trade Advisory Committee, which focuses on pursuing a 

balanced trade agenda and creating a level-playing field. In addition, we are members of the 

American Apparel and Footwear Association (AAFA), the National Council of Textile 

Organizations (NCTO), and the Footwear Distributors and Retailers of America (FDRA). 

As a medical device manufacturer, Gore is also a member of Advanced Medical Technology 

Association (AdvaMed), which represents the U.S. medical device industry. MTBs are 

extremely important to the members of all these associations. 
19 


33657A.008

Virtually all of Gore's thousands of products are based on just one material, a versatile polymer 

called ePTFE (expanded polytetrafluoroethylene), which we engineer to perform a wide variety 

of functions. Consumers know us best for ePTFE's inclusion in apparel and footwear products, 

under the GORE-TEX brand which provides a unique combination of breathability and 

waterproof protection. 

In addition, Gore technology has broad applications in the medical field. Our medical products 

include synthetic vascular grafts, surgical meshes for hernia repair, and sutures for use in 

vascular, cardiac, and general surgical procedures. More than 40 million innovative Gore 

Medical Devices have been implanted, improving patient outcomes worldwide. Two of the 

MTBs we submitted for duty relief are inputs used to coat implantable medical devices to ensure 

hemocompatibility. These particular petitions truly exemplify the need and value of this process. 

Collectively, Gore and our partners are global leaders in innovation and technology. Our success 

as a market leader and a global innovator derive from extensive investments we make in the 

United States. We create high value for products through our research, product development and 

design, process engineering, testing and analysis, and patenting and market research conducted 

in the United States, principally within our Maryland, Delaware, Pennsylvania, California, and 

Arizona campuses, along with one of our newest product lines located in Bozeman, Montana, 

which is home to SITKA Gear. 

Our commitment to invest in innovation in dozens of complex products means we can 

successfully compete and win globally. We manufacture technically sophisticated, IF-intensive 

products. As an example, in high performance apparel and footwear, the GORE-TEX brand is 

known for its high-quality and innovative products, but there are only a limited number of 

factories in the world capable of manufacturing to our high-quality standards. 

When in effect, the MTB process alleviates duties that act as barriers and allow us to supply the 

market with a broader variety of products. The savings on duties translate into various benefits 

for Gore and our customers. For our medical products, duty savings from the MTB can be 

invested into our ongoing U.S.-based research and development, which allows us to develop new 

4 
20 

f 


33657A.009

technology that improve patient outcomes. For outdoor footwear especially, which face duties as 

high as 37.5%, we observed that the MTB allows our customers to add our technology more 

broadly across their product line and deliver a wide range of innovative styles at better pricepoints for outdoor enthusiasts. Moreover, for our North American customers, the majority of 

membranes and films for footwear products originate in the U.S. This means the highest value 

portion of the manufacturing is done domestically. This high-tech process makes shoes and 

boots water-proof and breathable to enhance the outdoor experience for our customers. Gore 

products are the result of substantial research and development conducted in the United States. 

Lastly, I'd like to highlight the real-world positive impact that MTBs have for manufacturers and 

U.S. consumers based on Gore's previous experience. 

As illustrated above, MTBs create and support U.S. jobs. The reduced duties under the MTB 

serves as an incentive for Gore to increase our investment in developing new innovative 

technologies that would benefit outdoor enthusiasts and improve patient outcomes. 

For example, in late 2012, Gore unveiled GORE-TEX SURROUNDTM technology, a new 

innovation platfonn in footwear. GORE-TEX SURROUND technology is configured to include 

breathability through the sole of the shoe and improves footwear comfort beyond what could be 

previously achieved using only the upper of the shoe while still keeping feet dry in wet 

conditions. As with any new and innovative product, the upfront costs to produce and sell at 

retail are much higher than for more established products. Coupled with 20% to 37.5% import 

tariffs, the total costs are even higher. The release of this new technology alongside the 

expiration of the last MTB essentially priced GORE-TEX SURROUNDTM footwear out of the 

U.S. market. As a result, GORE-TEX SURROUNDTM was introduced only to the European and 

Asian markets, giving these brands a first to market advantage. While a few U.S. footwear 

brands have since introduced the technology into their collections in limited styles, they remain 

behind their European and Asia Pacific competitors. 

Thank you for renewing the MTB, a great opportunity for U.S. companies, and for considering 

my remarks today. I am happy to answer any questions. 
21 

Chairman REICHERT. I thank all of you for your presence here 

and for accepting our invitation. Thank you for your testimony. 

And your testimony today makes it clear that the temporary duty 

relief provided by the MTB is essential in helping our American 

companies stay competitive, especially with increasing pressure 

from China. 

Mr. McAssey, you highlighted this important point in your testimony. Can you explain a bit more about the increasing competition 

you face from China and how the MTB allows you to stay competitive, manufacture here in the United States, and continue to employ American workers? 

Mr. MCASSEY. Yes. Thank you, Mr. Chairman. 

Yes. So we import the motor from China. The motors, you know, 

no one has contested the fact that the motor is not available in the 

United States. And what it allows us to do is do the rest of the 

manufacturing, and, you know, that is the steel, the bodies, the injection molding. So we add a lot of value to doing that here in the 

United States. This is not just, you know, a screwdriver operation. 

With $7.4 million of PP&E, it is a substantial investment to the 

manufacturing process. And, you know, we have done it largely 

with automation. And all the competition right now does come from 

the PRC. 

Chairman REICHERT. So how does MTB allow you to be more 

competitive? 

Mr. MCASSEY. You know, because we get down into just razorthin margins. So sometimes, you know, the difference of a sale is 

20 to 30 cents, and, you know, we have worked with low, low margins. And this would allow us to go in and try to, you know—and 

continue to try to generate more volume to help drive down our 

unit cost. 

Chairman REICHERT. So the elimination of that tariff would 

allow you to sell more products, then may lead to more jobs? 

Mr. MCASSEY. Yes, sir. 

Chairman REICHERT. Ms. Smith, you mentioned in your testimony that the new MTB process provides better certainty and predictability, which will help long-range planning and product development. Can you talk a little bit more about how the new process 

helps you better plan and make investment choices in a small family-owned business like yours? 

Ms. SMITH. Sure. So, not unlike my other panel members here, 

as a small family business, margins are key, right? So as we were 

just discussing with you, the cost of goods is a key driver of that. 

And so, as we look at opportunities to either invest in existing 

products that we have today, or in developing new products to 

bring to the market, or partnering with others to bring products 

into specialty crops, what we can project in our business plans 

about what our potential margin will be is critical to us being able 

to spend the dollars up front to develop those products and get 

them registered, and then sell them. 

So our investment happens before we can ever sell a product. So 

having a predictable process that lets us better estimate what the 

cost of goods is for our products is critical to that whole process. 

Chairman REICHERT. It provides certainty for you? 

Ms. SMITH. Absolutely, yes. 

22 

Chairman REICHERT. Thank you. Mr. Pascrell. 

Mr. PASCRELL. Thank you, Mr. Chairman. 

Mr. Ratchford, you said in your testimony that your company, 

Gore, appreciates the renewal of this important program, the MTB. 

The process creates an avenue for substantial duty savings. We believe the new rigorous process is rightly focused on ensuring that 

the current and imminent U.S. manufacturing is not harmed. That 

was your testimony. 

So let me ask you this: How does your company plan to use the 

saved revenue that would result from the passage of this MTB? 

