U.S. GOVERNMENT PUBLISHING OFFICE

57–306—PDF WASHINGTON : 2024

S. HRG. 118–470 

THE PRESIDENT’S 2023 TRADE POLICY AGENDA 

HEARING 

BEFORE THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED EIGHTEENTH CONGRESS 

FIRST SESSION 

MARCH 23, 2023 

( 

Printed for the use of the Committee on Finance 
COMMITTEE ON FINANCE 

RON WYDEN, Oregon, Chairman 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

SHERROD BROWN, Ohio 

MICHAEL F. BENNET, Colorado 

ROBERT P. CASEY, JR., Pennsylvania 

MARK R. WARNER, Virginia 

SHELDON WHITEHOUSE, Rhode Island 

MAGGIE HASSAN, New Hampshire 

CATHERINE CORTEZ MASTO, Nevada 

ELIZABETH WARREN, Massachusetts 

MIKE CRAPO, Idaho 

CHUCK GRASSLEY, Iowa 

JOHN CORNYN, Texas 

JOHN THUNE, South Dakota 

TIM SCOTT, South Carolina 

BILL CASSIDY, Louisiana 

JAMES LANKFORD, Oklahoma 

STEVE DAINES, Montana 

TODD YOUNG, Indiana 

JOHN BARRASSO, Wyoming 

RON JOHNSON, Wisconsin 

THOM TILLIS, North Carolina 

MARSHA BLACKBURN, Tennessee 

JOSHUA SHEINKMAN, Staff Director 

GREGG RICHARD, Republican Staff Director 

(II) 
C O N T E N T S 

OPENING STATEMENTS 

Page 

Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee on 

Finance .................................................................................................................. 1 

Crapo, Hon. Mike, a U.S. Senator from Idaho ...................................................... 3 

ADMINISTRATION WITNESS 

Tai, Hon. Katherine C., United States Trade Representative, Executive Office 

of the President, Washington, DC ...................................................................... 5 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Crapo, Hon. Mike: 

Opening statement ........................................................................................... 3 

Prepared statement .......................................................................................... 47 

Tai, Hon. Katherine C.: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 49 

Responses to questions from committee members ......................................... 53 

Wyden, Hon. Ron: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 81 

COMMUNICATIONS

ACT | The App Association et al. ............................................................................ 83 

American Coatings Association, Inc. ...................................................................... 86 

American Farm Bureau Federation ....................................................................... 87 

Americans for Free Trade ....................................................................................... 88 

Center for Fiscal Equity .......................................................................................... 100 

Consumer Technology Association ......................................................................... 104 

Engine Advocacy ...................................................................................................... 107 

Flexible Packaging Association .............................................................................. 110 

National Foreign Trade Council ............................................................................. 112 

Nathan’s Papers, LLC ............................................................................................. 118 

Pitts Enterprises Inc. .............................................................................................. 120 

(III) 

(1) 

THE PRESIDENT’S 2023 

TRADE POLICY AGENDA 

THURSDAY, MARCH 23, 2023 

U.S. SENATE, COMMITTEE ON FINANCE, Washington, DC. 

The hearing was convened, pursuant to notice, at 10 a.m., in 

Room SD–215, Dirksen Senate Office Building, Hon. Ron Wyden 

(chairman of the committee) presiding. 

Present: Senators Cantwell, Menendez, Carper, Cardin, Brown, 

Bennet, Casey, Warner, Whitehouse, Hassan, Cortez Masto, Warren, Crapo, Grassley, Thune, Cassidy, Lankford, Daines, Young, 

Johnson, Tillis, and Blackburn. 

Also present: Democratic staff: Sally Stewart Laing, Chief International Trade Counsel; Joshua Sheinkman, Staff Director; and 

Tiffany Smith, Deputy Staff Director and Chief Counsel. Republican staff: Molly Newell, International Trade Counsel; John 

O’Hara, Trade Policy Director and Counsel; Mayur Patel, Chief 

International Trade Counsel; Gregg Richard, Staff Director; and 

Colin St. Maxens, International Trade Policy Advisor. 

OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR 

FROM OREGON, CHAIRMAN, COMMITTEE ON FINANCE 

The CHAIRMAN. The Finance Committee will come to order. 

This morning, the committee is joined by Ambassador Tai to discuss the trade agenda for the year ahead. The Biden administration, from the get-go, had a difficult job to do with respect to trade. 

The Trump administration’s chaotic approach turned some of our 

trade rivals into outright adversaries, and many of our friends into 

rivals. Now the United States needs to kick into a higher gear with 

a smarter, more innovative approach to trade which will deliver 

real results for American workers, farmers, and businesses. 

There are certainly big issues to address. For example, China 

continues to put up barriers to American products and American 

values, while ripping off jobs, using forced labor, and undermining 

free speech. It’s a discriminatory model, and I think my colleagues 

know this, unfortunately, is spreading. Even our allies in the European Union and Canada are drafting laws intending to limit our 

digital companies’ ability to do business in their jurisdiction, while 

shielding their own companies. 

Today, I am going to briefly outline a three-part strategy to get 

more Americans back in the winners’ circle of trade. First, the administration needs to ramp up enforcement of the trade laws that 

are already on the books, and that means enforcement across the 
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board. Let us start with the USMCA. Senator Brown and I fought 

for stronger, faster-acting enforcement tools like the rapid response 

mechanism. That is part of what makes the USMCA the most prolabor trade agreement in American history. 

Ambassador Tai has used the Brown-Wyden mechanism to get 

some key wins, to stop labor violations in Mexico, and she has 

worked to help Pacific Northwest dairy farmers get into the Canadian market. Now she has to go further and enforce every provision 

of every chapter of USMCA. For example, Mexico is flouting its 

USMCA obligations by shutting out our renewable energy providers. Bad news for the economy, bad news for the environment. 

During last year’s trade agenda hearing, I asked Ambassador Tai 

to take action. The U.S. did request consultations with Mexico in 

July 2022, but 8 months have passed. American clean energy producers, our companies in the Pacific Northwest, are still waiting for 

access. In my view, it is long past time to say ‘‘enough’’ and to 

make this a real dispute settlement case. 

The administration also needs to set up enforcement beyond 

USMCA to defend American workers and businesses from unfair 

trade practices wherever they are happening. To that end, the administration has not yet brought a single case before the World 

Trade Organization. There is no doubt that the World Trade Organization needs reforms. But if you do not press your case, you are 

stuck on defense. I want to make it clear—and I think colleagues 

agree with this—the United States of America has got to play offense on international trade. 

Next, the administration needs to make opening export markets 

a priority issue. This is imperative in terms of the administration’s 

agenda. USMCA is proof that U.S. trade policy can raise the bar 

in labor and environmental standards and bust down the barriers 

to our exports. However, I have real concern that USTR is not 

doing enough to break down barriers our exporters face. 

For example, there is just old red tape preventing eastern Oregon potato farmers from shipping fresh potatoes into Japan. Oregon potatoes are the very best in the Nation, and I intend to give 

my friend Senator Crapo equal time in order to make his case with 

respect to his agricultural sector. But kidding aside, we are talking 

about an estimated $150 million market. Pacific Northwest apples 

and pears are blocked from the behemoth Australian market. Oregon wheat, upwards of 90 percent of which is exported, suffers 

from high tariffs in the market around the Pacific Rim. Vietnam 

has a litany of restrictive digital practices that hurt our startups. 

The administration ought to be taking every opportunity to fix 

these issues, but it is not even clear that USTR is discussing them 

as part of the whole effort with respect to the Indo-Pacific framework. So I want to draw a line here. The United States cannot conclude agreements with Japan, Indonesia, or the EU that leave 

issues facing our American exporters without remedies. 

Third, getting trade right is going to require creative approaches 

to new challenges. Whether it is shoring up our supply chains, promoting access to critical minerals, or addressing climate impacts of 

leading industries, smart trade policies have to be part of the solution. I am glad Ambassador Tai and her team are thinking outside 

the box. 
3 

But what is needed here are real answers on how these proposals 

are going to work in practice. The administration has to deliver 

new markets. We are talking about, say the Middle East and Africa, and trading new products, say renewable energy and digital 

services, in a way that quickly pushes the American economy forward. Meeting that challenge requires that we strategize with our 

allies and we partner with the Congress. 

That will bring me to one last point. The executive branch, in my 

view, has begun to embrace a go-it-alone trade policy, and I want 

to be clear on this point. Congress’s role in U.S. trade policy is defined by the Constitution of the United States. It is right there in 

article I, section 8. It is black letter law, colleagues, and it is unacceptable to even frame the argument otherwise. It is my expectation that Ambassador Tai and the committee can begin to charter 

a new path forward when it comes to transparency, consultation, 

and ultimately, approval of trade agreements. 

I also want to commend Senator Menendez of New Jersey for his 

leadership in the effort to promote these transparency reforms. 

Ambassador Tai, thank you for being with us today. We look forward to this discussion. 

Senator Crapo is next, who undoubtedly will have views on his 

potatoes. 

[The prepared statement of Chairman Wyden appears in the appendix.] 

OPENING STATEMENT OF HON. MIKE CRAPO, 

A U.S. SENATOR FROM IDAHO 

Senator CRAPO. Thank you, Mr. Chairman, and of course we all 

know Idaho potatoes are the best. But we like the eastern Oregon 

efforts to try to catch up. 

The CHAIRMAN. Oh, I see. The rivalry is launched. 

Senator CRAPO. Welcome, Ambassador Tai. The members of this 

committee have very thoughtful ideas to advance the trade interests of the American people. For example, just yesterday, Senator 

Young was recognized by the National Foreign Trade Council for 

his leadership on digital trade. Critically—and I know this from 

personal experience—every Senator on the committee wants to 

work with you, Ambassador, on a bipartisan basis to execute a successful trade policy. 

The challenge we face is how this administration approaches 

U.S. trade policy, both in terms of substance and policy. Substantively, the President’s trade agenda emphasizes, quote, ‘‘the 

ground-breaking domestic investments enacted through the President’s leadership.’’ Respectfully, an American trade policy cannot 

rest on massive spending on subsidies. That approach borrows 

more from China’s traditions than ours. 

American trade policy unleashes our people’s talent and productivity by removing foreign barriers through tough negotiations and 

enforcement. The potential of the American people is staggering. 

What the administration proposes as trade negotiations and an enforcement agenda is strikingly limited. A few examples are indicative. 

First, American ranchers and farmers produce the world’s best 

and safest food and exported $196 billion in 2022. They can accom-
4 

plish even more if we eliminate the high tariffs and unscientific restrictions posed as safety measures. The only tariff reduction 

flagged in the President’s agenda is that India will reduce its tariff 

on pecans to a still overly restrictive 30 percent. Instead of aggressively challenging non-science-based safety measures, the administration has only this month initiated technical consultations on 

Mexico’s biotech restrictions. 

Second, American workers are highly skilled at manufacturing, and have drawn nearly $1.9 trillion in foreign investment, including a major auto manufacturing facility in Spartanburg, SC; similarly in Smyrna, TN and Marysville, OH, to name just a few. That 

kind of investment, coupled with American workers’ talent, should 

make us an export powerhouse. 

But unreasonable product specification standards continue to 

keep our manufacturing out of many markets. Yet the administration chooses not to pursue a Technical Barrier to Trade chapter, or 

TBT, in this proposed Indo-Pacific Economic Framework, or IPEF. 

In contrast, the United States-Mexico-Canada Agreement, USMCA, 

had a robust TBT chapter and explicit commitments that Mexico 

would continue to accept U.S. cars built to U.S. Federal safety 

standards. 

Third, our innovators and artists develop lifesaving products, and 

films and music that spread American values. Copyright industries 

alone generate $1.8 trillion in economic output. Yet, instead of 

working to strengthen U.S. intellectual property rules, the administration actually waived U.S. intellectual property rights for COVID 

vaccines under the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights, or TRIPS agreement, and is 

even now considering expanding that waiver to diagnostic and 

therapeutic products. 

While we all agree that one of China’s most pernicious, mercantilist policies is the theft of American intellectual property, the 

administration does not pursue any IP rules in IPEF or elsewhere 

that could help ensure China does not benefit from its theft 

through sales to other countries. 

Fourth, U.S. digital firms are a major contributor to U.S. economic growth, with the digital economy now compromising 10 percent of U.S. GDP. The administration has yet to press the European Union, through the Trade and Technology Council, on measures that unreasonably target the U.S. digital economy, even 

though it readily agreed to discuss the EU’s concerns with the Inflation Reduction Act at the very same forum. We can do better, 

and we must do better. 

One last example. Behind me is a chart comparing the respective 

tariff rates that the American, European, and Chinese products 

face entering Vietnam, a country of nearly 100 million. You will notice there is only blue on the chart. That is the tariffs that the 

United States faces. The red and the yellow are not there because 

we ran out of ink. They are not there, rather, because China and 

the European Union have entered into agreements that have reduced the tariffs on their products in Vietnam. China and the EU 

have concluded trade agreements to reduce their tariffs eventually 

down to zero, while signature American products like automobiles, 

apples, poultry, potatoes, milk, and others will continue to face 
5 

high tariffs. While some of the tariff reductions in the EU and 

China deals will take time to phase in fully, we lose ground every 

day that we remain on the sidelines of real trade negotiations. 

Given this dynamic, the administration needs to reconsider its 

decision not to pursue market access in IPEF or other trade arrangements. Unfortunately, the ability to take on these substantive 

challenges is compounded by one very fundamental problem: the 

administration’s insufficient consultation with Congress. We saw 

this problem with the negotiation for the TRIPS waiver, and they 

still continue. In the case of IPEF, the administration refuses to 

share their views with the same congressionally established advisory committees that assist Congress in determining whether a 

proposed trade agreement will assist Americans. 

This chart shows the statute. The text of this statute is crystal 

clear, that such information must be shared with designated members of Congress. The administration also refuses to share attributions of which countries support or oppose particular provisions in 

IPEF, even though the Trump administration provided such information during the USMCA consideration. This attempt to bypass 

Congress is unnecessary. Our trade policy is strongest when the 

administration and Congress work together. 

And mirroring what Senator Wyden said, the administration 

should accordingly partner with Congress and the American people, 

not try to cut us out, because under the Constitution it cannot. 

Thank you, Mr. Chairman. 

[The prepared statement of Senator Crapo appears in the appendix.] 

The CHAIRMAN. I thank my colleague. 

Ambassador, as you and I have talked about several times, the 

members of this committee have very, very strong views on these 

issues, as you can tell. We welcome your testimony and look forward to questioning. There can be differences of opinion on these 

issues, but I think certain issues—for example, the constitutional 

imperative of this committee’s involvement—are areas that not 

only do we feel strongly about, we think are very clear. Welcome. 

STATEMENT OF HON. KATHERINE C. TAI, UNITED STATES 

TRADE REPRESENTATIVE, EXECUTIVE OFFICE OF THE 

PRESIDENT, WASHINGTON, DC 

Ambassador TAI. Thank you so much, Chairman Wyden, Ranking Member Crapo. I am really looking forward to a good back and 

forth with both of you and members of this committee, and as always, doing so respectfully, out of respect for the institutions and 

for each of you and Senators and people. Members of the committee, let me begin by affirming that Congress is our constitutional partner on trade. I appreciate the opportunity to discuss the 

President’s trade agenda with you this morning. 

Under President Biden’s leadership, this administration is writing a new story on trade, one that puts working families first and 

reflects more voices across the American economy; one that advances our global priorities and strengthens democracy here at 

home and abroad. Whether you have a college degree or not, 

whether you have five employees or 500, whether you are in rural 

Ohio or in the heart of Baltimore, whether you are a small dairy 
6 

farmer in Michigan or a steelworker in Pennsylvania, we are restoring fairness to our trade and economic system for you. 