Mr. RATCHFORD. Mr. Pascrell, for our company, I think the investments would be in continued research and development in a 

variety of products. You know, the more competitively priced those 

products are, the more revenue we have. That, one, helps secure 

American jobs. As I said, we have 6,000 associates here in the 

United States. Our employment footprint has been very constant 

over the past decade in that regard. But our real lifeblood is innovation, and continuing to invest in research and development is 

where some of the profits, one of the gains of the MTB would be 

made. 

Mr. PASCRELL. Thank you. To any of the witnesses, how important is tariff relief on manufacturing inputs to your competitiveness with imports of finished goods? Ms. Smith. 

Ms. SMITH. Sure, I will start. So it is very important, because 

agriculture is a global economy, right? And there is no one product 

that everybody uses. They have to use multiple products. So all of 

our products are competing with everything else that comes in. So 

having that competitive advantage, both in the manufacturing and 

in the ability as we sell our products, is critical to our success. 

Mr. PASCRELL. Mr. McAssey, any thoughts about that? 

Mr. MCASSEY. Yes. With us, you know, getting back to, you 

know, we are in this business of pennies. And allowing us to, as 

Ms. Smith indicated, have known certainty, we can continue to invest and invest in the R&D to make the product so that it is—you 

know, we would like to change the rules of the game where it is 

not just cost-based. And this gives us the certainty to know that 

if we do make this investment, that we can be competitive. 

Mr. PASCRELL. Mr. Ratchford. 

Mr. RATCHFORD. Yes. I mean, I agree with my colleagues and 

what they said here. I mean, it makes us all more competitive. It 

secures those American jobs. As I said before, for our company, we 

invest in research and development. 

Mr. PASCRELL. Go ahead, Ms. Smith. 

Ms. SMITH. I would just like to add one thing to your question, 

which is that, you know, you asked what do we do with the savings 

that we get from these. One, for sure, is what we have all talked 

about, which is reinvestment into our companies and products and 

research and development and bringing products to the market. 

But we also have a profit-sharing program with our employees. 

So when we have 700 employees, anything I can do to reduce my 

cost benefits my employees. It allows me to continue to provide 

healthcare coverage; it allows me to pay bonuses; it allows us to 

give raises. So I think that, you know, for sure, one is in the prodVerDate Sep 11 2014 11:37 Feb 11, 2019 Jkt 033657 PO 00000 Frm 00026 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33657.XXX 33657
23 

ucts that we bring and the manufacturing, but also in the benefits 

to the employees and the rest of the people in our community. 

We have a program where we invest in our schools, to help bring 

science to the classroom there, so people understand science and 

the importance of agriculture. And any savings that we have allows 

us to continue to do those things. 

Mr. PASCRELL. And the reason why I asked the question in the 

first place is I think that we need a barometer in terms of when 

we use that term ‘‘savings’’ and making yourself more competitive. 

I want to see where wages are in the company before and after. 

There is no law that we can pass to do that, but it would certainly 

lead to the solvency of the program. We have, you know, 3 years; 

every 3 years we vote on this. 

So the point of the matter is the results need to be somewhere 

that we can measure, and we are not just talking about feelings 

here. I know you are not. We need to talk about what is measurable in terms of helps the stagnant wages in the United States of 

America, besides providing you with the ability to be a little bit 

more competitive. Thank you. 

Thank you, Mr. Chairman. 

Chairman REICHERT. Thank you. 

Ms. Jenkins. 

Ms. JENKINS. Thank you, Mr. Chairman, for holding the hearing. And I thank the panel for your testimony this afternoon. 

Mr. Chairman, this new MTB process has yielded a workable 

and transparent report with more than 1,800 recommendations of 

tax cuts for American consumers and manufacturers, increasing 

our competitiveness abroad, while creating and saving jobs here at 

home. 

For example, the ITC’s final report contains two specific provisions that directly affect my district with positive impacts. Both of 

these provisions would benefit Goodyear’s manufacturing plant in 

Topeka, where the company manufactures truck as well as off-theroad tires used for earth-moving and mining equipment. 

With more than 1,700 employees, Goodyear is one of the largest 

private manufacturing employers in eastern Kansas, and its Topeka manufacturing facility has been in operation in the State 

since 1945. Additionally, the plant covers 69 acres under one roof, 

making it easily one of the largest tire manufacturing plants in the 

world. 

One of Goodyear’s petitions is for segmented compression tire 

molds greater than 25 inches. Goodyear’s workers use these molds 

for curing the type of off-road earth-moving tires made right there 

in Topeka. These molds are used in the curing process to apply 

both heat and pressure to give a tire its final shape. And as the 

ITC report reflects, molds of this size are simply not produced in 

the United States and must, therefore, be imported. 

The second petition is for a certain chemical input that is one of 

the key raw materials in Goodyear’s production of an antioxidant 

used in tire manufacturing by all of Goodyear’s tire plants throughout the United States, including the Topeka plant. Again, this 

input is so specific and domestically unavailable that the ITC has 

recommended it for swift tariff relief. 

24 

As I mentioned before, relief for these products and the hundreds 

of other products included in the report will help companies like 

Goodyear, in my district, better compete globally and create jobs 

across the country. 

Mr. Chairman, I was pleased to support the American Manufacturing Competitiveness Act back in 2016, and today, I am pleased 

to see this MTB process moving forward, to provide benefits for 

Kansans and for the rest of the Nation. 

And with that, Mr. Chairman, I will yield back. 

Chairman REICHERT. Thank you, Ms. Jenkins. 

Mr. Kind. 

Mr. KIND. Thank you, Mr. Chairman. Thanks for holding this 

hearing. And I appreciate the witnesses’ testimony here today. 

Mr. Ratchford, when you were mentioning the various States 

that W.L. Gore has a presence in, I couldn’t help but wince, because you had a great facility in the heart of my congressional district in Eau Claire, Wisconsin, for a while that was sold. But that 

was when I got to meet now-Senator Chris Coons, when he was 

working for Gore at the time, and got to know him really well. But 

we appreciate hearing your feedback. 

And with all due respect to the witnesses, this is kind of a boring 

hearing because it is not that controversial. It has been 7 years 

since we have been able to move an MTB, and it is long overdue. 

And I think we have a nice process put in place now with the ITC 

petition process and the vetting that takes place as well as the 

standards that will clear. And hopefully, we will be able to move 

forward on this, just realizing the economic impact that it could 

bring. But it is another indication of why working on a proactive 

trade agenda, that tears down barriers, that provides for a freer 

flow of goods and products and services, is so important for the revitalization of our economy right here at home. 

And, Mr. Chairman, I know this is a Trade Subcommittee hearing, but given the amount of time that we have in committee apparently these days, I think it would be wonderful if we at least 

try to tee up a few hearings on the comprehensive tax reform that 

we are working on these days, because this stuff gets complicated 

real fast, and I have a feeling that each one of you as witnesses 

could probably come and offer some insight on the tax provisions 

that are being discussed, or at least thought about. 

I mean, Ms. Smith, you mentioned that your company is still 

family-owned. I presume you are an S corp right now, so a passthrough entity when it comes to tax liability purposes? 

Ms. SMITH. [No verbal response.] 

Mr. KIND. Yes, that is right. Well, one of the challenges we are 

facing is how not to leave the pass-throughs behind in reform and 

so it is not just corporate tax relief at the end of the day. And how 

do we do that and politically justify it with people back home without providing a huge windfall to the private equity or the hedge 

fund dudes on Wall Street who are billionaires? 

And these are things that we are wrestling with. And I think it 

would be very helpful, that getting feedback and some vetting from 

all of you too before we make a terrible mistake by trying to rush 

something to the floor without proper vetting, without proper hearing, and then suffer the consequences a little bit later on. 

25 

So it doesn’t sound, Mr. Chairman, as if that is in the cards. It 

sounds like this is all going to be done behind closed doors and 

then we are going to have a two- or three-night markup on it before it comes to the floor. But I think without the proper vetting, 

it is going to be difficult to produce good policy with that process. 

My question, though, for you on this measure is, how hard do 

each of your respective companies look for a domestic source for the 

product that you need rather than just worrying about the MTB 

tariffs and trying to reduce those? 

And, Mr. McAssey, you said you guys import molders from 

China. I mean, are you approaching domestic manufacturers of 

molders and saying, hey, this is what we need. Can you supply us 

and what would the cost be? 

Mr. MCASSEY. Yes. We continually do that. We are, you know, 

concerned about even the stability of supply in China. Up until 

2000, we made a motor. It wasn’t as energy-efficient as what we 

are able to get in China. We weren’t competitive with it. But we 

made it ourselves. We were the last people to make this. In the 33 

years that I have been with the company, I would venture to say 

that I haven’t seen anyone able to do this in over 25 years other 

than ourselves. 

Mr. KIND. Really. The type of quality, efficiency that you are 

getting from China and what they are making? 

Mr. MCASSEY. Yes, yes. 

Mr. KIND. So there are some economies of scale, certain comparative advantages that they enjoy there for some reason that we 

can’t duplicate here domestically. 

Mr. MCASSEY. I mean, you know, before I came with the company, we always had, you know, a good livable wage. We had 

healthcare; we had a pension; now we have a 401(k). But, you 

know, with that, you know, we are competing against people that 

a lot of times don’t have these benefits and the regulation, the safety. 

You know, I have traveled to China. I have seen the plants. 

Granted, it has gotten better. But, you know, the environment, the 

safety, you know, the ability to select workers and that process, you 

know, all things that we enjoy as Americans that they don’t have 

there, and, you know, we compete against that. 

Mr. KIND. Are you confident that the company you are doing 

business with in China has certain respectable standards that live 

up to our principles? 

Mr. MCASSEY. Yes, yes. We definitely—we have a process 

where we vet that. We audit that. And we have accountability to 

our customers, to their standards. 

Mr. KIND. Okay. Thank you. 

Thank you, Mr. Chairman. 

Chairman REICHERT. Mr. Kelly. 

Mr. KELLY. Thank you, Mr. Chairman, and thank you all for 

being here. 

I am going to go a little different direction, because I know you 

all compete globally and you rely on a global supply chain, because 

you don’t have access to everything you need for your finished 

product being made right here in the States. 

26 

But where I want to come from is a question that we all worry 

about, and that is revenue. And I am not talking just about what 

the company pays. I am talking about what you also pay in wage 

taxes, you and your associates, how that helps out when it comes 

to Social Security, your real estate taxes that you pay, your economic impact, because all the people that supply you in addition 

to the folks overseas are also part of this whole economic picture. 

So I know that you can’t do it right now, but if we don’t start 

looking at the economic impact, when we start to lose American 

jobs and we have American companies leaving because they just no 

longer can stay in America and compete globally, then I think we 

are missing the entire boat. We are always looking for revenue. 

And we can’t cut our costs, so we have to go after you to supply 

the revenue. And we know where the revenue comes from, okay, 

it comes from companies that are profitable and people who are 

working. That is the only place it comes from. 

So if you can, if you can get back to us with each of your companies, to let me know the economic impact not only on the communities that you are in, but also with your global suppliers, because 

you have other people right now in the States that are helping you 

also. 

So I think it is incredibly important that we recognize that. And 

I know, listen, I don’t know of anybody who is in business anymore 

that can say, you know what, we are in a pretty good spot because 

we don’t have to compete against anybody and we have a product 

that everybody has to own and they have to buy it at our price. 

There is nobody else on the shelf but us. 

So I think, again, the economic impact, total economic impact of 

what you are able to do is incredibly important, not only to this 

Committee, but to the communities you are in, the States that you 

are in, and the country that we all are trying to keep going. So if 

you can get back to us with that, I would really appreciate it. 

Other than that, I want to thank you for taking time out of your 

lives to come here and to sit before us, to let us know where it is 

right now that you are sitting and the competition that you face. 

I am also from the private sector. Listen, it is hard. And I don’t 

know anybody that doesn’t have anything but razor-thin margins. 

It is just that close. When you said 20 to 30 cents, the difference 

between somebody picking your product or somebody else’s product, 

I think most people would say, oh, no, that is impossible. The business I am in—I am in the automobile business—is $5 a month that 

can make the difference between us being able to sell a car to 

somebody and somebody else being able to sell a car to somebody. 

So I am really concerned about where you sit and what it is you 

are trying to do. So I know you can’t answer my question right 

now, but if you get back to us, I think it is really critical that everybody sitting on this panel understands the total economic impact of what it is that you do. 

Also, if you wouldn’t mind, how about including some of the contributions you make to the communities you are in that help out. 

Things like the United Fund and other fundraising things and 

charities that you all compete in or produce. I would really appreciate that. 

27 

So, Mr. Chairman, thank you. And thank you all for being here. 

Listen, it is tough. It is tough out there. We are all trying to get 

to the same place. So thank you so much for being here. I yield 

back. 

Chairman REICHERT. Mr. Levin. 

Mr. LEVIN. Thank you. Thank you, Mr. Chairman. 

You know, as we sit here, I think it is perhaps useful to just 

think back a bit as to how miscellaneous tariff issues were handled 

in the past, because some of those who worked on this aren’t here 

now. But there was a real effort on a bipartisan basis, going back 

many years, to provide transparency, to make sure that everything 

was aboveboard, to make sure that any impact on domestic producers was clearly known. Those were the days when we very 

much tried to work together. 

And what happened was that there was some conflict with rules 

within the Republican Conference, and essentially all the work that 

was done in previous years—and I think at least one of you benefited from the miscellaneous tariff, all of you did before. So what 

happened was that we changed it so that instead of Members filing 

bills, essentially, people would file on their own, it would go to the 

ITC. 

And I have mixed feelings about that. There was some feeling 

that perhaps some Members were making political points, but I 

don’t think that was true, basically. I think they were motivated 

by knowledge of what was going on within their own districts, in 

most cases. And so this has become part of kind of the separation 

of Members of this House from activities in their districts. And I 

think when it was abused, it needed to be addressed, but the end 

of this process, I think, also tended to disconnect Members of Congress from what was going on within their own districts. 

So I think we just need to take a look at that as we proceed. And 

just remember how hard this Committee worked to try to change 

a process that was not transparent and where there, perhaps, 

wasn’t abuse, to make sure that everything was aboveboard. 

And let’s remember if any single person disagreed on this Committee with proceeding with a bill, it was automatically discarded. 

It took just a single person, I think, among those who were either 

ranking or on the Subcommittee entirely. 

So I also want to say it is useful to have this hearing, but I want 

to reiterate what Mr. Kind said. There is an irony in our coming 

together and spending an hour, an hour and a half on this important issue that I think is essentially in good shape, and not having 

a single hearing on what is today the main mystery of Washington, 

the tax bill. 

And I would urge Republicans on this Subcommittee to try to 

help the leadership. I finish with this: The Miscellaneous Tariff Bill 

has always been—not always, but in recent years, has been 

hallmarked by transparency. And essentially, we are going to take 

up a tax bill that to date has no transparency whatsoever. 

I yield back, and again thank the witnesses for being here. And 

continue to tell us how it is working, because we wanted to be sure 

that industrial efforts continued as long as it benefited the workers 

of this country and its companies. I yield back. 