This means vigorously enforcing existing commitments to reestablish confidence and trust in trade, and this starts with the 

USMCA, which Congress passed on a strong bipartisan basis. We 

are pressing Canada to ensure that U.S. dairy farmers are treated 

fairly finally, and we are urging Mexico to address our concerns 

with the energy sector and with agricultural biotechnology. 

On the latter, we recently requested technical consultations with 

Mexico under the USMCA, and we will continue to consider all options available under that agreement to fix this problem. 

Restoring fairness to the system also means empowering workers 

to compete fairly. We are using the USMCA’s rapid response mechanism to promote workers’ rights in Mexico, and we are seeing real 

change and success for workers and independent unions. In the 

last year, we have secured wins for workers at four different facilities. We have ongoing open cases, and we will continue to work 

with the Government of Mexico. We are also working with the European Union, Japan, Canada, and Mexico to eliminate forced labor 

from global supply chains. 

Farmers, ranchers, fishers, and food manufacturers are also key 

to our trade agenda. We have secured real wins over the past few 

years, and U.S. agricultural exports have reached a record $202 billion in 2022. We brought into force an agreement with Japan to export more U.S. beef. We signed a Tariff Rate Quota agreement with 

the EU to open markets for U.S. rice, wheat, corn, shellfish, and 

beef, and we have opened access for pork and pecan exports to 

India. We have a nimble USTR team that is opening markets, and 

we will continue to work with Congress to find additional opportunities for as many of our stakeholders, especially the small and 

medium-sized ones, as we can. 

Speaking of new opportunities, the United States is leading with 

a positive economic vision around the world, and our partners and 

our allies are joining us. The Indo-Pacific Economic Framework is 

a major priority this year, and we are making significant progress. 

This framework will level the playing field for American workers 

and businesses, create more resilient supply chains, boost agricultural exports, build an inclusive digital economy, and help businesses compete in the region. We also kicked off the Americas Partnership for Economic Prosperity with 11 countries in our hemisphere. Regionalization is an integral part of building resilience in 

the world economy. By strengthening our relationships with our 

closest neighbors, we can drive sustainable economic growth and 

bolster our collective prosperity. 

We are also deepening ties at the bilateral level. Taiwan is an 

essential partner, and our U.S.-Taiwan 21st Century Trade Initiative is moving forward. We launched the U.S.-Kenya Strategic 

Trade and Investment Partnership. We continue to work with the 

EU through the Trade and Technology Council to promote shared 

economic growth—and importantly, to coordinate our actions 

against Russia and Belarus. 

We are making progress on the world’s first sectoral arrangement on steel and aluminum trade. This will tackle both emissions 
7 

and non-market excess capacity, including from the PRC, which 

threatens American workers and businesses. 

On the multilateral front, our administration worked with WTO 

members to deliver tangible outcomes during the last ministerial 

conference, the first time in a decade, including on COVID–19 vaccines, fishery subsidies disciplines, and food insecurity. We are 

committed to transforming the institution to be more responsive to 

the rapidly changing global economy and the needs of everyday 

people. We are also taking full advantage of our APEC host year 

to build a more durable, resilient, and inclusive Asia-Pacific region. 

Another component of our trade agenda is realigning the U.S.- 

China relationship. This means making groundbreaking investments here at home to compete from a position of strength. That 

also means renewing our engagements with partners and allies to 

develop new tools to address the challenges posed by the PRC and 

its economic policies. The comprehensive 4-year review on section 

301 tariffs is a part of this realignment. We are taking a deliberate 

and strategic look at how we can serve our economic interests, in 

light of the PRC’s continued unfair policies and practices. 

Lastly but certainly not least, USTR will also continue to implement our equity action plan and work with the U.S. International 

Trade Commission to better understand the distributional effects of 

trade on American workers. 

I want to close where I started. Congress is our constitutional 

partner on trade. The success of our initiative depends on a robust 

partnership with all of you. Since last year’s trade agenda hearings, USTR has held over 380 congressional consultations, including more than 80 on IPEF alone, and your feedback has been incredibly helpful in informing our work. I have also heard your concerns about Congress’s role on trade and transparency with the 

public, and I have asked my team to make further enhancements. 

That includes making it easier for congressional staff to review our 

negotiating texts, releasing public summaries of that text, and 

holding public stakeholder meetings, especially with groups who 

traditionally have not been involved in the process. Moving forward, I will continue to work hand in hand with members of Congress, their staff, and the public to develop effective trade policy together. 

I look forward to continuing this work in the year ahead. Thank 

you very much, Mr. Chairman. 

[The prepared statement of Ambassador Tai appears in the appendix.] 

The CHAIRMAN. Thank you, Ambassador, and I think we are 

going to have a good discussion. 

I have been seeing news reports, Ambassador, that as part of the 

Inflation Reduction Act implementation, the administration is looking at negotiating critical mineral agreements with Japan and the 

European Union. I understand that these negotiations may be finished soon. So I want to begin today with the question, will your 

office make these agreements public before they are signed? 

Ambassador TAI. Well, Chairman Wyden, I hope you are relying 

on more than news reports, because we have also been briefing 

your staff very intensively, and very recently as well, on our efforts 

here. You are right that we are engaged in negotiations with the 
8 

European Union and Japan, and the substance of what we are 

talking about, we have also taken great pains to make available to 

members of your committee and to their staffs. In terms of—— 

The CHAIRMAN. Respectfully, Ambassador, telling the staff is not 

the same thing as telling the American people. And one of the reasons I say that is I do all these town meetings, go to every county 

every year, because it is about building trust and confidence. So it 

is helpful that there are discussions at the staff level, but if you 

walked into a town hall meeting in rural Oregon and said that the 

people who find out are the staffers but not them, they will say 

‘‘uh-uh.’’ We are the people who give you all on that committee an 

election certificate. 

So the question is, will the American people know what is in a 

minerals agreement before it is signed? 

Ambassador TAI. Well, Senator Wyden, you and I also have a responsibility to the American people, and you and I have also talked 

about these negotiations. To the extent that you are comfortable 

sharing with your constituents what we have talked about, I would 

also be comfortable sharing with your constituents what we are 

talking about. 

The CHAIRMAN. I still am trying to get an answer to my question. 

I want to be clear, to me, what I believe transparency is all about. 

First, your office needs to release detailed publicly available negotiating objectives before discussions start with foreign governments, 

and to just hear about it in the news or have staff discussions is 

not the same thing. The people up here get election certificates. We 

need to make sure that there are detailed negotiating objectives before negotiations start. 

Second, Congress and the public need a chance to vet trade 

agreements before they are signed. In the TPA, I pushed hard to 

ensure trade agreements were public for 60 days before signing. 

Finally, Congress needs a final say on any of these agreements. 

Do you support those transparency standards? 

Ambassador TAI. Well, Senator Wyden, as you know, because you 

have been involved in trade policy for a long time as a member of 

this committee and also Ways and Means when you were a House 

member—— 

The CHAIRMAN. I was not on the Ways and Means. 

Ambassador TAI. Oh, you were not on Ways and Means. Well, 

you have been here for a long time, long enough to be chairman 

certainly, and I know how much you care about trade. Yes, I care 

deeply as well about transparency. I know that this is a core principle and value of yours, and I have committed to you to work with 

you on bringing transparency to our trade practice. 

I hope that you will recognize that we have taken steps forward, 

including, as you have acknowledged, in our work with Senator 

Menendez over the course of the past year. You also know that in 

terms of USTR’s day-to-day work, everything that we do on a daily 

basis is some form of a negotiation and some form of an enforcement activity. 

With respect to TPA, those were guidelines that applied to a very 

specific set of negotiating projects, and as you know, we have been 

in close consultation with you and your staff about the guidelines 

that USTR continues to adhere to, which are very similar if not go 
9 

further than the guidelines that were memorialized now 8 years 

ago. 

The CHAIRMAN. I want to make clear so everyone on this committee knows how strongly I feel. I think minerals agreements, 

critical minerals agreements, ought to be made public before they 

are signed, and we will continue to stress that with the administration. 

One other question really quickly, and that is about helping 

American exporters. We have got to compete with China. We all 

understand that. The Internet is the ball game for small business. 

Senator Cardin chairs the Small Business Committee. We want to 

make sure that red, white, and blue American products can get all 

over the world, and too many of our trading partners put up barriers to our exports, exports for example in the digital area, but 

plenty of other areas as well. 

So our small businesses want to be able to export using digital 

trade. We want to help them do that. What are you all doing at 

your office to attack these digital trade barriers abroad that rip off 

small American companies in particular? 

Ambassador TAI. Well, Senator Wyden, I want to go on the 

record and affirm my commitment to a pro-competition digital 

agenda, and in terms of what we are doing, as you know, we are 

negotiating digital terms and rules in our trade negotiations in 

many different contexts, including in the Indo-Pacific. This is an incredibly important area and also an area that is new to trade negotiations around the world, and also one where we want to take 

sure-footed steps because there is a lot of debate and legislative activity up here in the Senate and the House on our own domestic 

regulations. 

The CHAIRMAN. My time has expired. I just want again to express my concern about where things stand as it relates to helping 

American exporters. I continue to read these news reports that 

Indo-Pacific provisions on digital will not remove the barriers that 

our companies face, particularly small businesses. We have been 

clear about where we want to go. We want to use the standards 

from the USMCA. Those were the toughest, smartest digital rules. 

I hope that they will be used in future administration efforts. 

Senator Crapo? 

Senator CRAPO. Thank you, Mr. Chairman. 

Ambassador Tai, the administration has not yet responded to 

this committee’s letter of December 1st, signed by 20 members of 

this committee, noting that IPEF agreements need to be approved 

by Congress. Many of us are assuming that means the answer to 

the question is ‘‘no.’’ But could you clarify to me: is it the administration’s position that you will enter into IPEF agreements without 

submitting them to Congress? 

Ambassador TAI. Well, Senator Crapo, my first turn of the head 

was to check on the status of our response to that letter. We take 

our congressional correspondence, as part of our consultations to 

the Congress, extremely seriously. So let me just first update you 

on the status of that letter. We have addressed—it was a letter, I 

believe, that was addressed to both myself and to the Commerce 

Department. Our draft has gone over to the Commerce Department, and I hope that you will receive the finalized letter soon. 
10 

With respect to the congressional-executive partnership on trade 

and negotiations, and including on the Indo-Pacific Economic 

Framework, let me just reaffirm again my commitment, to this 

committee in particular, of the need for robust partnership in shaping these negotiations. With respect to what happens with the results of those negotiations, we are following the precedent of established USTR practice in terms of the types of agreements that 

come to Congress. There are legal requirements here, but I do 

hear—and I want to affirm for all of you while we are all here together in person, that I do hear the concerns of the members of this 

committee. I commit to working with you to see how we can address those. 

Senator CRAPO. Well, I did not get a clear feeling from your answer that the answer to our question and our letter was ‘‘yes.’’ So 

I will be looking very carefully for a prompt response to the letter 

that we have sent to you. 

To date, we have not heard of an IPEF enforcement mechanism, 

including with respect to agriculture. Accordingly, it is critical to 

see compliance happen before any agreement is finalized, especially 

if it seeks to bypass Congress, to ensure that the commitments are 

respected. 

Does the administration agree that before any IPEF agreement 

is finalized, the United States should see a number of existing 

trade irritants—particularly with regard to agricultural barriers 

that are inconsistent with proposed IPEF commitments—eliminated? For example, among those issues, I would include ensuring 

that Japan allows market access for all fresh potatoes, both eastern 

Oregon potatoes and Idaho potatoes—— 

The CHAIRMAN. The rivalry continues—— 

Senator CRAPO [continuing]. Including table stock potatoes. What 

is your position on that? 

Ambassador TAI. Senator Crapo, I know how important potatoes 

are to this committee, not to just the chairman and the ranking 

member, but I know that Colorado has potatoes as well. Mr. Bennet is not here to speak on behalf of Colorado potatoes. Look, I 

would be delighted to raise the potato issues with our partners in 

Japan, through our bilateral channels, through our multilateral 

channels regardless—— 

Senator CRAPO. Well, my question went beyond potatoes, and it 

went beyond just raising the issue. It was: will we have assurance 

that these barriers to trade will be fixed before an IPEF agreement 

is reached? 

Ambassador TAI. I think what we need to do is continue to acknowledge and recognize where the world economy is today, where 

and why we have designed the Indo-Pacific Economic Framework 

to be the way that it is. You are right: tariff liberalization and tariff reductions are not a part of this negotiation. Nevertheless, what 

we are doing is bringing together critical partners in the region to 

improve the interoperability and compatibility between our economies. 

So I see that I am running down your clock, but let us continue 

to talk about this. Again, the agricultural barriers, the interests of 

our farmers, ranchers, agricultural producers are a top-line priority 
11 

for our trade agenda, and I will be looking for opportunities to fix 

those problems in any context that I can. 

Senator CRAPO. All right. I do not think I got the commitment 

I wanted, but we will continue this discussion. 

The CHAIRMAN. It will definitely continue. 

Senator Grassley is next. 

Senator GRASSLEY. I do not understand your equivocation over 

whether or not these agreements ought to be submitted to Congress, because the Constitution is pretty clear that the power to 

regulate interstate and foreign commerce is a constitutional power. 

So, if you are not going to submit these to the Congress for consideration, it either comes from the laws that we have delegated to 

the President to do in the interstate commerce what we ask him 

to do, because Congress is not an institution that can do it, or you 

have to have some constitutional power to do it. 

Now, I do not want to have that discussion with you, but I want 

you to know my opinion on that. When you were in Iowa, you 

heard about how concerned Iowa farmers are about Mexico’s ban 

on biotech corn. I was glad to see USTR take action with technical 

consultations. It is now over 2 years since Mexico first published 

its decree. This seems to be an easy one, and that’s why we included the dispute resolution process in USMCA. 

With over 90 percent of the corn production in the United States 

planted with biotech seeds and Mexico being the number one purchaser of U.S. corn, farmers deserve a sense of urgency from your 

administration on this. Now, after 2 years and consultation, you 

put in place this first step that it takes to get the agreement going, 

and I thank you for doing that, and you did it very timely. 

Now, after you said that all options are on the table when you 

had your opening statement, there is only one option, and on April 

the 7th—that is, after 30 days—I would expect you to file a formal 

dispute settlement. Are you going to do that? 

Ambassador TAI. Well, Senator Grassley, you speak on this issue 

loud and clear, and I hear you in terms of your expectations. We 

are in the process of the technical consultations. And just to be 

clear about what technical consultation means, that means sitting 

down at the table with Mexico and pressing Mexico to come forward with the scientific basis for the aspects of its decree that impact our biotechnology agricultural exports. 

So, Senator Grassley, I will keep you apprised of how the current 

consultations are going, but you are absolutely correct about rules 

under the USMCA, and that 30 days after the filing of the technical consultations, we have the option of moving forward. Let me 

stay in very close contact with you about next steps. 

Senator GRASSLEY. Well, if you do not let the Mexican Government know right now that you are going to institute that, you are 

going to continue these conversations for the 2 years that they 

have already gone on, and they are never going to end. You have 

a process that has an end to it, and that process needs to be instituted, and it needs to be instituted on April the 7th. We have been 

talking for 2 years. 

Ambassador TAI. You are absolutely right that we have those 

tools for a reason, and I assure you that it is not my intention to 

allow this to go on indefinitely. 
12 

Senator GRASSLEY. On to another matter. In your testimony, you 

mentioned that your agency will monitor the practices of other 

trading partners to ensure U.S. agricultural products are not subject to unfair, unjustified, and discriminatory restrictions. Last 

month, I led a letter with nine other Senators around President 

Biden’s meeting with the president of Brazil. 

Just a week prior to that meeting, Brazil reinstituted a 16- 

percent tariff rate on U.S. ethanol. While Brazil may want more 

sugar access, they already have access to the U.S. with duty-free 

ethanol imports that qualify for renewable fuel standards in California’s low-carbon fuel program. This is unfair, it is unjustified, 

and yet President Biden made no mention whatsoever that I know 

of about the new tariff when he had the chance. 

So, I am happy that you are focused on a worker-centric trade 

policy. Then can you work with me to end the unjustified increase 

in U.S. ethanol tariffs? 

Ambassador TAI. I would be happy to. I also would like you to 

know that I was in Brazil 2 weeks ago, and that my Chief Agricultural Negotiator will also be following up on this particular issue, 

and I most certainly did raise this on my trip to Brasilia. 

Senator GRASSLEY. In regard to whether or not you are going to 

have free trade agreements or not—and I do not understand why 

those three words are something that the administration never 

wants to utter—but you are talking about having certain talks with 

Kenya, the UK, and a couple of other countries, and you call them 

robust discussions. Robust discussions are not good enough. So my 

last question is, do you plan to pursue concrete market access commitments in any of the frameworks and initiatives that you are 

pursuing? 

Ambassador TAI. So, Senator Grassley, I would like to take this 

opportunity to say that I remain, and we remain, open-minded 

with respect to the more traditional approach to trade agreements. 

However, with respect to each individual partner that we negotiate 

with, and with respect to the U.S. economic and world economic situation, we want to make sure that our trade policies are tailored 

to the needs of the relationship and the needs of our economies. 

At this moment, we do not have tariff liberalization negotiations 

going on with a partner. However, I want to indicate to you that 

I remain open-minded, that when it is fit for the partner and the 

times, that we are happy to do the right thing by the U.S. economy. 

Senator GRASSLEY. Thank you, Mr. Chairman. 

The CHAIRMAN. I thank my colleague. 

Senator Cardin is next, the chairman of the Small Business Committee. 

Senator CARDIN. Well, thank you Mr. Chairman. Madam Ambassador, I want to start by thanking you for the openness that we 

had in our personal communications. I did serve on the Ways and 

Means Committee before coming to the Finance Committee. I could 

not get on the Commerce Committee, so I had to go to the Ways 

and Means Committee. But I do appreciate the availability of meeting with you and your staff, to go over a lot of the issues we have 

in our State and our concerns about our trade policies in this country. 
13 

But I just really want to underscore the concerns I have moving 

forward. We have gone through the transition of Congress delegating to the executive branch trade policies, and we went through 

a transition and came to Trade Promotion Authority as a way in 

which Congress could direct the administration on the priorities 

that they need to achieve in trade agreements and the consultation 

process, with the ability to approve trade agreements by the fasttrack authority. 

That was thought to be the proper way for us to be able to get 

our input. It took me many years to be able to get, as a principal 

trade objective, good governance and anti-corruption issues and to 

deal with enforcement mechanisms, and now, as chair of the Small 

Business Committee, to deal with small business issues. And we 

have had success through the negotiations and the passage of the 

Trade Promotion Authority to get that type of direction to trade 

agreements. 

What worries me now is, we are going down a path in which you 

are using these framework agreements, bypassing the formal relationship with Congress, and it may be difficult in future administrations. We saw the previous administration do a lot of initiatives 

that we thought went over the edge, and now we see this in the 

Biden administration. 

So for those of us who are concerned about Congress directing 

the trade objectives, the principle objectives of our trade negotiations, that is being very much diminished by the process as you are 

going forward. So I will ask you specifically on the areas of my priorities, how do I assure good governance, anti-corruption protection 

for small businesses and enforcement of those issues? 

The problem with good governance is, you can get all the commitments you want from a country, that they are going to do all 

these good things on anti-corruption. We then enter into the framework, they do not do it, and there is no enforcement, because you 

do not have any trade sanctions that you could impose, which are 

the way that we enforce these agreements. Can you ease my concerns about where we are heading as far as being able to direct our 

trade policies to congressional objectives? 

Ambassador TAI. Certainly. Senator Cardin, I know that you 

have been a leader in all of these areas within the trade agenda, 

and I want to commend you, in large part because I share the respect for how important these are, economically and also in the 

larger picture as well. 

So let me begin by pointing out then, in each of the active negotiations that we have going, anti-corruption, good governance, 

small business promotion, bringing small businesses into the formal economy, into the international economy, are highlighted objectives in areas where we are actively negotiating. On your question 

about the enforceability, here I also want to commit and make very 

clear that in my entire career, because of all the work that I have 

done, I know that for our members of the Senate and House, for 

the American people, for our economy, what we negotiate has to be 

more than just words on a page, that it has to be meaningful. 

And so, in our new initiatives, which are structured very differently, we are going to have to bring a new approach to enforcement, enforceability. We are going to have to look at different car-
14 

rots and sticks. I commit to working with you and your team and 

the others on this committee to innovate in this area and our trade 

practice as well. 

Senator CARDIN. Well, I look forward to those discussions, because we are trying to figure out how we can help in that regard. 

Enforcement is going to be critically important. In a traditional 

agreement, there is an enforcement mechanism that leads, ultimately, to significant economic sanctions if the provisions are not 

carried out. It is difficult to see how that is done in a framework 

agreement. So I look forward to those discussions. 

Thank you, Mr. Chairman. 

The CHAIRMAN. I thank my colleague. Next is Senator Menendez. 

And colleagues keep coming in, so we are going to try to tell people 

how they can make the best use of their time. 

Senator Menendez is next. 

Senator MENENDEZ. Thank you, Mr. Chairman. 

Ambassador, I have been hearing from many New Jersey businesses about the importance of GSP, which Congress has unfortunately failed to renew since it expired in 2020. In the past 2 years 

alone, GSP expiration has cost importers in my State an estimated 

$120 million, with national impact being estimated to be over $2.3 

billion. What have you been hearing from businesses about the importance of GSP renewal? 

Ambassador TAI. Senator Menendez, I also hear from businesses 

that have made use of the GSP program that they would very 

much like for it to be reauthorized. 

Senator MENENDEZ. Yes. Well, it is not just important because 

of the cost savings for American businesses. It also helps reduce 

our reliance on China, by making it more cost-effective to import 

from low- and middle-income countries. Would you agree that GSP 

renewal is also a way to incentivize businesses to diversify their 

imports away from China? 

Ambassador TAI. Senator Menendez, what you have described 

makes a good amount of sense to me. I also would just take GSP 

back to its roots, which is that GSP is a fundamental part of our 

trade and development program, and a main part of the GSP objectives also is to stimulate and foster economic development with our 

developing country partners. 

Senator MENENDEZ. Well, I agree, and I hope that renewal and 

retroactive relief can be one of the priorities for the committee. 

Now, one of the great privileges that we afford any country is 

preferential access to the U.S. market. There is a long list of governments that want a free trade agreement with the United States. 

When I was in Ecuador, I heard very much from the Ecuadorians. 

They unfortunately missed out because their previous President 

had a different view of the United States. 

This one is aligned with us, but at the time that the countries 

in the region got a trade agreement, they were excluded by their 

own actions. Yet we offer this benefit to a limited number of countries that are willing to meet our standards, and that share our 

commitment to democratic values. For this simple reason, I believe 

we cannot ignore when one of our free trade partners, specifically 

Nicaragua, becomes a brutal dictatorship. 
15 

This month a United Nations investigative team concluded that 

Nicaragua’s Ortega regime was responsible for crimes against humanity. In describing these atrocities, one U.S. investigator equated Ortega’s abuses to crimes committed by the Nazi regime in Germany. A week later, Pope Francis similarly linked the brutality of 

the Ortega regime to that of Hitler’s dictatorship. I do not take 

those similarities very lightly. I think when they are used, you 

really have to think about when you use them, but they did. 

These shocking characterizations underscore the urgency of ending a business-as-usual approach with Nicaragua. Do you think, 

Ambassador, the Ortega regime deserves preferential access to the 

United States market? 

Ambassador TAI. Senator Menendez, I think this has been a topic 

of broader administration deliberation and concern. I think you are 

absolutely right. When regimes turn, we have to reconsider how we 

treat them across the board, and it has been a question for us as 

well around how to respond accordingly. 

Senator MENENDEZ. Well, I cannot think of any other dictatorship, specifically one committing crimes against humanity, that we 

willingly provide duty-free benefits to. So I look forward to working 

with you and the administration to suspend Nicaragua’s market access under CAFTA. It is just absolutely outrageous. 

Finally, I want to thank you and your team for the diligent work 

in negotiating the U.S.-Taiwan Initiative on 21st Century Trade. 

Taiwan is a key trading partner with whom we have a strategic relationship that is intimately intertwined with our economic security, particularly as it relates to the trade in semiconductors. It is 

a model global citizen, a key stakeholder in the Indo-Pacific economic community, and a vibrant democracy that respects the rule 

of law. 

As you approach the end of the negotiations, what is your plan 

for submitting an agreement to Congress for approval, so that businesses in the United States and Taiwan have certainty that the 

agreement that you are currently negotiating will set durable 

standards into the future? 

Ambassador TAI. Well, Senator Menendez, let me also refer to 

the work that we have done together on transparency, and I would 

note that I think it was last week that we published publicly, public summaries of the proposals that we put forward in our first 

round of negotiations with Taiwan. 

Let me say this. I agree with you across the board in terms of 

how you have described our economic and strategic relationship 

with Taiwan, and I also want to be clear with all the members of 

this committee that when the members have spoken here, Senators, also House members, on supporting Taiwan’s economy, we 

hear you. We are thinking about how we can make this relationship, using our economic tools, as strong as possible. 

With respect to the parts that we are negotiating right now, let 

me continue to stay close with you and members of this committee 

on our progress, and take up your question in that context. 

Senator MENENDEZ. I look forward to hearing that, and I would 

be happy to work to find the appropriate mechanism to effectuate 

whatever agreement that you may come to. 

Thank you, Mr. Chairman. 
16 

The CHAIRMAN. I thank my colleague. 

Senator Bennet? 

Senator BENNET. Thank you, Mr. Chairman. Thank you, Ambassador Tai, for your service and for being here today. 

Ambassador Tai, I wanted to talk about a subject that I think 

has received less attention than it should have, and that is the 

Uyghur population in China. The GDP of Xinjiang is about $260 

billion, roughly the size of New Zealand’s economy. The region produces about 90 percent of China’s cotton and over 20 percent of the 

world’s cotton. About 20 percent of all cotton clothes on American 

store shelves have fiber from Xinjiang. 

Almost half the world’s polysilicon comes from this region, which 

is one more reason we have to strengthen our domestic solar manufacturing. And I for one am very pleased that this administration 

is the first one, really since Ronald Reagan was President and 

outsourced everything to Southeast Asia, to start bringing something back to the United States. 

All of these consumer products and solar products are happening 

on the backs of over a million Uyghurs who are imprisoned in 

forced labor camps. There are numerous reports of torture, of sterilization, of people being placed under 24–7 surveillance, with every 

move and every utterance monitored by the CCP, including in their 

own homes. That is what is happening in Xinjiang, and there are 

still many American companies that are operating in the region. 

I recognize that we passed the Uyghur Forced Labor Prevention 

Act, which is now law. But I remain concerned about American 

businesses and other multinational companies with supply chains 

that run through the region. So, Ambassador Tai, I would ask you 

to tell us what you would say to American companies that continue 

to operate in China or elsewhere with supply chain exposure to the 

Uyghur region, and what do you say to our global allies and partners about the importance of not enabling the Chinese Government’s systemic oppression of the Uyghur people? 

Ambassador TAI. Thank you for your question, Senator Bennet. 

We have had a lot of conversations with American businesses about 

this, and I appreciate that, for a long time, we did not pay attention to where our supply chains went, and how the supply was 

being produced. But today in 2023, given all the challenges that 

our world economy is facing, these are critical questions we have 

to ask, especially when it comes to building a world economy that 

is not premised on the exploitation of our fellow human beings. 

In conversations with business, I understand and appreciate that 

they may not know, and often that they do not know how far their 

supply chains go or what the answers are in terms of who is producing and under what conditions. But the issue is that they have 

the responsibility to know, and in terms of working with our trading partners, eliminating forced labor from global supply chains is 

something that we cannot do alone. It is something that we must 

all work together to do. 

I have been getting very good cooperation and collaboration with 

the European Union, Japan, Canada, as well as Mexico. We are 

galvanizing efforts to make progress in this area. We have the 

UFLPA. A lot of our partners are working on due diligence legisla-
17 

tion, exactly to put the burden on their businesses to know who is 

in their supply chain and how their supply is being produced. 

Senator BENNET. Well, I would encourage you to continue that 

work, to galvanize that effort, and I will turn, with the remaining 

moment that I have, to other work that you are doing in the name 

of regionalization, which you talked about earlier today. I am deeply concerned about China’s growing influence across Latin America 

and the Caribbean. 

China is South America’s top trading partner. It is South America’s top trading partner, and a major source of both foreign direct 

investment and lending in energy and infrastructure, including 

through the Belt and Road Initiative. Last year during this hearing, I asked you about the opportunities you saw with our own 

trade policy to improve relations with key economies in the Western Hemisphere. 

Since then, the Biden administration announced the Americas 

Partnership for Economic Prosperity back in June, and you held its 

first ministerial, I think, this past January. How could our trade 

policies help us either reshore or ally-shore critical supply chains 

away from China, especially those that run through the Uyghur region, but others as well that may have for the last 30 years or so 

felt that that was the right place, but now maybe have the opportunity here? 

Can you talk about specific opportunities that you are targeting 

with our allies and partners across the Western Hemisphere and 

in this region, about what some of the opportunities are and some 

of the obstacles you are facing? I am out of time, but I will bet you 

the chairman will give you 30 seconds to answer. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Yes. 

Ambassador TAI. Thank you both. Yes, the Americas Partnership 

is an engagement that we at USTR are partnering with State on, 

precisely to bring an economic engagement to our own neighborhood that is regionally based. In the Latin America region and in 

the Western Hemisphere, we actually have the most existing FTAs 

that we have in any region. 

So you will see that of the 11 partners included—that is us and 

10 other partners—with eight of them we already have FTAs, but 

that is not a limiting factor in participating in the Americas Partnership. We have two with whom we do not have an existing FTA. 

I have looked at the trade statistics. I know what you are talking 

about. 

Our partners in our own neighborhood nevertheless tell me that 

we are their most important trading partner, and the task for us 

is to work with those partners, but also to work with Congress on 

enhancing those relationships and bringing that regional prosperity 

that we have been wanting for a very long time and continue to 

aspire to. 

The CHAIRMAN. I thank my colleague. 

Senator Cantwell is next. 

Senator CANTWELL. Thank you, Mr. Chairman. Ambassador Tai, 

good to see you. Thank you for your hard work. 

I wanted to raise a couple of issues. First, we have raised issues 

with you about the incredible tariffs in India on our apples, and 
18 

you raised the concerns with Minister Goyal, and we appreciate 

that. Washington exports to India have declined quickly after they 

placed retaliatory tariffs in June 2019. So the market declined from a $120-million market to a $3- 

million market in 2022. We raised these issues with Prime Minister Modi earlier this month, and I guess, not to my surprise but 

to my great interest, he said the U.S. and India should consider a 

free trade agreement or something similar to what they did with 

Australia. 

So I hope that you could respond on what you think we should 

do next. My colleagues here brought up the general GSP issue. I 

want to know if you are thinking about India as—all I know is that 

the retaliatory tariff environment is hurting our farm economy, and 

we need relief. 