Chairman REICHERT. Mr. Paulsen. 

28 

Mr. PAULSEN. Thanks for holding this hearing today, Mr. 

Chairman. This is an issue that is essential to the success of manufacturing in my home State of Minnesota, as well as the rest of the 

country. Just take a look at both the past and the future. First, in 

the past, since the last MTB expired at the end of 2012, we have 

seen $748 million in additional taxes for American manufacturers 

every year, and an almost $2 billion hit to the economy. And the 

MTB package in 2010 supported 90,000 U.S. manufacturing jobs, 

increased production by $4.6 billion, and expanded U.S. GDP by 

$3.5 billion. 

And now the future. The ITC’s report contains more than $350 

million in much-needed tariff relief for our American manufacturers this next year, and $1 billion over the next 3 years. As far as 

government programs go, this one has a pretty good return on investment: Thousands of jobs, billions of dollars in economic gains 

for what boils down to a few million dollars in tax relief for American manufacturers every year. 

It is important to note that this tax relief does not come at the 

expense of other American producers. The International Trade 

Commission must determine that the materials that are receiving 

tariff reduction or elimination through the MTB process are not 

produced domestically. So in the end, this is a win-win situation. 

Our manufacturers get well-deserved tariff relief on materials that 

aren’t produced here in America, and American consumers get the 

lower prices when they go to the store. So I am excited that this 

process is now up and running once again. I look forward to getting 

this MTB legislation across the finish line later this year. 

Let me ask a question: We do know that, according to the Inter- national Trade Administration, every $1 billion in exports, American exports, supports about 5,000 domestic jobs. Your testimony 

today, from all of you, highlights the importance of the MTB to 

American businesses and American consumers and the wide-ranging benefits that process offers. 

Now, the other way to help boost American competitiveness, including reduced tariffs on inputs not available in the United States 

and better market access for American-made products, is through 

more trade agreements, free trade agreements. 

Do you believe, do you agree—and I will start with you, Ms. 

Smith—that it is important for the United States to maintain its 

existing trade agreements, and to also work on negotiating additional agreements? 

Ms. SMITH. Thank you. I do believe existing trade agreements 

are important. I think the position of agriculture is pretty wellknown about their belief about trade agreements. As you talked 

about, we export a lot of agricultural products from the United 

States. Our business is a supportive one of U.S. agriculture, so we 

are fully supportive of anything that helps U.S. growers sell their 

products overseas. 

So I would say yes, the trade agreements that we have in place 

are very critical for agriculture. Any work we do on trade agreements, we should first look at, you know, what is the impact to 

U.S. business, right, and make sure we do no harm to U.S. business. 

Mr. PAULSEN. Mr. McAssey. 

29 

Mr. MCASSEY. Yes, Mr. Paulsen. In our case, the existing trade 

agreements have been a net positive for us, mainly the NAFTA. At 

this point, the global exports to the rest of the world with the thin 

margins, it is just not there for us. But in our own case, you know, 

we have had a substantial increase in our shipments into Mexico 

and to Canada from the existing trade agreement. 

Mr. PAULSEN. Selling American to Mexico? 

Mr. MCASSEY. Selling from America into Mexico and into Canada. 

Mr. PAULSEN. Mr. Ratchford. 

Mr. RATCHFORD. Mr. Paulsen, I agree with my colleagues. I 

mean, FTAs are very important. I mean, they provide certainty for 

the business community out there. They open up markets for us 

and it provides a level playing field. As long as those free trade 

agreements are, you know, fairly negotiated and adequately enforced, we would continue to be supportive of that. 

Mr. PAULSEN. Would you say in this modernization of NAFTA, 

which is going on right now, that it is important for stability and 

confidence as a part of your expert knowledge, or continuing that 

track down the road, that you are counting on that, it is important? 

Ms. SMITH. Yes. I think it is—I talked about it a little bit in 

my testimony. Certainty is critical, right? And understanding what 

those trade agreements say today and what they may or may not 

say in the future is critical. I think getting input from those who 

are impacted is essential so that you have a firsthand understanding of what those impacts are. 

I mean, we do crop protection products, but we also grow dates. 

We export our dates to Canada, Mexico primarily. We have an impact on a number of different levels from those agreements. So I 

think it is essential, yes. 

Mr. PAULSEN. Thank you very much, Mr. Chairman. 

Chairman REICHERT. Mr. Holding. 

Mr. HOLDING. Mr. Chairman, thank you very much for holding 

this hearing on the Miscellaneous Tariff Bill. I am sure none of you 

will be surprised to learn that North Carolina has more MTBs recommended by the ITC than any other State. Of the 1,800 petitions 

from the ITC, over 330 of those were submitted by North Carolina 

businesses. Those petitions represent an estimated duty savings of 

over $70 million in 2018 alone. 

MTB legislation would benefit a wide variety of manufacturers in 

North Carolina, such as textile manufacturers like Glen Raven, or 

crop science companies around the Research Triangle Park, or appliance manufacturers in Charlotte. All of these benefit underneath 

the plan. This represents a tax cut that not only benefits the individual importing the product, but, of course, it also benefits downstream producers, distribution service providers, but, most of all, it 

benefits consumers. 

So I think this is an incredible opportunity to cut those duties, 

which are taxes, and have the opportunity to reinvest them in our 

communities. As we all know, it has been nearly 5 years since the 

last MTB has expired, and this caused U.S. businesses and consumers to face hundreds of millions of dollars in higher tariffs with 

no domestic relief resource. 

30 

So I appreciate the witnesses taking the time to share their stories with the Committee, and I am sure their thoughts will be 

echoed across the Nation, especially in North Carolina, as we examine the potential impact of MTB legislation. So I look forward 

to working with you, Mr. Chairman, and continuing this process, 

and I appreciate the opportunity to have this hearing. 

With that, I yield back. 

Chairman REICHERT. Thank you. Mr. Doggett. 

Mr. DOGGETT. Thank you, Mr. Chairman. This hearing, like 

the last hearing we had in the Subcommittee, is really an alternative to bringing anyone from the Trump administration here to 

explain the totally confusing Trump trade policy on NAFTA, and 

on other trading arrangements with the rest of the world. 

We will meet privately with the trade ambassador later this 

afternoon, but it has to be in a private session so secret that for 

any staff member to attend, they need to have a top secret security 

classification. And I can understand, given the total contradictions 

in the Trump trading policy, why they would be reluctant to come 

to this Committee. 

As my colleagues have noted, it is also peculiar that we are considering a tax cut bill today in a public hearing, a tax cut bill, the 

total amount of which is hardly a footnote to the monstrosity that 

we were told will be dropped on America next Wednesday, with a 

1,000-plus page bill, where, again, all efforts to secure hearings on 

that tax bill have been thwarted. 

We have been here in September, in October. We will get to November 1 without having a single hearing, with a total unwillingness to have anyone from the Trump administration come and be 

held accountable, to answer any questions, to explain their tax bill, 

because the idea is, having learned nothing from the failed 

healthcare repeal, to force this bill through with as little opportunity for comment from affected businesses like yours that have 

to decide are we better off expensing or losing our deduction for interest in the process? 

What happens to our retirement plans? How are some different 

industry sectors affected from others? So it is really unfortunate 

that the only tax bill we get a hearing on is this modest one. 

Now, the Miscellaneous Tariff Bill, when it is reviewed, when 

these tariff concessions are reviewed by the International Trade 

Commission, the Commission is not charged with determining the 

impact on the public interest with reference to each of these matters. 