Ambassador TAI. Senator Cantwell, I agree with you entirely. 

Thank you for raising these issues directly with Minister Goyal and 

with the Prime Minister himself. I have ideas that my team and 

I are working on. We would like to follow up with you. I agree with 

you that GSP is relevant here, and that there is a lot more work 

that we can do to tap the potential in this relationship, which we 

have struggled for years to be able to tap. 

But let me just start by saying ‘‘thank you’’ for the work that you 

have done here. I look forward to continuing to partner with you, 

whether tag-teaming or doing things even more jointly to improve 

this situation. 

Senator CANTWELL. Great; thank you so much. 

The Indo-Pacific Economic Framework—as you know, I am a 

strong proponent of opening of markets for U.S. companies, from 

agriculture to high-tech. I would be interested in hearing more 

about how this negotiating platform can be used to address trade 

barriers. 

One specific thing, even though we are a close partner with 

Japan and have great trade relationships, there is one sector where 

I feel like we are facing types of non-trade barriers. For example, 

I am told that Sony controls a monopoly of 98 percent of the highend game market, yet Japan’s Government has allowed Sony to engage in blatant anticompetitive conduct through exclusive deals 

and payments to game publishers—establishing games that are 

among the most popular in Japan—not to distribute the games on 

other platforms. 

And so, Japan’s federal trade commission has failed to investigate these exclusionary conducts. So what do you think we can 

do to more address these issues and create a level playing field 

with the IPEF on something as important as this issue? 

Ambassador TAI. Senator Cantwell, the Indo-Pacific Economic 

Framework provides us with a lot of opportunities, and I think you 

are absolutely right that the economies that we are engaging with 

right now are all focused on expanding participation in their economies and looking at trade policies that also promote and support 

competition. 

So we have that particular outlook. We also have an ongoing digital negotiation as well. What you have described is something that 

I expect may very well come up in the intersection of those two perspectives, being pro-competition and also engaging on the digital 
19 

economy. That is absolutely an area that we are primed to address. 

This one is new for me, but let me take this back, and I am happy 

to follow up with you and your team on this. 

Senator CANTWELL. If they were blocking access, that would be 

of great concern, yes? 

Ambassador TAI. If they were, or are they? 

Senator CANTWELL. If they—well, I am saying they are, but you 

said you were looking into it. I just want to make clear you view 

this as a problem. 

Ambassador TAI. Yes. I think monopolistic behavior is something 

that is a drag on economic growth and development. 

Senator CANTWELL. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. I thank my colleague. 

I believe Senator Cassidy is next. 

Senator CASSIDY. Thank you, Mr. Chairman, and, Ambassador, 

thank you for the meeting yesterday. I appreciate it. 

In the past, I have asked you about shrimp. To cut to the chase, 

the EU puts phytosanitary standards upon Indian shrimp, and a 

lot of those shrimp fail, and so India then dumps them on the U.S. 

market. They subsidize, et cetera. So we are getting stuff that 

doesn’t pass European phytosanitary standards, that is subsidized, 

that is dumped onto our market, and my shrimpers are hurting, 

among many other problems that they have had in recent years. 

In the past, you have mentioned you have raised this, but it still 

seems to be an issue. Other agencies such as the FDA are addressing this. Can you speak to what USTR is doing? 

Ambassador TAI. Senator Cassidy, I suspected that you were 

going to raise shrimp, and so I wanted to come as prepared as I 

could be. We continue to raise this concern with India. I actually 

just had an exchange with Senator Cantwell about her concerns 

with respect to apples and other aspects of our agricultural trade 

with India. 

On this, what I would say is, I will commit to you that I will continue to raise our concerns, and that I will also work with you as 

closely as I can, to continue to try to find ways to tap the potential 

in the U.S.-India relationship, including around some of these 

thorny agricultural barriers that we face. 

Senator CASSIDY. May I? There is nothing like a hanging to 

sharpen a person’s mind, as Samuel Johnson said, and there is 

nothing like a tariff to suddenly dislodge a barrier. Is it time to review the tariff schedule on the shrimp that is coming from India, 

and why do we not? 

Ambassador TAI. Senator Cassidy, I will take that as a suggestion and a request, and let me just say that I have noted it. 

Senator CASSIDY. Let me ask as well—Mexico under USMCA, 

they are supposed to be treating our energy producers similarly to 

their domestic. It is clearly not happening, with specific incidences 

of where the Mexican Government is clearly discriminating against 

our energy producers. Can you kind of address those issues and 

how we are trying to get the Mexican Government to live up, not 

only to the spirit but the actual letter of USMCA? 

Ambassador TAI. I would be glad to do this as well, because this 

is a really important issue for our economy, and it is also a really 
20 

important challenge that we have in our relationship with Mexico, 

which is longstanding and close. So, as you will know, last July we 

requested consultations with Mexico regarding various of its energy 

measures. We have met with over a dozen companies and industry 

groups to discuss the issues they face. 

Last August and also September, we held consultations with 

Mexico, also in cooperation with Canada, which is also raising its 

concerns with Mexico. From December to February, the United 

States, Mexico, and Canada have engaged in a series of sessions to 

discuss specific concerns raised in the consultations request. We 

are engaging with Mexico on specific and concrete steps that Mexico must take to address the concerns set out in our consultations 

request. In addition, we also expect ongoing monitoring and discussions between the U.S. and Mexico on these issues. This is still 

very much a live issue. 

Senator CASSIDY. And what do we have to leverage their cooperation? 

Ambassador TAI. Well, I think that a large part of it is Mexico’s 

own self-interest in terms of the strength of its energy market, and 

the integration of that market in the North American—— 

Senator CASSIDY. But they seem to have a kind of nationalistic 

viewpoint, in which they are willing to sacrifice efficiency and tolerate corruption in order to have the pride of owning their own 

business. This seems to be an ideological viewpoint; in which case 

it seems like it has to move beyond their apparent self-interest and 

to something which is living up to the letter of the law. Does that 

sound right? 

Ambassador TAI. Let me just say that all sounds right to me, and 

we know that all of the tools in the USMCA are there for a reason. 

Senator CASSIDY. Okay. 

And lastly, just to build upon our conversation yesterday, just 

any thoughts as to how we can reset or rebalance our trading relationship with China, seeing how they are not enforcing baseline environmental rules? They are polluting the international commons 

with pollutants flying over into Oregon and other west coast States 

but lowering their cost of manufacturing and incentivizing our 

manufacturing to move there, hurting our workers. 

Ambassador TAI. Senator Cassidy, yes, absolutely. Every single 

day on this job I am thinking about China in one way or another, 

in terms of our footprints in the global economy and in terms of 

how we relate to each other to bring about a better version of 

globalization. I know that you are a leading thinker on economic 

policies and tools that we could bring to bear. 

I am very interested in continuing to work with you on those 

items, and in terms of the way that you see the competition and 

the way that you think about how we need to move beyond past 

practices and tools, and to evolve and bring about new ones. I look 

forward to continuing this conversation with you and to working 

with you. 

Senator CASSIDY. Thank you, Madam Ambassador. 

I yield. 

The CHAIRMAN. I was only smiling, Ambassador, because on this 

committee, there are lots of Senators who believe that they are 
21 

being big economic thinkers too. So I just wanted to stick up for 

them. 

Senator Tillis? 

Senator TILLIS. Thank you, Mr. Chairman. Ambassador, I first 

want to start by saying that I agree with Chair Wyden and the 

concerns of my colleagues about transparency. I think the lack of 

collaboration with the American public—and even more importantly the Congress—on trade-related activities is, let us say unwise. I also believe, and correct me if I am wrong, that the USTR 

has tried to assert classified privileges on documents that do not 

contain classified material, in an effort to require SCIF access and 

limit accessibility. That seems to be counter to the idea of transparency. 

Correct me if I am wrong on that, but I have a more basic question. As you are negotiating some of these agreements, it would 

seem to me that you would need to tell the negotiating partner that 

these agreements may only be valid for 18 months, depending upon 

the outcome of the presidential election, or 6 years. Because, like 

the JCPOA and other things that I think would have done well by 

going through a treaty ratification, they go the way the winds blow. 

And we see how winds blow on trade policies. TPP was on the 

brink of being signed, which I think would have been far superior 

to the Indo-Pacific Economic Framework, and then the two candidates at both ends of the aisle used their opposition to TPP to 

pretty much end those negotiations back in that presidential cycle. 

So why would anybody on the other side of the agreement think 

that these unilateral agreements that are skirting Congress—likely 

to be subject to lawsuits after an injured party asserts that the administration has gone beyond its constitutional authority—why 

should they look at these as something that could have enduring 

quality and value? 

Ambassador TAI. Well, Senator Tillis, let me begin by addressing 

part of your lead-up to the question around classification of documents. And I want to let you know, if you do not already, that in 

some of the materials and documents recently, we have made a 

point of not classifying them so as to facilitate access to them. 

Senator TILLIS. Well, that is great. So there would be no requirement for any briefings related to this that would require us to be 

in a classified setting going forward? 

Ambassador TAI. No, that is not what I said. But what I wanted 

to make clear is that we are doing everything we can to not bring 

an ideological approach, with a view of transparency and to be as 

forthcoming as possible. 

Senator TILLIS. I want to move on to some detailed questions. 

Ambassador TAI. But let me just also make a point—— 

Senator TILLIS. What about the staying power and enduring 

value of these agreements? 

Ambassador TAI. Yes. The durability of our trade engagements 

with our trading partners and with all of you motivates almost everything that we do every single day. The TPP example is paramount, and so I want to make clear that with respect to the concerns that I am hearing up here, it is—I completely respect the 

concerns around whether or not and when the Congress gets a 

vote. 
22 

But I also want to make it very, very clear that we are leaning 

very hard in consultations with Congress so that there are no negotiations that we are doing that are significant, that you do not 

know about. 

Senator TILLIS. Okay. I will take that at face value, because I 

want to ask a few more detailed questions. I do want to make a 

point that I will be contacting your office about what I consider to 

be illegal taking of a quarry and a port down in Mexico. That is 

completely unacceptable, and that puts me in a posture of doing 

nothing more positive with Mexico until that is resolved, and we 

will educate the American public and more members as we go on. 

I am very concerned. We are at the end of the public health 

emergency with COVID, and yet the administration’s posture is 

still to move forward with TRIPS, and not only move forward with 

TRIPS, but expand the focus to also include diagnostics and therapeutics. We had a hearing yesterday about this subject, and if the 

administration wants to create an environment where there are 

fewer therapeutics, less investment in small molecule research, and 

lost American jobs in the biotech space, go forward with that policy, because that is exactly what is going to happen. 

I will be able to come back before this committee, as I did yesterday with Eli Lilly and several others, who are simply saying they 

are exiting research and development that saves people’s lives first, 

improves the quality of their life, and employs American workers. 

I think it is a dangerous policy. 

I am going to submit several questions for the record, and, Chair 

and Ranking Member, I did have to let you know, since you all did 

the unseemly thing of politicizing potatoes, I will also have questions for the record on sweet potatoes, where you have a one-in-two 

chance if you are eating a sweet potato, it was grown in North 

Carolina, and we have trade issues there as well. 

The CHAIRMAN. The heat intensifies around the potato issue. 

Okay. 

Ambassador TAI. Chairman Wyden, would you give me just 10 

seconds to respond to Senator Tillis on the TRIPS issue and the extensions? 

The CHAIRMAN. Yes, sure, sure. Yes, sure, of course. 

Ambassador TAI. Because I want to make sure that, Senator 

Tillis, you hear from me exactly what we are doing with respect to 

the extension question that has been raised by the WTO. We think 

that it is a legitimate question and there are legitimate interests 

that are being expressed at the WTO around access worldwide to 

diagnostic therapeutics, et cetera. 

What we have done is to say this is something that we need to 

consider and deliberate on as a serious policy matter. We have 

asked the International Trade Commission to run one of their very 

public processes with integrity, to invite comments from the world, 

actually stakeholders, and to inform us about what we should do 

next. 

Senator TILLIS. But if we are weeks away—— 

The CHAIRMAN. We are going to have to move on—— 

Senator TILLIS. But if we are weeks away from it being a national health crisis, and we are still moving forward on things that 

were driven by the health crisis, I would really like to get a brief-
23 

ing on that, because you cannot use it as a pretext and then do 

that. 

The CHAIRMAN. The time of the gentleman has expired. 

Senator Thune is next. 

Senator THUNE. Thank you, Mr. Chairman. No potato questions. 

[Laughter.] Ambassador Tai, welcome back to Congress. 

As you know, the United Kingdom is one of our Nation’s largest 

trading partners and closest allies. The UK is America’s fifth largest export market and our largest services trading partner in the 

world. The U.S. and UK are also each other’s largest foreign investors. While our two countries have a substantial foundation in 

trade and investment, it is clear there is room to strengthen those 

ties and deepen the special relationship, in particular with a comprehensive free trade agreement. 

A new U.S.-UK trade agreement would build upon the common 

values and interests of our two countries, and in doing so help reduce costs for American consumers, improve supply chain resilience 

with a trusted partner, and open new markets for U.S. producers, 

including products in my home State of South Dakota. Important 

groundwork has already been laid—including the bilateral negotiations initiated by President Trump toward a trade agreement, and 

the U.S.-UK dialogue on the future of the Atlantic trade initiated 

by President Biden—to improve economic cooperation. 

There is also bipartisan support for this effort, as Senator Coons 

and I recently introduced a bill to kickstart trade negotiations with 

the UK. With the recently announced Windsor Framework, which 

provides a pathway on post-Brexit trading arrangements in Northern Ireland and which President Biden supports, the timing could 

not be better to reengage with the UK on a trade agreement. 

But as with any trade agreement, it will require presidential 

leadership and a committed USTR to move the ball forward. So my 

question, Ambassador, is, will you commit to strengthen the U.S.- 

UK trade relationship, in particular by undertaking steps to negotiate a comprehensive trade agreement with the UK? 

Ambassador TAI. Senator Thune, on the first part of your question, I absolutely commit to working to strengthen this relationship 

and have been doing so for the last 2 years. On the second part 

of your question with respect to a free trade agreement negotiation, 

let me just say I remain open-minded. I will reinforce what I said 

earlier, which is, we look at each one of our trade relationships and 

we look at the overall situation in the global economy, what our 

economy needs, to make sure that what we do is tailored. 

You have mentioned a lot of developments in the UK. We are 

tracking all of them, and I had a conversation with my new counterpart, the Trade Secretary Badenoch, just last week. So I am 

happy to continue to stay in touch with you as we build that relationship and continue those conversations. 

Senator THUNE. Good. So you are in conversations with them? 

Ambassador TAI. We are in conversations. 

Senator THUNE. I appreciate that commitment, and I strongly, 

strongly encourage USTR and the President to make a trade deal 

with UK, one of our closest allies, a top priority. It is something 

that can and really just needs to be done. 
24 

The USTR continues to push the Indo-Pacific Economic Framework. You heard some of my colleagues talk about that, which is 

presumably about reinforcing America’s presence in the region and 

offering an alternative to China’s influence. The problem is that 

IPEF does not achieve much of either, and while there may be 

areas of potential, what remains glaringly absent, in my view, are 

tangible benefits related to market access. If the U.S. does not 

meaningfully engage in the Indo-Pacific, I am concerned that South 

Dakota farmers and ranchers, and all American businesses, simply 

will not be able to compete on a level playing field. Without market 

access, enforceable commitments, and a binding approval from 

Congress, IPEF partners may also start to question America’s commitment to trade and look elsewhere. Meanwhile, China is aggressively pressing forward a trade agenda, whether it is in the AsiaPacific, Africa, Latin America, or just earlier this week, reaffirming 

economic ties with Russia, which again entails a lot broader significance. 