And let me ask you. I appreciate your testimony. You sound like 

all-American companies, each of whom will benefit in a constructive way from the reductions that are proposed. Are any of your 

companies affiliated with a foreign enterprise? Are you a subsidiary 

of any foreign business? 

Ms. SMITH. No. 

Mr. MCASSEY. No. 

Mr. RATCHFORD. No. 

Mr. DOGGETT. Well, we don’t apparently then have a representative here of companies that are. And there are a number of companies that are scheduled to get benefits. The pharmaceutical inVerDate Sep 11 2014 11:37 Feb 11, 2019 Jkt 033657 PO 00000 Frm 00034 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\33657.XXX 33657
31 

dustry gets about $12 million to $13 million a year in proposed 

benefits if the bill is approved as it has been filed. 

And it looks like kind of a mini United Nations there. I see a 

company from Japan, a couple from Germany, from Sweden, from 

Korea, from Switzerland, from the United Kingdom, certainly not 

the kind of small businesses that your companies represent, that 

are scheduled to get benefits. 

One of the more curious ones in here is the proposed reduction 

of a tariff on aspirin, and why it is that that will lead to any benefit for the American consumer is hard to understand. Indeed, the 

report language on the original Miscellaneous Tariff Bill talks 

about the advantages to consumers of avoiding higher prices. 

But we have no explanation of how pharmaceutical manufacturers who are engaged in some of the most outrageous price gouging 

in the country, in interfering with consumers who—I talked to one 

woman recently who said she had to choose between breathing and 

eating because of the cost of her asthma medication, how any of 

those consumers will see a dime of benefit from this reduction, and 

why it is that a bill and a process that is designed to help small 

businesses in America targets so many of its benefits on companies 

that are really just foreign affiliates of manufacturers from abroad. 

So this may grow jobs for these companies in Germany or Sweden or Korea, but it is not clear how it will grow jobs here, or how 

it will save American consumers a penny on these pharmaceuticals. 

And I yield back. 

Chairman REICHERT. Mr. Meehan. 

Mr. MEEHAN. Thank you, Mr. Chairman. 

And I am very grateful for the presence of these companies who 

have made such a commitment to our Nation with the work that 

you are doing. And I am grateful for my good friend from New Jersey, Mr. Pascrell, and his participation in this process. He got me 

a little hungry. I want to know what restaurant we are going to 

go to to take advantage of all of those things you were protecting 

from that Italian sandwich you were describing. 

But I am aware, as you said, that your companies that are really 

competing, you are competing in a margin, in a very, very tight 

margin. 

Mr. McAssey, I appreciate the presence that you have right there 

in my district and the great work that you do preserving those jobs 

there. 

When you are taking advantage of a program like this, I know 

you are working on very, not just tight margins, but tight timeframes. How important is it to you that this MTB is expeditiously 

done? What impact does it have if you have delays and things of 

that nature in the process? 

Mr. MCASSEY. Thank you, Mr. Meehan. Yes, I lost track of the 

time and I wanted to cover that in my testimony. But we are a seasonal business. You know, fans are sold, you know, in the spring 

and summer. We just got done quoting our customers for the upcoming year in 2018. And the certainty, you know, of getting back 

to—if we had known, you know, where we stood on this issue, we 

feel pretty good, but we have been, you know, very close to the finish line before and haven’t been able to get it done. So, you know, 

timing is very important in our case. 

32 

Mr. MEEHAN. So it is not just timing as well, but one of the 

things that I have noted is, you identified that you have issues 

with competition from China. 

Mr. MCASSEY. Yes. 

Mr. MEEHAN. And this enables you to be able to beat that competition currently. Can you speak a little bit to your relationship 

with China? If, in fact, you believe that in addition to this benefit 

that you are getting from the MTB, are you seeing any other kinds 

of trade practices that are being conducted in the industry in a 

predatory way or otherwise coming out of China? 

Mr. MCASSEY. Well, you know, I want to only speak to what I 

can prove, but we have seen, in the last couple of years, a concentration. Instead of a very fragmented Chinese supplier base, it 

has become much more consolidated and driven toward our products. You know, we make a lot of fans, and we are always, you 

know, looking. You know, we feel like we have a bull’s eye on our 

back. 

Mr. MEEHAN. When you say consolidated supplier base, can you 

help educate me on what you are referring to? A supplier base that 

you are competing with China for access to or—— 

Mr. MCASSEY. Competing with in China. 

Mr. MEEHAN. And are they doing anything in a predatory way 

to shut down competition in those suppliers that makes it harder 

for you to get components? 

Mr. MCASSEY. No. I mean, we have been able to go to suppliers 

that are not part of that finished good, you know, basis. We have 

been able to work with suppliers that primarily will make the motors and motor assemblies. But I am not aware of any specific predatory practices other than very, very low prices. 

Mr. MEEHAN. Right. Well, thank you for what you are doing, 

keeping the jobs here in the United States with the great workforce 

that you have and the great product that you produce. 

Mr. MCASSEY. Thank you. 

Mr. MEEHAN. And, Mr. Ratchford, thank you as well with your 

presence very close and around my district, and I think in a number of others districts here in the United States. You have also 

identified, in your comments, this process, but you also talked 

about—some of it is working, maybe some improvements. Can you 

give me some insights into how this is working for you? If you have 

some suggestions now that we have been down this road for just 

a very short window, what your experience has been, and how you 

think it might be able to be improved? 

Mr. RATCHFORD. Sure, Mr. Meehan. So with any new process, 

there is going to be kinks in the process. And we appreciated the 

opportunity to work with the agencies involved, and the folks involved were great. So if I had a couple of suggestions right off the 

bat, it would be, first, that the initial portal was somewhat rigid. 

That if you had to amend a petition, you had to start from scratch 

and put in a new one, you couldn’t, like, edit it, so that made it 

a little bit difficult. 

Mr. MEEHAN. Did it have any kind of impact on you in terms 

of time and things of that nature? 

Mr. RATCHFORD. Sure. Sure. You would have to reenter the 

whole thing, and the folks who do that, it was sort of a frustrating 

33 

experience. Again, I am not blaming anyone, it was just the way 

it was constructed. It is sort of remarkable they got it up and running as fast as they did. 

And then, second, the ITC was great and it was an opportunity 

to have a dialogue. So you got down the line—there were issues 

raised by Customs and Border Patrol about the ability to administer provisions of it. And it would have been more helpful to have 

had that dialogue—a similar dialogue with CBP that had been had 

with the ITC. 

Again, the definitions that are provided are highly technical, and 

they are worried about, can they enforce this, can they administer 

it. So as we go forward, it is increasing that level of transparency, 

increasing that level of dialogue, would be two things that I would 

suggest. 

Mr. MEEHAN. Thank you. Well, thank you for your very, very 

good suggestions. I know they will be taken into consideration by 

the Committee. Thank you for your testimony here today. 

Chairman REICHERT. Thank you. Mr. Davis. 

Mr. DAVIS. Thank you very much, Mr. Chairman. And I, too, 

thank the witnesses for being here. I am proud to know that 

AkzoNobel is a global Fortune 500 company that is listed on the 

EuroNext Amsterdam and NASDAQ stock exchanges. The company 

is also listed on the Dow Jones sustainability indexes. AkzoNobel 

is a multinational organization that serves customers throughout 

the world with human and animal healthcare products, coding, and 

chemicals. 