So, given the economic and geopolitical interests at stake, I again 

strongly urge USTR to be more ambitious to bolster America’s presence in the region. And I would ask: what is the administration 

doing to counter China’s economic assertiveness and its apparent 

increasing alignment with Russia, and when will we see tangible 

progress? 

Ambassador TAI. Well, in terms of the Indo-Pacific Economic 

Framework—and I am conscious of the time that I have left—let 

me just make a couple of points. One is that we are making quite 

a bit of progress there. Since launching this last May, we have had 

a ministerial in-person in September, and we just concluded our 

second negotiating round in Indonesia, with a third one announced 

in Singapore in 2 months. 

To your point about—and let me just reinforce that our partners 

are extremely excited to have us back in the region, and they are 

very, very deeply engaged. On your market access point, let me just 

make this comment, which is that the traditional approach to free 

trade agreements being comprehensively tariff-liberalizing, has led 

to winners and to losers. While it has been, I believe, in general, 

very good for our agricultural producers, the other swaths of our 

economy very much feel like the playing field is not level. 

When we look at the brittleness and the vulnerabilities, especially with respect to concentrations of supply in our supply chains, 

we are keenly aware of the need for us to bring a more resilient 

approach to our trade engagements, and that is exactly what we 

are doing in this particular region. So I am happy to continue this 

conversation with you, but I want to let you know that we are not 

driven by an ideology about this. We are deeply practical about 

how we engage with our partners, how we make each other more 

resilient. That is a guiding principle for the IPEF, and it will continue—— 

Senator THUNE. And it has got to be about results, and ultimately, to me at least, when you look at the number of free trade 

agreements China has, particularly in the region, and how we are 

absent, we have to get free trade agreements. And the best way to 

do that is get Trade Promotion Authority, and we have had this 
25 

conversation before. I wish the administration would do something 

about it. 

Thank you. 

The CHAIRMAN. I thank my colleague. Senator Lankford is next, 

and I hope my colleagues will then let Senator Warner go next, so 

we can get both of them in before the vote. 

Senator Lankford? 

Senator LANKFORD. I am going to stall as long as I can to keep 

Senator Warner from getting up then, if that is the goal. [Laughter.] 

Katherine, thanks for being here again. I appreciate your availability to this committee, to be able to talk to the issues on this. 

We have talked before about free trade agreements, and that this 

has not been a goal, to go get new free trade agreements at this 

point. It is trying to work with executive agreements and not bringing them back to this committee to be able to work through the 

process. 

I think you have heard bipartisan—we want to continue to stay 

engaged through the administration, to be able to work on free 

trade agreements, and we want to have a bipartisan conversation 

about the responsibility of Congress to do this. That is an older 

conversation we had. I was surprised to read that there is discussion at least about a new type of free trade agreement with Japan 

and with Germany, to try to deal with energy and climate issues 

that is also not coming back here. I cannot figure out how it gains 

market access and how it is an FTA. 

So help me understand this conversation about a free trade 

agreement that is not a free trade agreement, that does not really 

increase market access for American goods that way, but is increasing access for goods coming this way. What is this? 

Ambassador TAI. So, you and I are going to have a conversation 

around the free trade agreements issue, which we have done before. I just want to put a bit of clarification on, when I talk about 

free trade agreements—and I should make this clarification more 

often—I am talking about our traditional free trade agreement approach. 

Senator LANKFORD. Right. 

Ambassador TAI. I believe that there could be an approach that 

promotes resilience in a much better way, and in a way that our 

traditional approach has not. Your second question relates to, I 

think, critical minerals, and the interpretation of a free trade 

agreement in the Inflation Reduction Act. There, what I would 

have to do is really point to the guidance from the Treasury Department in the implementation of the Inflation Reduction Act, and 

note that that is an interpretation that the Treasury Department 

has made in its work that is part of, I would say, a different context than the one strictly that you and I have been in, where we 

have been talking about the free trade agreements. 

Senator LANKFORD. The one that has always been recognized. 

Ambassador TAI. Traditional. 

Senator LANKFORD. I think when everybody writes ‘‘free trade 

agreement,’’ there is an assumption of what that means, and suddenly free trade agreement does not mean free trade agreement. 

Even when it is in statute, it does not actually mean what everyone 
26 

has understood. When you say ‘‘traditional,’’ I do not know of an 

exception to that. If there has been an exception to that, I would 

be interested to be able to hear it. 

But there seems to be a way to work around Buy American, and 

to be able to now define things that are in Japan and Germany as 

American for the sake of the Inflation Reduction Act requirement 

of Buy American. Now suddenly Japanese products and critical 

minerals are going to be declared American to be able to come 

through the process. It seems like a very odd way to be able to do 

this, this workaround that is being developed in this new definition. 

So all I am trying to figure out is, if we are going to do critical 

minerals and we are going to try to gain additional critical minerals here in the United States, Japan has the same issue with 

critical minerals with China that we do. It does not help to then 

just declare China part of the United States, and then say we are 

just going to get it from there and declare it American when it is 

actually Chinese. Does that make sense? 

Ambassador TAI. So let me just say, I think that there are a lot 

of things that we agree on in your presentation, which is that critical minerals are critical. They are critical to our future and our 

economy—— 

Senator LANKFORD. Right. 

Ambassador TAI [continuing]. And we have significant supply 

chain challenges with respect to our access to critical minerals and 

where critical mineral deposits are right now actively being exploited and being made available to the world market. And what 

I would say is that in terms of addressing our supply chain 

vulnerabilities with respect to critical minerals, it is something 

that we cannot do alone, that we have to do with our partners. 

That is what we are trying to do with respect to the current exercise. 

Senator LANKFORD. So, I would agree that we have to be able to 

expand to friends and relationships and all those things. That is 

a good thing. I just have a hard time declaring suddenly a new definition of free trade agreement that does not have market access, 

and then saying this meets the Buy American standard when it is 

actually not done in America. That just seems a little odd to me 

in that. 

Can I ask a separate question? I know we do not have much time 

on this. It is about the Abraham Accords. It is one of the things 

we have talked about extending to our foreign policy, also extending to our trade policy. What are we doing actively right now to expand our input and trade relationships with those in the Abraham 

Accords? 

Ambassador TAI. So, we have a number of existing free trade 

agreements from 15 to 20 years ago with countries in the Middle 

East. We have in the last months and weeks, I think most recently 

just a week or two ago, been engaging with those partners through 

our TIFA agreements and arrangements, and also through the 

committee set up in our FTAs. And so, as part of our work to be 

part of the foreign policy toolbox, we are bringing our tools to bear. 

Senator LANKFORD. Great; thank you. Please keep doing that. 
27 

The CHAIRMAN. I thank my colleague, and as he knows—Senator 

Warner knows as well—I feel very strongly about expanding the 

Abraham Accords and, particularly, bringing more economic opportunities to Palestinians, because I think this is one of the best ways 

to get a two-state solution moving once again. 

Senator Warner is next. 

Senator WARNER. Thank you, Mr. Chairman. I am glad my friend 

from Oklahoma managed to use his whole 5 minutes. Wait until he 

gets back into Intel. [Laughter.] 

Let me—I have a bunch of questions. I want to also quickly say 

I agree with Senator Thune on the UK free trade agreement. We 

need to move on that, and I am not, Mr. Chairman, going to talk 

potatoes. But, Madam Ambassador, let us talk turkey. 

Yes, Virginia is one of the biggest States in poultry, both broilers 

and turkeys, about—what is their number?—17,000, 18,000 direct 

jobs, $6 billion in economic direct interest, much more of that indirect. The chairman and I, with a group of members, were recently 

in India, and I am chair of the U.S.-India Caucus, all for increased 

trade. 

But India is one of the most challenging places I know. I think 

colleagues have raised apples, and I am concerned about apples as 

well—we have Virgina apples. But on poultry, you know, they have 

tariffs up to 100 percent. So can you talk about, in your conversations with our Indian friends, whether poultry has gotten onto the 

agenda and what we can do to make sure we get more access to 

that market? 

Ambassador TAI. Certainly, agriculture and India—agriculture is 

always on the agenda for our conversations. And as you have 

noted, for all of the potential in this relationship, we still have to 

work very, very hard at unlocking the economic potential. So it has 

been part of our conversations. We will continue to raise it. We will 

raise it more loudly and more vociferously. 

Senator WARNER. Well, I really think we need to focus on this 

poultry issue. It is not just a benefit for Virginia. I know my friend 

from Delaware—let me jump line—this is an extraordinarily important issue for him as well, and I hope we can elevate that. 

I want to move continents and go over to Ethiopia. I understand 

the administration’s decision about taking Ethiopia out of AGOA. 

I do think we have had a relatively stable peace agreement with 

the Ethiopians since November. 

I know Secretary Blinken was recently in the country. You know, 

I think stronger ties and getting Ethiopia back into AGOA need to 

happen, and I would like you to give me a brief update on how 

those conversations are going and when we might see a movement 

from the administration. 

Ambassador TAI. Certainly. The decision to remove AGOA benefits from Ethiopia was not an easy one, especially while seeing 

what was happening in Ethiopia. But the AGOA program is structured the way it is. It has criteria and conditions, as all of you 

know, because you created AGOA, and we are where we are now. 

As part of that, we have been working with the Ethiopian Government, with a list of benchmarks that we will be looking at very 

closely in terms of tracking progress. I know that there have been 

important developments. This is something that the administration 
28 

is looking at across agencies. But we are working very closely with 

the State Department. 

Senator WARNER. But can you share, Ambassador, with me after 

the fact, what those benchmarks are and what the timeline is for 

getting Ethiopia back in? I think it is an extraordinarily important 

relation. Most all of us in this committee are concerned about Chinese investment. Our walking away from Ethiopia has provided opportunities for the CCP to make inroads. I know we need to take 

action on telecom in Ethiopia. 

So, I would like to get—I appreciate your comments. But I need 

specifically what those benchmarks are, what the timeline is, and 

then if they meet that, when Ethiopia can rejoin AGOA. 

Ambassador TAI. We will be happy to share that. 

Senator WARNER. Okay. I want to stay on Africa, because—and 

again I want to commend the administration for having the summit with African leaders in December. I think this is an area where 

we need to pay a lot more attention from a population standpoint, 

from a rare earth minerals standpoint, from the fact that there is 

an opening again. Under the notion of Belt and Road, a lot of countries went down that route with China. They did not get the jobs. 

They ended up with products or infrastructure that were pretty 

shoddy, and at levels of debt that are unprecedented. But we have 

to be more assertive. 

Talk to us about, in your remaining 25 seconds, the U.S.-Kenya 

circumstance. I think we need a free trade agreement with Kenya. 

Where does that stand? What can we do to help move that along? 

Ambassador TAI. Certainly. So we are very proud of the strategic 

trade and investment partnership work that we are doing with 

Kenya right now. We have met, I think, once already. The next 

round of negotiations is happening in April in Kenya, and I hope 

that that is public already. But if not, it is now. So we are moving 

along with a very, very good partnership with the Kenyans. We are 

motivated on both sides. 

Our focus really in this engagement is to bring to the engagement and the economic program those things that Kenya has told 

us that it really is prioritizing. One is making Kenya a preferred 

destination for foreign investment, and also looking at capacity 

building to ensure that Kenya has the equipment and the tools to 

take advantage of the economic opportunities that we are engaging 

with them to create. 

Senator WARNER. Thank you, and thank you, Mr. Chairman. I 

also want to thank my colleague from Delaware for letting me 

jump line. But we did talk turkey with the Ambassador, and I 

know that is an issue of importance to you. 

The CHAIRMAN. All right. Here is where we are. We are going to 

have to do some juggling, but we can definitely get Senator Carper 

and Senator Young in before the end of the vote, and then I would 

just like my colleagues, on both sides of the aisle, to let us know 

about their schedules, because we are just going to try to keep this 

moving. 

In fact, it technically goes Carper, Young, Whitehouse—and then 

we have our colleagues as well who want to do it. Senator Whitehouse is going to get back, and I appreciate it. 

Senator Carper and then Senator Young. 
29 

Senator CARPER. Thanks, Mr. Chairman. And, Ambassador Tai, 

great to see you, and thanks not only for joining us today; thank 

you for serving our country in so many different ways over the 

years. 

Last month, as you may or may not know, I led, along with Senator Hassan, a bipartisan bicameral codel to Mexico, to Guatemala, 

to Honduras, to explore how we can better address the root causes 

of illegal immigration to this country, and also expand economic opportunity throughout Central America. 

The delegation saw firsthand how increased investments, including those spurred by the Biden administration’s call to action initiative, can create good-paying jobs, while also advancing our humanitarian and security goals. While this is, I believe, a good start, 

it is clear that we can do more, and frankly the folks down there 

can do more to support the rule of law. 

I like to say that the main thing is to keep the main thing the 

main thing. As far as I am concerned, the main thing for economic 

development, for stemming illegal immigration, is rule of law and 

to create jobs, particularly jobs in the private sector. But how can 

we strengthen our trade and investment policies and facilitate 

greater economic cooperation throughout Central America and 

across the Western Hemisphere, in your view? 

Ambassador TAI. Well, Senator Carper, thank you for leading 

that bipartisan and bicameral codel. I do a lot of travel as part of 

my job. You learn so much by being on the ground, seeing with 

your own eyes and having conversations and establishing relationships directly. So I am delighted that you and colleagues have done 

that with three very important delegations. 

Senator CARPER. Our President likes to say all politics is personal, all diplomacy is personal, and he is right. 

Ambassador TAI. I completely agree with you. You know, I had 

mentioned earlier that Latin America is one of the regions where 

we have the most existing FTAs, and yet even with partners with 

whom we have an existing traditional free trade agreement, we are 

hearing from them that in this moment in the global economy, that 

they are looking for something more, and that they are looking for 

something more in their relationship with the United States. 

So, whether it is with partners with whom we have an FTA, or 

with partners with whom we do not yet have an FTA, we are very 

focused on the parts of an economic engagement that are relevant 

to the challenges that we all have today, and this is coming after 

several years of economic turbulence—the pandemic, supply chains, 

Russia’s war against Ukraine. 

So I completely agree with you with respect to the rule of law. 

Establishing stable environments where economies can grow—and 

you know, this is the President’s vision of growing our economy 

from the bottom up and the middle out. It may be surprising to 

you—or not—how many of our partners have leaders who are also 

looking to cultivate that broad-based economic growth and support 

in these countries. We also see that. So that does inform the trade 

policies, the economic engagement policies that we are bringing, 

which are really key to achieving sustainability and resilience, 

right now especially, and also inclusiveness. 

Senator CARPER. Good; thank you. 
30 

Senator Cornyn and I have the privilege of leading the Trade 

Subcommittee of this committee, and we had a hearing not long 

ago exploring the importance of digital trade and economic growth 

and job creation. One of the key takeaways was how digital trade 

can benefit workers and unlock new opportunities for businesses of 

all sizes across a wide range of industries. As you negotiate the digital chapter in the Indo-Pacific Economic Framework, how are you 

creating new opportunities and promoting economic growth for 

small businesses? 

Ambassador TAI. I think this is a great question and key to my 

previous answer around looking for opportunities, working with our 

partners to find opportunities to work together to unlock that economic space for the smalls, the mediums, for regular people. That 

is really, really critical to our vision for how we engage with our 

trading partners. 

So, with respect to digital especially, we see the potential for digital to reach so many people, ordinary people, and to give them a 

gateway for interacting with not just their own economies, but the 

world economy. At the same time, we also know that there are 

structural barriers in this type of economy, just like in the more 

traditional economy, that can stand in the way of creating that economic growth. 

And so, in our engagements—whether it is in the Indo-Pacific 

Economic Framework or in other negotiations where we have 

scoped active digital conversations—our focus is to make sure that 

the approach that we bring to these negotiations is as broad-based 

as possible, and that we are bringing in stakeholders from as broad 

a basis of our economy as possible, so that it is an agreement that 

will set us up for, again, a growth trajectory over the years, especially as our domestic regulators, our domestic legislators, continue 

to develop a vision for how regulation comes in contact with the 

digital economy. 

Senator CARPER. Great. Thanks for that thoughtful response. 

Great to see you again. Keep up the good work. Thanks so much. 

The CHAIRMAN. I thank my friend. 

Senator Young? 

Senator YOUNG. Welcome, Ambassador Tai. Good to have you before the committee, and I am going to pick up on Senator Carper’s 

thoughts about digital trade. He and I are working together on a 

digital trade resolution. In the absence of kind of Trade Promotion 

Authority and some bolder action on market access, we have identified this area of potential bipartisan agreement, to send a signal 

to the world that the United States is leaning into the trade agenda, especially in this area, and the chairman and ranking member, 

I know are supportive of this effort. 

Specifically, the resolution calls out China for manipulating digital trade rules to benefit themselves, while undercutting American 

industries. We just cannot let China dictate the standard in digital 

trade. It is not just an economic issue; this will shape our values 

if we have not embedded it in the technologies of the future and 

the services that are provided through digital means. If those rules 

are shaped by the Chinese Communist Party, then they are going 

to have outsized cultural access, and their values will permeate the 
31 

digital economy. So this is really important. It should be to every 

American. 

I understand the text of the Indo-Pacific Economic Framework is 

still in draft form, but could, Madam Ambassador, you tell me how 

IPEF will raise the standard for digital trade, and speak specifically to how countries, especially developing countries, will make 

meaningful progress to improve their digital trade practices under 

IPEF provisions? 

Ambassador TAI. Certainly; I would be happy to do that, Senator 

Young. As we shift our thinking to a trade system that aims to promote inclusiveness, resilience, sustainability, we have to apply this 

to the rapidly evolving digital economy that includes new and 

emerging technologies such as AI and a heavy reliance on using 

data for economic activity. 

In today’s economy, trade increasingly occurs through the movement of data and information across international borders. First, 

we must pursue rules that promote a comprehensive vision of digital trade; that is, digital trade that is inclusive, that protects the 

privacy of consumers and workers, and supports U.S. values like 

freedom of expression, freedom from discrimination, and that supports the environmental sustainability goals as well. 

Second and very, very importantly, as we engage with our partners, we know that we must make sure that governments have the 

regulatory space to tackle the challenges arising from the rapid 

growth of the digital economy. 

Third, we need to develop rules that prevent some countries from 

moving in what we consider to be the wrong direction—specifically, 

the direction of a government-controlled repressed Internet, where 

the government sets rules that disadvantage U.S. businesses, workers, especially small businesses. And, unlike the biggest companies, 

small businesses cannot absorb the costs that those rules impose. 

Senator YOUNG. Thank you for that summary. When can we expect the IPEF framework to be publicly released so we can kind of 

scrutinize some of the details? 

Ambassador TAI. Certainly. So the proposals are available to you, 

and I have had this conversation with Chairman Wyden at the top 

of the hearing, and I think that today is Thursday. Two days ago, 

we released a public summary of the text that we have put out 

there. 

Senator YOUNG. Excellent. 

Ambassador TAI. So you can begin talking about it with your 

constituents. 

Senator YOUNG. Okay. We will look forward to dialoguing with 

you if we have any concerns about that as well. 

I am glad that Senator Warner asked a question about AGOA 

and the benefits, or lack thereof, given to Ethiopia. Can you give 

me an update about any other countries, particularly South Africa? 

I do not think the South Africans, if they are watching—and I hope 

they are—should assume that they will continue to enjoy AGOA 

benefits. 

They have been very closely aligned with Russia and China. It 

appears that that relationship is getting even closer. I am struggling—and I will continue to work on this issue—to divine why 

they should continue to enjoy AGOA benefits. So maybe give me an 
32 

update on your thinking as it relates to that or commit to me here 

that you will follow up on that matter. But I would love to work 

with you and others in the administration on this issue. 

Ambassador TAI. So, on South Africa in particular, I know that 

these are challenging geopolitical times, very, very challenging. I 

also see a lot of potential in this particular relationship and have 

built a very strong relationship with my counterpart there, where 

we can talk a lot about a lot of things constructively. So, I commit 

to following up with you on South Africa in particular, and on Africa overall. 

I will just highlight last December when the African leaders were 

here in Washington, that the Secretary General of the African Continental Free Trade Area and I signed an MOU. We have an opportunity to bring a form of partnership with the countries in Africa 

that can be new, that can be forward-looking, and that can help 

make each of us stronger. 

In terms of the demographics that Senator Warner talked about, 

by 2050 one in four people in the world will be African, and they 

will be overwhelmingly—there will be a lot of opportunity there. 

Senator YOUNG. Listen. There have to be consequences for not 

being a good friend, partner, and the South Africans have not been. 

It is manifestly true, and something has to give. I mean, this is a 

high form of naivete if we continue to offer special trade benefits 

to a country that is unfriendly to the United States. Why? I think 

it is nice to revisit our principles and the intention of this program. 

So, let us continue to dialogue about this important issue. But 

I do not want to—forward-looking means as we look forward, there 

ought to be consequences. That is what I think. If the administration is taking a different view, then we should be very clear about 

that. I will give you the last word. 

Ambassador TAI. I am happy to follow up with you on this important issue. 

Senator YOUNG. Thank you, Ambassador. 

Senator WHITEHOUSE. Am I up? I guess I am the chairman, as 

well as the next one up for the moment. How are you, Ambassador? 

Senator YOUNG. The gentleman is recognized. 

Senator WHITEHOUSE. Thank you. 

I want to talk about carbon border adjustment for a moment 

with you. The EU has announced a CBAM. They have pretty well 

defined it. It is coming at us. I hope very much that that will be 

seen as a welcome step by the administration and one that we can 

try to meet and match. I think the EU CBAM opens the prospect 

of us joining into a common carbon border agreement. 

Canada, I am told, is eager to join. The UK has done a hard left, 

which is the carbon price. The tariff part is relatively easy. So we 

are within plausible reach of a carbon pricing agreement among 

the UK, U.S., Canada, EU, who knows, perhaps Australia. I worry 

in this context that the steel-aluminum arrangement that you are 

working on gets proposed as an alternative and is used as a stick, 

to stick in the spokes of progress on carbon border adjustment. 

So I am eager to make sure that that does not happen. We have 

reports showing that the carbon border adjustment has huge value 

to American industries, big ones like steel and pharma and cement 

and aluminum. One study shows that the iron and steel sector 
33 

alone could have over a million jobs added in the U.S. if we have 

a solid carbon border tariff, because of the enormous tariff differential between us and China, and the relocation of jobs and construction to the United States. 

There is a bipartisan conversation about this happening in the 

House, and I commend to you the CCES recent report supporting 

carbon border tariffs in the House. I can get it to you if you do not 

have it handy. And it has been announced by Senator Cassidy of 

this committee that he is going to announce his own carbon border 

bill fairly soon, and I have had one for a long, long time as part 

of my carbon pricing measure. 

So there is bipartisanship on both sides of this building on this. 

I will tell you that when I have been challenged over the IRA at 

the Egypt Comp, at the Munich Security Conference, in meetings 

with EU officials, I have taken a very strong line that I believe is 

consistent with what the administration wants, which is basically 

tough bounce. You catch up, meet us or beat us. Nothing prevents 

you from stepping up the same way that we did, and I think Minister von der Leyen has also moved in that direction as well, and 

the EU is moving in that direction. 

So it puts me in a very, very awkward position if the EU makes 

the reciprocal argument to us, which is, ‘‘Okay, we have a carbon 

border adjustment. Instead of whining and complaining about it, 

you ought to step up and meet us and agree on something, so that 

there is no tariffing between the two of us.’’ I do not want to have 

to say, ‘‘No, no, no, that step up and match us is only true when 

we are telling you you have to match us. But when it is the other 

way around, when the shoe is on the other foot, then we should get 

some kind of like special pass.’’ So, if it is the administration’s position to try to steer away from the EU CBAM rather than to meet 

it, please expect my vehement adverse activity to prevent that from 

being the outcome for two reasons. 

First, there is no chance in the world that the aluminum and 

steel arrangement will create anything like the emissions reductions of a proper carbon border tariff. It just is inconceivable. So 

we would have an enormous emissions reductions loss if we went 

that route. And then the second thing, of course, is consistency. I 

do not think we can tell our EU friends to basically go pound sand 

and match us with respect to our incentives, but then when they 

have their own plan, we try to weasel our way out of it. 

So please, please, please, lean into that as much as you can, and 

thank you for not talking about marine litter in the IPEF negotiations. That is a pathetic phrase from the USMCA. It is pollution, 

it is plastic, it has a cause, it has a source. It is not litter. 

Thank you. 

Ambassador TAI. Thank you so much, Senator Whitehouse, and 

in the time that I have, again I want to reassure you that in terms 

of—— 

Senator WHITEHOUSE. I think it is just us, so you can take all 

the time you need. [Laughter.] 

[To Senator Hassan.] Sorry, sorry, sorry. 

Ambassador TAI. In the global steel arrangement negotiations—— 

Senator WHITEHOUSE. Be brief. 
34 

Ambassador TAI [continuing]. I want to assure you that the Europeans agree that this arrangement has to deal with carbon intensity as well as the distortive global overcapacity in steel and aluminum. So we see this very much consistent with the EU’s approach to CBAM. But we also need to address the larger market 

challenges around steel and aluminum. So there is an overcapacity 

piece to what we are negotiating as well. 

Your views are very, very clear, and I just want to be as effective 

as I can be to persuade you that we are not working at cross purposes. 

Senator WHITEHOUSE. Terrific. Thank you. 

Senator Hassan? 

Senator HASSAN. Well, thank you. And, Ambassador, it is good 

to have you here, and thank you for spending a long morning here 

at the Finance Committee. We really appreciate it. 

I know you just heard from Senator Carper a little bit about the 

codel that we took. We joined several of our House colleagues on 

a bipartisan congressional delegation trip to Mexico, Guatemala, 

and Honduras. We met with Presidents and Ministers from those 

countries, U.S. officials on the ground, but also leaders from business and civil society, as well as community organizers and workers and survivors of human trafficking. 

In our meetings, both U.S. and Mexican Government officials 

said that the USMCA is having a really positive impact. To be 

sure, there are still trade issues between our two countries. No one 

agreement can solve everything. But what we heard is that we now 

have strong mechanisms in place to resolve those issues under the 

new agreement. 

So, does USTR share that assessment of the USMCA? Does 

USTR believe that the agreement has been important to improving 

our relationships with Mexico, for instance with respect to trade, 

and working together to improve regional stability? 

Ambassador TAI. Senator Hassan, thank you very much for sharing that feedback from your trip. It is really incredibly valuable to 

us. I think that the fact that we just went through a bit of a wild 

ride in renewing, updating, and correcting for the balance in the 

North American economic relationship, that having done that, having brought the USMCA into force to replace the NAFTA, that we 

have made progress in building trust between the countries and 

also with our stakeholders, especially with our workers. 

So I think that the USMCA remains a bedrock foundation for our 

vision of a worker-centered trade policy. To your point that you 

made very effectively, it has not solved all of our problems. New 

problems come up and, you know, it was negotiated before COVID 

certainly. But there is a lot that we can do here. We remain committed to implementing the promise of the USMCA. The relationships may be falling short, but we remain committed to working 

through the USMCA to improve them. 

Senator HASSAN. Well, thank you, and I certainly heard from 

workers on the ground there. They feel new hope and new capacity 

in their strength too. So it is not without its challenges, obviously. 

Let me turn to another issue. In its 2022 report to Congress, the 

U.S.-China Economic and Security Review Commission recommended that the U.S. more proactively monitor and publicly iden-
35 

tify industrial subsidies provided by the Chinese Government. This 

would help the U.S. respond to these harmful and distortive trade 

practices, which really pose a risk to domestic production and employment. 

So, Ambassador, how does the USTR currently monitor Chinese 

industrial subsidies, and how can we work together to proactively 

protect U.S. workers and supply chains from these harmful trade 

practices? 

Ambassador TAI. I am aware of that report, and it contains a lot 

of very useful analysis. We have also taken note of the recommendations that that Commission made to Congress. In terms of 

monitoring subsidies practices in China, I will tell you that we 

have dedicated personnel who are doing that research every single 

day. But I will also say that we should not have to be expending 

those types of resources, because all members of the WTO have an 

obligation to declare their support to the WTO. 

The fact that we have to actively monitor and search out these 

types of policies and practices is part of the challenge that we have 

in the competitive relationship with China, but also one of the challenges that we have in pushing for reform at the WTO. 

Senator HASSAN. Sure, and I think the first step there is doing 

our own monitoring. We can show the WTO either what it is missing or really push them on what they are woefully not doing, right? 

So whichever one of those things it is. 

I only have a little bit of time left, but I wanted just to touch 

on trade and domestic manufacturing policy, because it is obviously 

really important to our economy and our national security, as we 

rebuild our domestic manufacturing base for critical goods and 

strengthen our supply chains from allied and partner nations. So 

can you talk about how we should be thinking about trade policy 

as part of our larger strategy to build production capacity in the 

U.S.? 

Ambassador TAI. Absolutely. Trade policy and manufacturing 

policy are connected. You trade for the things that you either do 

not have or you have decided not to make, and in order to make 

things, you have to have access. It is all part of the same economic 

ecosystem. A lot of what we are doing is making sure that trade 

policies are not, on the one hand, bleeding out the benefits and the 

rebuild from investments that all of you have made possible working with President Biden, whether it is with respect to infrastructure, CHIPS and Science, or the push for that innovation and clean 

technology and clean energy. So for us, that does mean bringing a 

new approach to trade, to make sure that we are working in concert with the needs of our economy, and I really appreciate this 

particular question, because I think that it is lost on a lot of people. 

Senator HASSAN. Well, thank you very much, and thank you, Mr. 

Chairman. 

The CHAIRMAN. I thank my colleague. 

Senator Blackburn is next. 

Senator BLACKBURN. Thank you, Mr. Chairman. Ambassador, 

thank you for your generous time today. We appreciate it. 

Now, I am not talking potatoes or apples or turkeys, but you 

know I am going to talk to you about Tennessee whiskey, and we 

have some great ones when you look at Jack Daniels and George 
36 

Dickel and the Nelson brothers and Uncle Nearest. I thank you for 

the work you have done on those issues, and I wanted to see if you 

could give me an update of where we are in the process. We are 

concerned about India’s 150-percent tariff. We are concerned about 

the barriers this presents. You were just talking about how manufacturing, production, and trade go hand in hand. So if you would, 

give us a little bit of an update there. 

Ambassador TAI. So, with respect to India and the challenges 

that we face there, I will just refer to the commitments that I made 

to the other members on their issues. I make that commitment to 

you as well, Senator Blackburn, to work hand in glove with you on 

tapping that potential with India, and making progress with respect to barriers, in this case on Tennessee whiskey. 

The other note I would make is that Tennessee whiskey and our 

producers got very much caught in the crossfire of tariffs and retaliatory tariffs a couple of years ago. I just want to provide a status 

update, that with respect to the European Union and our lowering 

of tariffs as part of the Boeing Airbus dispute, we gave ourselves 

5 years to create a framework where we can figure out how to work 

with each other better, to take on challenges that we share. I 

would like you to know that we are doing very good work as a part 

of that framework. 