An employer of more than 61,000, it is divided into 13 business 

units, and maintains operating subsidiaries in more than 80 countries. It is one of the world’s leading chemical producers. Its chemical division specializes in pulp and paper, polymers, functional and 

base chemicals. AkzoNobel has a portfolio of more than 2,000 different chemical products that are used as raw material, and intermediate materials for the manufacture of everyday items. Of 

course, it is an American-based company that is located in my district. And I know that they have five petitions approved by the 

International Trade Commission. 

Mr. McAssey, you mentioned that you do joint manufacturing 

with interest in China. Could you tell me, if you know, how many 

of those kind of joint manufacturing items that you might 

produce—that your company produces? 

Mr. MCASSEY. Yes, sir. So we use the motors on the fans that 

we sell in the United States—that we manufacture in the United 

States, which is, I think, roughly 60, 65 percent. So every one of 

them does have a motor that is coming from the PRC right now. 

Mr. DAVIS. And do you have that kind of manufacturing activity 

with other countries, or in other countries as well? 

Mr. MCASSEY. No, sir. We don’t own any factories in the United 

States. We have explored other countries, but, you know, we have 

not been able to find one that can provide what we need. I think 

long-term the next step for us would be, you know, if we can establish the volume base and—I have long-termed the—the next step 

for us is to look at making them in the United States, going back 

to it. 

34 

Mr. DAVIS. If I could ask each one of you quickly, what kind of 

trade policy do you think helps your company the most? 

Ms. SMITH. What kind of trading policy? Is that what you said? 

Mr. DAVIS. Yes. 

Ms. SMITH. Clearly, a fair trading policy, right, that considers 

what the impacts are for us, but I think, as Mr. Kelly was suggesting, that all of us are in a business that has impacts beyond 

what we do, right? So who we sell to, who we buy from, and what 

we do in our communities must all be considered. So I think it has 

to be a broad consideration of what the impacts are to make sure 

that we can remain competitive as American companies, familyowned businesses, in small communities competing on a global 

scale, I think all of us globally. 

Mr. DAVIS. Thank you. 

Mr. RATCHFORD. To those comments, I would add protection of 

intellectual property in trade agreements, and counterfeiting is another issue there. But respect for that rule of law and intellectual 

property protection would be things that I would add to what 

Cindy said. 

Mr. DAVIS. Yes. 

Mr. MCASSEY. And protection of our jobs, you know, in terms 

of a level playing field. You know, the trade policies we have can 

certainly be tweaked, but they are helping us right now, at least 

in North America. 

Mr. DAVIS. Thank you all very much. 

Mr. Chairman, I have about half a minute left and I would like 

to yield that to Mr. Pascrell. 

Chairman REICHERT. Mr. Pascrell. 

Mr. PASCRELL. Thank you, Mr. Davis. And thank you, Mr. 

Chairman. I would like to comment in response to my friend, Mr. 

Doggett’s concerns, regarding the inclusion of pharmaceutical products in the MTB. We all agree that we support the aim of supporting low cost for medicines, but is keeping tariffs on products 

the way to do that? If anything, removing tariffs provides an incentive for lower costs. 

On the issue of aspirin, there was a thorough public comment 

process for stakeholders to weigh-in on their views on that particular subject, legitimate subject, but not a single objection was 

filed, not from a public interest group or a domestic manufacturer. 

So, Mr. Chairman, the tariff relief provided by this bill will only 

last 3 years anyway. The bill lasts 3 years. So any impact this bill 

might have on domestic manufacturing would only be temporary, 

if any. Moreover, aspirin was included in the MTB that we voted 

on back in 2010. You voted for it, Mr. Doggett, and I voted for it. 

My friend voted for it and I voted for it in favor of both of the bills. 

So I hope that we can avoid—it is an easy target when we get 

into the area of trade. It is such a sensitive issue. Needless to say, 

pharmaceuticals is a very sensitive issue, one of the primary reasons for the increase in health costs. But I don’t think this is the 

avenue to deal with that. 

Thank you and I will yield back. 

Chairman REICHERT. Thank you, Mr. Pascrell, for your comments. 

Mr. Rice is recognized. 

35 

Mr. RICE. Thank you, Mr. Chairman, for holding this hearing. 

MTBs have certainly come to the aid of a number of the businesses 

in my district. They are very important. My district, Mr. Ratchford, 

was—I am in northeastern South Carolina, and there was a fair 

number of textile companies in my district before—up until the 

1980s, and now all those buildings are sitting there empty, but a 

few of them have survived and continue to thrive. One in particular 

in Cheraw, South Carolina, called Highland, makes fairly advanced 

and technical textile materials, even things that go into rocket engines and such. So I am very proud and happy to have them. 

But I am curious, in your capacity as Chairman, or as a member 

of the National Textile Council. 

Mr. RATCHFORD. So we are a member of the National Council 

of Textile Organizations. We are a member of a couple different associations. 

Mr. RICE. Can you give me some more specific examples of how 

MTBs help our remaining textile companies in America to compete 

globally? 

Mr. RATCHFORD. So let me talk a little bit about Gore’s participation in NCTO. We are members of that for purposes of our military fabrics business. And so certainly protecting the Berry amendment is very—— 

Mr. RICE. Could you pull that microphone a little closer, please. 

Thank you. 

Mr. RATCHFORD. Sorry about that. As I was saying, we are a 

member of NCTO. We are in NCTO because of our military fabrics 

business, and so we are protective of the American textile industry 

there. 

Mr. Rice, I don’t have the specifics on it. I can get those to you. 

But I do know at the time this due process was launched, I believe 

that NCTO did make a comment in support of the process going 

forward. 

Mr. RICE. Okay. Mr. Chairman, with that, I will yield back. 

Chairman REICHERT. Thank you. Thank you again for your 

presence here and taking time out of your busy schedule and for 

your testimony, and then also for your answers to the questions 

that we posed to you. As you can tell, this is one of those few moments where there is a sense of bipartisanship, that you have created this opportunity for us, provided us with good news, even to 

the point where there are two Members probably headed to New 

Jersey later this week for an Italian sandwich. So, you can leave 

Washington D.C. feeling good about that positive outcome. But 

more than that, you can feel good about your testimony because 

you have represented many, many companies across this country 

that benefit from MTBs that, as you have described, provide so 

much for, not only your companies, but then, proceeding through 

the revenue that you generate that goes back into your company 

to your employees. And then even out into the community, as Mr. 

Kelly spoke to so eloquently; and then also, finally, to the benefit 

of U.S. consumers for less expensive products. 

So this is a priority for us to complete this year. And its timely 

renewal is critical, as well as the generalized system of preferences, 

the GSP. So, again, I appreciate your testimony and your time here 

with us today. 

36 

Please be advised that Members will have 2 weeks to submit 

written questions to be answered later in writing, if you would, 

please. Those questions and your answers will be made a part of 

the formal hearing record. Our record will remain open until November 8th, and I urge interested parties to submit statements to 

inform the Committee’s consideration of the issues discussed today. 

The Committee is adjourned. Thank you. 

[Whereupon, at 3:30 p.m., the Subcommittee was adjourned.] 

[Submissions for the Record follow:] 

37 


33657A.010

November 21,2017 

The Honorable Dave Reichert 

Chairman, Trade Subcommittee 

House Ways and Means Committee 

1102 Longworth House Office Building 

Washington, D.C. 20515 

FEDRA 

The Honorable Bill Pascrell 

Ranking Member, Trade Subcommittee 

House Ways and Means Committee 

1102 Longworth House Office Building 

Washington, D.C. 20515 

Dear Chairman Reichert and Ranking Member Pascrell: 

The Footwear Distributors and Retailers of America (FDRA) writes to express its 

strong support for advancing the Miscellaneous Tariff Bill (MTB) as soon as possible. 