As well, in the steel and aluminum context with the European 

Union, they took down their retaliatory tariffs. We converted them 

from being subject to a tariff to duty-free trade with some guard 

rails for 2 years, and we are facing down a deadline at the end of 

this year to conclude our global steel and aluminum arrangement, 

where we can avoid having to get back into that situation. 

Senator BLACKBURN. So let me ask you about that, because on 

the 301s, you think that your timetable is by the end of this year. 

Is that—— 

Ambassador TAI. The steel and aluminum with Europe is 232. 

301s are with respect to China, and that is a separate issue. 

Senator BLACKBURN. Okay, okay. So then you do not have an update. You have opened that portal? 

Ambassador TAI. I can give you an update on the 301s as well. 

So, we have started a process; we opened that portal. We invited, 

at the request of our U.S. economic stakeholders, a review of the 

301 actions from a couple of years ago, and those were the tariffs. 

Senator BLACKBURN. Okay. 

Ambassador TAI. The portal closed a couple of weeks ago, so we 

are in receipt of thousands of responses. We have taken a very responsible, deliberate approach. We will be reviewing those, and we 

will be undertaking a process for assessing the 301 tariffs over the 

course of the next weeks and months. 

Senator BLACKBURN. Okay. Let me ask you—we have talked a 

little bit internally in our office about protecting IP. And when we 

look at China, when we look at what happened to Iran, COVID 

vaccines, and the WTO—along with the support of the Biden administration—reached a 5-year waiver on COVID vaccines last, I 

think it was June. And then the administration supported a limited 

waiver in 2021, but then they supported the final WTO decision. 

So as a result of that, we fear that this is going to be something 

that hampers and slows innovation and U.S. competitiveness. So 
37 

talk a little bit about what is happening with this administration 

in protecting American IP in these trade agreements. 

Ambassador TAI. Certainly. So in 2021, what we did was lean 

into the negotiations at the WTO, to make sure the WTO would address this issue of whether or not intellectual property modifications needed to be made during COVID. The result was in 2022, 

a negotiation concluded with 164 members of the WTO to make 

modifications to the IP rules, similar to what we had done in the 

early 2000s around HIV treatments and therapeutics. There is now 

an open question at the WTO around whether or not modifications 

should be made also to COVID therapeutics and diagnostics, and 

that is a question that we have put to the International Trade 

Commission here, an independent agency, to run a robust process 

of consulting with stakeholders and inviting commentary. That is 

something where the ITC will be concluding its report later this 

year. 

In terms of intellectual property, we are very proud of being an 

extremely innovative economy that is really quite often the envy of 

the rest of the world. And that is also part of the reason why we 

are leaning into it, to bring it back to the beginning of our conversation, revitalizing manufacturing in America as well, because 

manufacturing is a very intimately connected part of that innovation cycle. I want to—— 

The CHAIRMAN. The time of the gentlewoman has expired, and 

we are going to have to move on, because we have colleagues who 

still have not had questions. 

Senator Cortez Masto? 

Senator CORTEZ MASTO. Thank you, Mr. Chairman. Ambassador, 

it is great to see you again, and I know it has been a long morning 

for you, so I have just a couple of questions for you. 

One of them has to do with solar tariffs. So last year, the Commerce Department announced a 2-year pause on tariffs that would 

have hit solar panels coming from Southeast Asian countries. This 

pause allows our solar industry to continue to ramp up as the Department conducts its circumvention investigation. The pause is extremely important. Right now, the U.S. has the capacity to manufacture only about a third of domestic demand for solar panels. 

Now, we need to continue to support domestic manufacturing for 

the long term; I support that. But in my home State of Nevada, the 

solar industry is booming right now, and our demand for solar outpaces our ability to manufacture it. So when the threat of tariffs 

was in place, nearly 75 percent of domestic solar projects experienced cancellations or delays, and we saw that in my home State. 

That threatens jobs not just in Nevada, but across the country, and 

those are union jobs. Those are union jobs in my State. 

And so, I am concerned about this. So let me just ask you this. 

I am concerned by the effects of undoing the President’s actions on 

this issue, and in the process needlessly reinjecting turmoil into the 

solar marketplace. Can you assure me that the administration does 

not support abruptly abandoning the President’s approach? 

Ambassador TAI. Senator Cortez Masto, I take note of your observations around the solar industry and our needs, and the jobs. 

I think you noted at the beginning as well that the 2-year pause 

was part of a Commerce action. So I know you have asked me 
38 

about the administration’s position. I will have to get back to you, 

because this is primarily something that is enacted in Commerce’s 

jurisdiction. 

From where I sit at USTR, let me just say that if I look at the 

big picture, the challenge around solar, where we are—which is 

only being able to provide one-third of our demand—is one of these 

situations where, if we looked back 20 years ago, we had a burgeoning solar industry that was innovative and growing, and we 

lost it. And in the wake of losing industries like this, which are so 

strategic and important, including to our climate goals, we find 

ourselves fighting each other around the jobs and the production 

and tariffs, in ways that are really heartbreaking for me and really 

inform, from USTR’s perspective, how we need to be approaching 

our trade policy, to try to prevent this type of thing from happening 

again. 

On your specific question though, let me get back to you with 

more specifics. 

Senator CORTEZ MASTO. I appreciate that; thank you. 

Let me ask you this. The other concern of mine is international 

standard-setting when it comes to emerging technologies. International standards have considerable impact on international trade 

and global economic development. Senator Portman and I have 

passed legislation to study the impact of the Chinese Government’s 

influence on international standard-setting bodies, and that study 

outlined a number of notable concerns about Chinese attempts to 

dominate international standards and set the terms in ways that 

are favorable to them. 

Can you speak to your view on this issue in the context of trade 

negotiations, and any efforts USTR is undertaking? And let me just 

clarify and add to this. Based on the legislation that we passed, a 

study came out. We asked NIST to do a study. One of the recommendations that they have put forward is to ensure—let me find 

it really quickly—that when it comes to trade, that we clarify existing export control regulations that could accidentally discourage 

U.S. companies from participating in standards development. 

So, I just want to put that on your radar as well, because this 

is such an important issue for us to address right now. So please, 

if you would give me your thoughts on it. 

Ambassador TAI. Certainly. With respect to standards, we know 

how critical they are to, if you will, the interoperability between 

our economies, whether it is recognizing each other’s standards, 

whether it is in terms of standard-setting, creating advantages. So 

it is something that we are very conscious of as we engage our 

trading partners, and something that we are working towards, 

which is a better compatibility between our economies. 

On the NIST study and the recommendation, that is really very 

interesting. I know that export controls are an area of active collaboration in the context of the Trade and Technology Council between the U.S. and the EU, and it is something that I will take 

back. I am sure my team is aware of it. It is an area where, to the 

extent USTR works here, we partner very closely with Commerce. 

Senator CORTEZ MASTO. Thank you. 

The CHAIRMAN. I thank my colleague. 

Senator Warren is next. 
39 

Senator WARREN. Thank you, Mr. Chairman. 

So, giant corporations lobby to rig the laws in their favor, but if 

it looks like someone in government might actually rein them in, 

they have a second bite at the apple. They try to rig the trade deal 

to lock in more favorable regulations. In other words, if a government tries to break up your monopoly or crack down on your price 

fixing, just call it illegal trade discrimination and keep right on 

going with those business practices. 

Now, this is not a theoretical concern. Ambassador Tai, I was 

concerned to see reporting just yesterday that you have used meetings with your Canadian counterpart to criticize Canada’s effort to 

make big tech pay for the news content that big tech uses to make 

huge profits. That proposed Canadian law, by the way, looks a lot 

like pending U.S. legislation that right now has bipartisan support. 

So, Ambassador Tai, if that report is true, it would be wildly out 

of step with President Biden’s whole-of-government order, to prioritize policies that promote competition in the economy. 

Do you agree that we should support our allies when they step 

up to regulate big tech, including supporting them in the way that 

we write and enforce digital trade deals? 

Ambassador TAI. Senator Warren, the short answer is, ‘‘yes,’’ I do 

agree with your statement. The second piece, if I may interject on 

the basis of that reporting, which was brought to my attention yesterday. I think this is probably based on a readout of a meeting 

that I had with my Canadian counterpart, and I have in fact raised 

these Canadian bills that are in question with my Canadian counterpart, to ask more and to learn more about them. 

What I would like to do is to understand—especially in this 

realm where digital and trade intersect—what the motivations are 

of our trading partners. 

Senator WARREN. Oh, okay. And just so I am clear on this, you 

were not patting the Canadians on the back for reining in big tech, 

I take it, which is what we would like to see happen. You were not 

telling them to back off regulation, however. Is that right? I just 

want to be clear on this. 

Ambassador TAI. The basis of the readout—and this is me going 

a step further from the readout—I raised the question to say I 

would like to learn more about this. 

Senator WARREN. Okay. And this is critically important because 

as U.S. Trade Rep, you do not just enforce existing trade rules. You 

are also currently leading negotiation on digital rules in the IndoPacific Economic Framework, new rules that big tech lobbyists also 

want to rig in their favor, to undermine President Biden’s competition agenda, and to undermine the work of Congress and regulators 

like the FTC and the DOJ. Ambassador Tai, can you assure me 

that the IPEF digital trade text you are currently negotiating will 

not impede in any way those efforts to stop big tech’s anticompetitive practices like gobbling up competitors, or abusing monopoly 

power to jack up prices? 

Ambassador TAI. It is absolutely correct that it is not our intention to use these negotiations to impede. And I would also like to 

repeat for you comments that I made earlier in the hearing, that 

it is our vision—in terms of what we are negotiating in the IndoPacific Economic Framework, including in the digital areas—that 
40 

we are bringing with us a pro-competition outlook that is meant to 

enable as many participants in the economies as possible. 

Senator WARREN. I am very glad to hear that, but I want to explain that I have real concerns here, because the text is classified. 

And that means, even though I may see it and my staff may see 

it—we are among the few members of Congress who have access— 

I cannot even talk with you right now about it in this hearing, on 

any of the specific issues in the text. 

This means that the American public cannot know what is in the 

text. But just last week, U.S. negotiators were in Bali discussing 

exactly this text with representatives from foreign countries. Who 

else got access to the text? Well, so-called non-government advisors, 

which includes Amazon and Google lobbyists. Now, Ambassador 

Tai, that is just not right. This text should be public, and the next 

tranche of digital text that you are planning to discuss with partners next month should also be public. 

Ambassador Tai, will you commit that, going forward, you will at 

the very least publish detailed summaries of digital negotiating 

text for public feedback, and do so before sharing further texts or 

having further discussions with our partner countries? 

Ambassador TAI. Senator Warren, in engagements with you and 

other members of this committee, I have heard a very clear desire 

for more transparency. I made a commitment that we would publish public summaries of the proposals that we have made, and on 

Tuesday we published a summary of the texts that we have tabled, 

I believe going into the first round of negotiations. 

Let me just share with you, we are moving at a slower pace than 

I would like, and part of it is because we are doing something new. 

So I do commit to you that we will keep working on improving our 

practices, and your feedback and the feedback from this committee 

on how we can do this better is valuable and will inform our work. 

Senator WARREN. Well, I appreciate that. I know I am over time. 

I just want to say that when deals like the IPEF are negotiated in 

secret, it means that members of Congress who are trying to pass 

laws to rein in big tech cannot tell what you are or are not giving 

away. It means regulators like the FTC and DOJ cannot do it. So, 

I very much hope you will be transparent. 

Sorry, Mr. Chairman. 

The CHAIRMAN. I thank my colleague. 

Senator Casey is next. 

Senator CASEY. Thank you, Mr. Chairman. Ambassador Tai, 

thanks so much for being here today and for your public service. 

I want to talk about two issues. One is gender equity in trade, 

and the other is manufacturing. I want to thank you and your office for all the work you are doing to lay the groundwork for trade 

policy that advances the rights and economic interests of women. 

This is an issue I have worked on in the Senate with Senator 

Cortez Masto, and a group of us led by her. Too often women are 

left out and often left behind when we and other countries negotiate trade deals that govern the global economy. We both know 

that only one of our free trade agreements has binding provisions 

on gender equity in trade, and only a handful of our 62 trade 

framework deals with other countries even contain provisions on 

women and trade. 
41 

So I strongly encourage you and your team to continue to promote both gender equity and equality and women’s economic empowerment in trade through every avenue available, but especially 

as you negotiate trade deals with countries in the Indo-Pacific, the 

Americas, and across the globe. So my question is, how do you envision the current trade agenda benefiting U.S. leadership on gender equity and equality? 

Ambassador TAI. Well, Senator Casey, I want to thank you and 

Senator Cortez Masto for your leadership on these issues, ensuring 

that the growing conversation in international trade circles around 

empowering women and advancing women’s participation in the 

economy and the global economy will be more than just a conversation, and connecting the dots to things that we can do in trade policy, and frankly addressing structural challenges that women face 

in different economies. 

I want to share with you and highlight something that I think 

you already know about. At USTR, we requested the U.S. International Trade Commission to undertake a study to look at the distributional effects of our trade policy so far. I think that we have 

put a lot of faith in our trade policies that they will raise tides and 

that those tides raise all boats. 

But we have long suspected, and we have long had our economic 

stakeholders, including important stakeholders like our workers, 

tell us that the system does not work the way that we think it does 

or that it is intended to. The ITC came back and said first of all, 

it is clear we are not tracking the data that really will give us a 

crystal-clear picture of what we are doing. But in terms of the data 

that we do have and the studies that have been done, we see that 

women, communities of color, and also non-college-educated White 

men have not benefited from our trade policies the way that others 

in our economy have. That has been really critical to our thinking 

about a new approach to trade that is more inclusive, that is more 

sustainable, and that carries out the promise of trade as a positive 

force in the economic toolbox. 

Senator CASEY. I appreciate that. I look forward to working with 

you on it. 

I want to talk about manufacturing. It is obviously a strong and 

vibrant sector of our economy in Pennsylvania, everything from 

semiconductors that power our computers and cars to skill that 

supports the bridges in our State. The President’s 2023 trade agenda indicates that the manufacturing sector is responsible for 11 

percent of U.S. GDP. It is a key driver of exports and, of course, 

employs so many Americans. But non-market economies like the 

People’s Republic of China know the strength of our manufacturing 

sector and seek to force their way to global dominance by skirting 

trade enforcement, using forced labor, and committing unfair trade 

practices. 

Can you tell us what workers in our State of Pennsylvania, as 

well as other States, understand? Tell us how the current trade 

deals being negotiated will benefit them. 

Ambassador TAI. Certainly. I think it starts with recognizing the 

playing field is not level, and that is something that, depending on 

which part of the economy you are in and represent and who you 

are talking to, is not always apparent. It is because we have a very 
42 

large economy, and this economy is shaped differently in different 

parts. But we know that in terms of the international playing field, 

we are operating in a world economy that has changed a lot in the 

last couple of decades and has led to a lot of fragilities for us and 

an erosion of our manufacturing base, as well as a kind of deindustrialization that we have experienced. By the way, we are not 

the only ones who have experienced this. 

So, in terms of the worker-centered trade policy and what we are 

doing in trade, we are looking at all of the things that we need to 

do to strengthen ourselves, to rebalance and to level that playing 

field. That does mean leaning into enforcement. That does mean 

embracing the investments that we are making in ourselves, our 

infrastructure, our people, and ensuring that our trade policies are 

reinforcing that. 

So, I think that there is a lot of work that we have also been 

doing to make our trade relationships more resilient, to produce 

more options in terms of our manufacturing supply chains, in 

terms of how global trade flows. All of that is about leveling the 

playing field and bringing us back to where we would like to be. 