Founded in 1944, FDRA is governed and directed by footwear executives and is the only 

trade organization focused solely on the footwear industry. FDRA represents the width 

of the industry from small, family-owned footwear businesses to global companies 

selling to consumers around the world. Members include the majority of U.S. footwear 

manufacturers, brands, retailers, and importers, and today FDRA supports over 130 

companies and 250 brands. 

The MTB remains important to both U.S. footwear companies and consumers, and 

FDRA greatly appreciates Congress working to create a new and transparent process for 

considering the MTB, with the passage of the American Manufacturing Competitiveness 

Act of 2016 (AMCA). Under this process, the U.S. International Trade Commission has 

determined that a number of footwear petitions filed by FDRA members meet the 

requirements of the Act for inclusion in the MTB subject to approval by Congress. 

Providing temporary and limited MTB duty-relief for these products would greatly 

benefit American footwear consumers, workers, and businesses throughout the U.S. 

The AMCA highlights the significance of MTBs to both American consumers and 

manufacturers. As the Act states, the current Harmonized Tariff Schedule of the United 

States (HTSUS) "imposes duties on imported goods for which there is no domestic 

availability or insufficient domestic availability [which J creates artificial distortions in the 

economy of the United States that negatively affect United States manufacturers and 

consumers." Footwear duty rates are among the highest in the HTSUS and are frequently 

higher on lower price footwear. Reducing these duty rates through MTBs will provide 

American consumers with lower prices, which is particularly important to working class 

individuals and families. It would also increase the competitiveness of American 

footwear businesses, which helps strengthen jobs, innovation, and growth in our industry. 

As the Committee considers ways to improve the current MTB process to provide greater 

transparency to the American public, a central goal of the AMCA, FDRA recommends 

ensuring that future MTB petitioners receive full and complete information from the 

Department of Commerce and other agencies on any objections to MTB petitions. 
38 

f 


33657A.011

FDRA members have expressed concerns that they were unable to respond to certain 

comments from interested parties, because these comments were shared with the 

Department of Commerce on a confidential basis instead of through the open and 

transparent MTB process created by Congress. Many of these issues raised in the 

dark might have been resolved quickly and positively with additional clarification from 

the petitioning company, but no such opportunity was provided because of this defect 

in the current process. 

In addition, Congress should strengthen the MTB process by establishing clear 

requirements for the Department of Commerce to verifY domestic production. 

FDRA members have raised concerns that the method utilized by the Department of 

Commerce lacks consistency, transparency, and clearly established rules for verifYing 

production. Throughout the process, FDRA consulted closely with domestic industry 

interests to ensure that we did not support petitions that would have adverse 

consequences for domestic producers. To this end, having a uniform and transparent 

process for Commerce to assess domestic production would greatly improve the process. 

We look forward to working with you on the MTB and other efforts to provide duty relief 

that would generate real savings for the individuals and families who buy shoes, and we 

appreciate your efforts to prepare and advance the MTB. 

Sincerely, 

Matt Priest 
39 


33657A.012

AMERICAN 

APPAREL& Advocacy that fits. 

FOOTWEAR 740 6th Street, f\- W · Washington, DC 20001 I P: 202-853-9080 I www.aafaglobal.org 

ASSOCIATION 

October 25, 2017 

Chairman David Reichert 

Trade Subcommittee 

House Ways & Means Committee 

1102 Longworth HOB 

Washington D.C. 20515 

Ranking Member Bill Pa screll 

Trade Subcommittee 

House Ways & Means Committee 

1102 Longworth HOB 

Washington D.C. 20515 

RE: October 25, 2017 Hearing on the Miscellaneous Tariff Bill (MTB): Providing Tariff Relief to 

U.S. Manufacturers Through the New MTB Process 

Dear Chairman Reichert and Ranking Member Pascrell: 

On behalf of the U.S. garment, footwear, and travel goods industry, we write in strong support of 

the process Congress has established for the Miscellaneous Tariff Bill (MTB) and urge Congress to 

act quickly to approve the current MTB as soon as possible. 

Representing more than 1,000 world famous name brands, the American Apparel & Footwear 

Association (AAFA) is the trusted public policy and political voice of the U.S. apparel and footwear 

industry, its management and shareholders, its nearly four million U.S. workers, and its contribution 

of $384 billion in annual U.S. retail sales. 

We were thrilled when Congress passed bipartisan MTB reform. Providing U.S. companies the 

ability to eliminate or reduce duties on inputs and fini shed goods not available or manufactured in 

the United States is smart policy. It supports companies, and the U.S. workers that employ them, 

that rely upon global value chains by helping them reduce certain tariff costs. Given the scale of the 

undue duty burden our industry faces- in 2016, our industry generated more than 50 percent of 

duties collected by the U.S. government despite only accounting for a mere 6 percent of total 

imports by value- such duty relief is critical for our industry. 

The current MTB includes nearly 1800 individual product petitions, as recommended by the U.S. 

International Trade Commission (lTC), and will provide $350 million of duties savings in 2018, and 

more than $1 billion over the next three years to U.S. companies. Dozens of these provisions 

include textile, footwear, travel goods, and apparel products that would benefit our industry and its 

four million American workers. As found by the lTC during the MTB process, the provisions do not 

harm any U.S. domestic manufacturers, and instead would provide real and immediate benefits for 

the industry, including those engaged in manufacturing in the United States. 

Page 112 
40 

f 


33657A.013

Therefore, we applaud you for holding today's hearing, and again urge you to move toward quick 

Congressional passage this year of the entire MTB package recommended by the lTC. 

We look forward to working with the Committee and the lTC as it considers the next tranche of 

MTBs in the coming years. It is our hope that the process used can be strengthened in several ways. 

First, we ask that all comments, whether in opposition or support, that are provided to the 

Department of Commerce (DOC) for its report, be published in the same manner as comments filed 

to the lTC to ensure full transparency. Under the reformed process in 2016, the lTC published all 

submitted comments via its online portal, whereas DOC refused to even share the company names 

that provided input without their explicit permission to petitioners, the public, or the lTC. In several 

cases, the Commerce Department reported domestic production even though no objection was 

lodged through the lTC portal, and petitions were not recommended solely on this finding. 

Moreover, petitioners were unable to contact those lodging anonymous objections to determine if 

they might be able to source products domestically and generate business for U.S. manufacturers. 

The secretive nature of the Commerce Department's report and the input used to prepare it 

undermines the transparency that Congress sought to ensure in the new MTB process. 

Second, it is imperative that the evaluation process used by the lTC and the Commerce Department 

for claims of domestic production include a verification mechanism of actual or imminent 

production of a like or directly like product in commercial quantities at similar price points within 

the United States. It remains unclear what steps, if any, were taken to verify claims that the product 

is a like or like directly completive product and, if so, whether it is produced in commercial 

quantities domestically. 

Thank you for your time and consideration in this matter. Please contact Nate Herman of my staff 

at 202-853-9351 or nherman@aafaglobal.org if you have any questions or would like additional 

information. 

Sincerely, 

c: + (c- lc-----

Stephen Lamar 

Executive Vice President 

Page 212 
41 


33657A.014

Evonik Corporation 

Statement for the Record 

Hearing on the Miscellaneous Tariff Bill: 

Providing Tariff Relief to U.S. Manufacturers Through the New MTB Process 

U. S. House of Representatives 

Committee on Ways and Means Trade Subcommittee 

Oct. 25, 2017 (submitted Nov. 7, 2017) 

On behalf of the Evonik Corporation, I am pleased to provide the following statement 

to the House Committee on Ways and Means Trade Subcommittee and thank Chairman 

Dave Reichert and Ranking Member Bill Pascrell for holding this important hearing. 

I am John Shelton, International Trade Compliance Manager, North America, for Evonik 

Corporation. I have worked for Evonik for 14 years in a variety of roles and can speak 

to the importance of the Miscellaneous Tariff Bill to our company and why passage of 

the bill is critical for our manufacturing business in the United States. 

Evonik is one of the world's leading specialty chemicals companies. The central 

elements of our strategy for sustained value creation are profitable growth, efficiency 

and principles. Evonik's history in North America stretches back to 1882 when Franz 

Roessler started a paint company in Brooklyn, New York. Since then, Evonik has grown 

to more than 40 sites, in Mexico, Canada and the U.S., with approximately 5,000 

employees throughout the region. 

While Evonik no longer manufactures paint, it does produce the ingredients that help 

coatings last longer and endure harsher conditions . It also makes silicas and silanes 

that help tires roll better and reduce fuel consumption and greenhouse gas emissions. 

Evonik produces feed additives to supplement animal nutrition, polymers for 30 

printing, active pharmaceutical ingredients and ACRYLITE® acrylic sheet for improved 

lighting and design. To supply these products, as well as nearly 4,000 others 

worldwide, Evonik has experienced significant growth in North America over the past 

several years . 

Evonik Corporation is headquartered in Parsippany, New Jersey, but has more than 30 

manufacturing facilities across the United States. International trade is an essential 

component of our company's continued success. Accordingly, we have a keen interest 

in the efforts by this Committee to complete the Miscellaneous Tariff Bill (MTB) 
42 

f 


33657A.015

process. Over the years, the MTB has helped U.S. manufacturers such as Evonik, 

maintain their competitive edge by providing temporary relief from select tariffs on 

products not available or manufactured in the United States. The tariff saving s for 

Evonik from the MTB in 201 8 would be an estimated $3.8 million, and over $10.0 

million over the three-year term of the bill. These savings would not only allow us to 

maintain our workforce, but also to continue to grow our manufacturing capability in 

the United States. 

We applauded Congress ' bipartisan efforts last year to pass the "American 

Manufacturing Competitiveness Act of 2016" which created a new process for the 

consideration of the MTB. We now urge Congress to move toward quick passage this 

year of the entire MTB package as recommended by the lTC. 

I appreciate the opportunity to provide input to the Committee and look forward to 

working with Congress as it considers the Miscellaneous Tariff Bill. I would be pleased 

to answer any questions you may have for me or to provide additional information to 

the Committee. 

Thank you. 

John Shelton 

International Trade Compliance Manager, North America 

Evonik Corporation 
43 


33657A.016

THE MTB CARPET GROUP 

The Honorable Dave Reichert 

Chairman, Trade Subcommittee 

Committee on Ways and Means 

U.S. House of Representatives 

Washington, D.C. 20515 

Dear Mr. Chairman, Ranking Member Pa screll and Committee Members: 

October 25, 2017 

The "MTB Carpet Group," an ad hoc group of U.S. importers, wholesalers and retailers of 

handmade carpets (area rugs), greatly appreciates the decision of the Trade Subcommittee to convene a 

hearing on the Miscellaneous Tariff Bill. 

The MTB Group is thankful to the Congress for enacting the American Manufacturing 

Competitiveness Act (AMCA) of 2016, which created the new MTB process. The MTB Group participated 

actively in that new administrative process and now awaits Congressional enactment of a new 

Miscellaneous Tariff Bill this year. Enactment in 2017 will ensure that our imports of hand-tufted wool 

rugs, a traditional handicraft product, can benefit from a lower duty rate starting in January 2018, as 

contemplated by the AMCA. 

We are very gratified that the process Congress created for identifying which products should be 

subject to reduced duties or no duties resulted in a recommendation from the U.S. International Trade 

Commission to temporarily reduce the import duties on hand-tufted wool rugs (HTSUS 5703.1020). 

These hand-made carpets are unique items that are not made in the United States. However, the 

importation, distribution and sales of these carpets creates and maintains many jobs, providing 

livelihoods for Americans across the country, from the East Coast to the West Coast and from states in 

the North to states in the South of the country. While the duty reduction for hand-tufted wool rugs is 

small, from 6% ad valorem to 5.8% ad valorem, that duty savings is very important to our business, 

which continues to recover from the Great Recession. The duty-savings strengthen our 

competitiveness. We expect to be able to pass the duty savings on to our customers, for whom these 

hand-tufted oriental rugs are a discretionary purchase. 

We also would like to take this opportunity to recommend to the Subcommittee that it provide 

some direction to the responsible agencies to improve the next round of the MTB process. The first 

round of this process was an important learning experience for the U.S. International Trade Commission 

(Commission) and U.S. Customs & Border Protection (CBP), just as it was a learning process for the 

members of the MTB Carpet Group. 

It was the express objective of Congress to create and maintain "a n open and transparent 

process for consideration of petitions for duty suspensions and reductions," including a "fully vetted" 

process. The MTB Carpet Group therefore recommends that the Congress advise the Commission and 

CBP that, in future rounds, they should include an opportunity for petitioners to meet with Commission 

and/or CBP staff to discuss how proposed tariff provisions cou ld be made administrable through more 

accurate drafting. During the first round, two MTB provisions requested by the MTB Carpet Group were 

placed in "Category VI" because "the Commission determined the article description could not be 

administered," based upon advice from CBP. The MTB Group had developed some suggested revisions 
44 

Æ 


33657A.017

Page Two 

to the proposed tariff language and sought to meet, or talk by telephone, with CBP staff to discuss how 

the provision could be revised to address CBP concerns. However, the MTB Carpet Group was advised 

by Commission staff that there was no process in place for such direct contacts between petitioners and 

responsible agency staff and therefore no discussion was scheduled. 

The MTB Carpet Group fully recognizes the burden on the agencies, especially given the number 

of petitions filed. Yet, discussions between the Commission or CBP and a petitioner is a step that could 

take place after the Commission has released its preliminary report and identified those petitions for 

which administrability is an issue. Due to the vetting process, the number of products for which 

administrability is the only issue precluding inclusion on the list of recommended provisions is a limited 

universe. If there is a possibility that CBP's concerns could be resolved through better drafting of 

technical tariff language and a better understanding of the product, it serves the goals of the AMCA for 

such contacts- conversations-- to be strongly encouraged and facilitated. 

Again, the MTB Carpet Group thanks the Trade Subcommittee for holding this hearing and 

drawing attention to the need for prompt enactment of an MTB. Our companies and our employees 

look forward to the duty reduction for hand-tufted wool carpets and to the benefits that will provide to 

our customers and to the U.S. economy. 

Respectfully submitted, 

Momeni Inc. 

Carlstadt, New Jersey 

Nourison 

Saddle Brook, New Jersey 

Feizy Import & Export Co. 

Dal las, Texas 

Loloi Rugs 

Dallas, Texas 

Surya 

White, Georgia 

For additional information, contact: 

Brenda A. Jacobs, counsel to The MTB Carpet Group 

202-736-8149; bjacabs@sidfey.cam 

Kaleen Rugs, Inc. 

Dalton, Georgia 

Safavieh 

Port Washington, New York 

L.R. Resources, Inc. 

Dalton, Georgia 

Kas Oriental Rugs, Inc. 

Somerset, New Jersey 

Oriental Rug Importers Association 

Tenafly, New Jersey