Senator CASEY. Thanks very much. Thank you, Mr. Chairman. 

The CHAIRMAN. I thank my colleague. 

Senator Daines? 

Senator DAINES. Mr. Chairman, thank you. Ambassador Tai, 

thanks for coming here today. 

I think about 95 percent of our world’s consumers live outside 

the United States, and here is a guy who represents a State where 

agriculture is the number one economic driver. It is very important 

that we get market access for agriculture, for the sake of our jobs. 

And I do not think it can be overstated, the importance to think 

about the future of agriculture. 

Ambassador Tai, the U.S.-China Economic and Security Review 

Commission recently published recommendations on how to 

counter China’s growing abuse of intellectual property. I think it is 

stating the obvious here, but protecting American IP is something 

I have long fought for, including introducing this bipartisan Protecting IP Act to give the USTR more tools so you can be more effective to push back against China’s abuse. 

I plan to reintroduce this bill to include some of USCC’s recent 

recommendations. You will be seeing that soon. The question is, 

what actions have you taken to implement USCC’s recommendations, and how have you worked to counter China’s growing intellectual property abuses? 

Ambassador TAI. So, Senator Daines, I may need a brush-up on 

the USCC’s mandate, but I know that the USCC, unlike the other 

commission, is here to advise Congress, as opposed to advising both 

the Congress and the executive. 

That said, I do stay apprised of this commission’s work, and 

deeply respect the diligence and the rigor that they bring to their 

work. In terms of intellectual property, this is actually the basis for 

the section 301 action that the Trump administration took in 2018. 

As you may know, we are currently undertaking an exercise at 

USTR, a comprehensive 4-year review of the actions taken pursuant to that 301, with respect to how effective we have been in se-
43 

curing improvements in behavior. That is something that we are 

doing right now. 

Senator DAINES. So, I do have a concern. The USTR is not enforcing some existing agreements—and I will talk in just a moment 

here regarding Japan—agreements that support U.S. companies, 

U.S. products, U.S. intellectual property. In Japan, they will take 

antitrust action against American tech companies, but then they 

will support policies that crowd out competition from the United 

States, despite commitments that have been made in the Japan 

digital trade agreement. We see this in the gaming market, where 

Japan appears to ignore some of these anticompetitive actions from 

Japanese companies, which suppress some of our major U.S. providers. 

I think this is a violation of its digital trade commitments, but 

yet we have not seen action from the USTR. Perhaps you can settle 

that here. Ambassador Tai, will you commit to raising this imbalance with Japan, and commit to increasing enforcement in support 

of U.S. companies, and gaming is one example? 

Ambassador TAI. Senator Daines, this is the second time this 

particular issue has come up in today’s hearing, and so I am sure 

that I have team members who are already working on this and 

pulling information for me. Let me take this back and learn more 

about it, and I will get back to you. 

Senator DAINES. Okay; great. That is a fair answer, and that is 

one of the purposes of some of these hearings, to raise these issues 

and work together here to accomplish better outcomes for U.S. companies. 

Lastly, I have called on Presidents of both parties—this has been 

a bipartisan challenge, whether it has been a Democrat President 

or Republican President—to reengage on the Trans-Pacific Partnership. I believe that is a strategic, important direction we should 

head, both for economic benefits, but I think it is also part of our 

strategy to counter China in the Indo-Pacific region, as it has been 

advancing alternative agreements without the United States. I am 

concerned about the current administration’s lack of ambition as it 

relates to its trade agenda, and the absence of market access commitments to, as you said a few times, level that playing field and 

increase opportunities. I look through the lens here representing 

Montana for farmers, ranchers, and small businesses. 

So just a closing statement. This will not be a question. I just 

urge you to shift course, prioritize reducing some of these unfair 

tariffs and other barriers to trade in IPEF, and pursue some more 

ambitious trade agreements with partners around the world. I 

think it is a great opportunity. You see it, and thanks for being 

here today. 

The CHAIRMAN. I thank my colleague. 

Senator Brown really showed the Congress over the years how 

to come up with responsible enforcement practices, so that we could 

say we are for trade, we are for good-paying jobs, we want to open 

up markets. And Senator Brown said, ‘‘You bet. Just make sure 

you enforce the laws on the books.’’ So I want to recognize him and 

thank him for all he has done all these years on enforcement. 

Senator BROWN. Thank you, Mr. Chairman. Thank you for the 

partnership that you have helped to lead. So important, always 
44 

putting workers at the center. Ambassador, it is a new day with 

the United States Trade Rep. No one has done what you have done 

in terms of putting workers at the center of our trade policy. It has 

usually been trickle-down. It has been corporate interests. It has 

been all that. 

Foreign competitors, as you know, undermine the goal—in too 

many cases, undermine your goals. We will not be able to realize 

the President’s vision of a new American industrial policy without 

stronger trade enforcement. You have talked about the need to update. I have heard you—and I have been in and out today—but I 

heard you twice use the term ‘‘our trade toolbox,’’ noting that many 

of our trade enforcement tools have not been updated. Foreign companies and governments routinely circumvent these laws. Cheating 

is part of their business strategy. 

Last week I spoke with Jim Proctor from McWane, Incorporated. 

It has a large facility in Coshocton, OH. He discussed the game of 

Whack-A-Mole that we face, where countries caught cheating will 

just route their goods through a third country, and companies need 

more tools to fight back. I introduced, with Senator Tillis, the 

Fighting Trade Cheats Act to increase penalties. 

Will this legislation, with its private right of action, help combat 

unfair trade practices that harm manufacturers in the Midwest? 

Ambassador TAI. Senator Brown, I am aware of the legislation 

that you have introduced, and let me just highlight something that 

you said that I really wholeheartedly agree with, which is that a 

lot of our trade tools come from legislative acts from 1974 and 1988 

and 2002. And the need to update them to reflect the challenges 

that we have and all of the lessons that we are learning around 

where Whack-A-Mole happens and where leakage happens is really 

critical. 

So let me just say that I am tremendously supportive of the improvement and the development of the toolbox and adding new 

tools to it. 

Senator BROWN. Thank you. 

For years, I have heard from manufacturers across Ohio, including Cleveland-Cliffs, a major steel manufacturer, forced to compete 

with foreign companies that have learned to avoid AD/CVD orders 

by country-hopping, transshipment, and other circumvention 

schemes. The Leveling the Playing Field Act 2.0 I will be introducing with Senator Young would update U.S. trade laws. Will this 

legislation help curtail this kind of cheating? 

Ambassador TAI. I think that we do need to curtail that kind of 

seepage, and I very much hope so. I am very encouraged by the fact 

that you are continuing to work on this. 

Senator BROWN. Thank you, and we will do that together. 

I also hear from Ohio steel companies concerned about the surging level of steel imports from Mexico. That undermines the agreement that exempted Mexico from section 232 measures, with a condition that Mexico adhere to historic levels of trade in steel. It is 

not happening. 

Last month, Senator Cotton and I led a letter signed by 10 of our 

colleagues on the surge of conduit entering the United States. But 

it is not just about conduit. It is also wire and wire rod. Do you 
45 

plan to raise this concerning import surge with Mexico the next 

time you meet with them? 

Ambassador TAI. Senator Brown, I received that letter and read 

it with a very, very deep concern. I will absolutely raise this the 

next time I meet with my Mexican counterpart. 

Senator BROWN. And if they are not cooperative, section 232 tariffs should be reimposed. I ask that you and the Commerce Secretary recommend that the President take action to do that. 

Last, turning to the Indo-Pacific Economic Framework, one of my 

first votes and one of my proudest votes, other than voting against 

the Iraq War, was against the North American Free Trade Agreement. I have fought for binding enforcement of labor and environmental rules. Workers in Zanesville and Toledo and Ashtabula in 

my State especially were impacted by that. It is why I refused to 

support it. And so the chairman was talking about this previous 

President’s NAFTA renegotiation until we made it better for working people. As a result, the Brown-Wyden labor enforcement rapid 

response mechanism set the new floor from which any future U.S. 

pacts must build. How are you applying the lessons from USMCA 

generally, and the Brown-Wyden rapid response mechanism specifically, to your work on the Indo-Pacific Economic Framework? 

Ambassador TAI. Certainly. The Indo-Pacific Economic Framework is itself structured and designed very differently from our traditional free trade agreements. That said, the Brown-Wyden rapid 

response mechanism shows results to us every single day, has 

helped us to turn the narrative on its head, where we are using 

a mechanism in a trade agreement to help workers secure more 

rights. 

This is something that we very much are looking to replicate in 

our onward trade engagements. So, because it is a different kind 

of arrangement that we are negotiating, we are looking at how we 

can adapt all of the innovative elements of the Brown-Wyden 

mechanism to this particular structure with these particular partners. And it is something where I think we will really need to be 

in close partnership with your office, as well as others. I look forward to being able to engage with you on that. 

Senator BROWN. Thank you. That was Chairman Wyden’s and 

my hope from the beginning, so thank you. 

The CHAIRMAN. I thank my colleague. 

First of all, Ambassador, thank you for being here to answer all 

of the members’ questions. I want to note that so often what happens is somebody says, ‘‘Well, I have only X amount of time,’’ and 

then everyone has to figure out how to deal with that. You never 

said that. You were here. You answered everyone’s questions, and 

I thank you for it. 

A couple of just quick points, and then we are going to liberate 

you and let you get on about your day. With respect to enforcement, I continue to believe, as we have talked about, that the gold 

standard are the provisions from the USMCA. That needs to apply 

to the clean energy side, it needs to apply to the digital side. We 

have heard all this talk about big tech. You know, I am probably 

as involved in these issues as much as any member of Congress. 

My interests are the people who do not have power and do not have 

clout. From the beginning, we focused on their interests, because 
46 

we could democratize the Internet. That was essentially what section 230 was about. So I feel very strongly about speaking up for 

those small businesses that depend on digital and that are digital 

companies in and of themselves and need those kinds of protections 

that Congress agreed to in the USMCA. I hope they will continue 

to apply. 

Now let us talk about this transparency issue, just so we are 

clear about what we are dealing with on the minerals issue, because I talked with the staff during the break and got this whole 

thing unpacked for me. This committee was the lead author of the 

clean energy tax credits. The reason I know something about it is 

because we spent well over a decade trying to break the gridlock 

on climate—you know, nothing was working. You could not do cap 

and trade; you could not do carbon tax. Nothing was working, and 

so, when Senator Manchin invited us to come to West Virginia 

after Waxman-Markey went down, I went, and we started talking 

about using the tax code. It is simple, it is linear. That is why we 

feel so strongly about these kinds of issues, and that is the backdrop of it. 

Now, when I asked you about the staff negotiations, I think I did 

not really go into specifically what our concerns were about. So I 

asked the staff during the break. What we have gotten as of this 

point, with respect to the negotiations, is an initial offer that our 

country made to Japan with respect to critical minerals. That is 

why I am so concerned. So I look forward to working with you. We 

are not going to go back over all of this again. But to build the kind 

of trust that you and I want—because we share so many of the 

same views on these kinds of issues—we are just going to have to 

get people more than an initial offer on an issue that is so central 

right now to making sure that we get implemented what we 

worked on for well over a decade. 

A lot of members of this committee, as you know, Madam Ambassador, really cast a lot of gutsy votes. They did not know anything 

was going to happen, but they wanted to do it because it was right, 

and we wanted to break decades of gridlock. So we do not need to 

go through that anymore. But I just wanted to put that in context. 

Also, members on both sides know that questions for the record 

are due March 30th at 5 p.m., and the last word for the morning, 

Ambassador, is again our thanks, because I think you showed your 

commitment to working with us this morning, just by saying, ‘‘I am 

going to be there; I am going to answer your questions.’’ And I am 

sure some of this was not the most fun to be part of. We will be 

looking forward to working closely with you in the days ahead. 

With that, the Finance Committee is adjourned. 

[Whereupon, at 12:41 p.m., the hearing was concluded.] 
(47) 

A P P E N D I X 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF HON. MIKE CRAPO, A U.S. SENATOR FROM IDAHO

Thank you, Mr. Chairman. Welcome, Ambassador Tai. 

Members of this committee have very thoughtful ideas to advance the trade interests of the American people. For example, just yesterday, Senator Young was recognized by the National Foreign Trade Council for his leadership on digital trade. 

Critically—and I know this from personal experience—every Senator on the committee wants to work with you, Ambassador, on a bipartisan basis, to execute a successful trade policy. The challenge we face is how this administration approaches 

U.S. trade policy, both in terms of substance and process. Substantively, the President’s trade agenda emphasizes ‘‘the groundbreaking domestic investments enacted 

through the President’s leadership.’’ 

Respectfully, however, an American trade policy cannot rest on massive spending 

on subsidies. That approach borrows more from China’s traditions than ours. American trade policy unleashes our people’s talent and productivity by removing foreign 

barriers through tough negotiations and enforcement. The potential of the American 

people is staggering; what the administration proposes as a trade negotiation and 

enforcement agenda is strikingly limited. 

A few examples are indicative. 

First—American ranchers and farmers produce the world’s best and safest food, 

and exported $196 billion in 2022. They can accomplish even more if we eliminate 

the high tariffs and unscientific restrictions posing as safety measures. 

The only tariff reduction flagged in the President’s agenda is that India will reduce its tariff on pecans to a still overly restrictive 30 percent. Instead of aggressively challenging non-science-based safety measures, the administration has only 

this month initiated ‘‘technical consultations’’ on Mexico’s biotech restrictions. 

Second—American workers are highly skilled at manufacturing and have drawn 

nearly $1.9 trillion in foreign investment, including in major auto manufacturing facilities in Spartanburg, SC; Smyrna, TN; and Marysville, OH, to name a few. That 

kind of investment coupled with American workers’ talent should make us an export 

powerhouse, but unreasonable product specification standards continue to keep our 

manufacturing out of many markets. Yet the administration chooses not to pursue 

a ‘‘technical barriers to trade’’ chapter, or TBT, in its proposed Indo-Pacific Economic Framework (IPEF). 

In contrast, the United States-Mexico-Canada Agreement (USMCA) had a robust 

TBT chapter and explicit commitments that Mexico would continue to accept U.S. 

cars built to U.S. Federal safety standards. 

Third—Our innovators and artists develop lifesaving products, and films and 

music that spread American values. Copyright industries alone generate $1.8 trillion in economic output. 

Yet, instead of working to strengthen U.S. intellectual property rules, the administration actually waived U.S. intellectual property rights for COVID vaccines under 

the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property 

Rights (TRIPS) agreement, and is even now considering expanding that waiver to 

diagnostic and therapeutic products. 
48 

And, while we all agree that one of China’s most pernicious mercantilist policies 

is the theft of American intellectual property, the administration does not pursue 

any IP rules in IPEF—or elsewhere—that could help ensure China does not benefit 

from its theft through sales in other countries. 

Fourth—U.S. digital firms are a major contributor to U.S. economic growth, with 

the digital economy now comprising 10 percent of U.S. GDP. The administration has 

yet to press the European Union, through the Trade and Technology Council, on 

measures that unreasonably target the U.S. digital economy, even though it readily 

agreed to discuss the EU’s concerns with the Inflation Reduction Act at the very 

same forum. 

We can do better. We must do better. 

One last example: below is a chart comparing the respective tariff rates that 

American, European, and Chinese products face entering Vietnam, a country of 

nearly 100 million. 

The reason there is no red or yellow ink to reflect the tariffs that Chinese and 

European producers face is not because the Senate print shop ran out of ink. China 

and the EU have concluded trade agreements to reduce their tariffs eventually down 

to zero, while signature American products, like automobiles, apples, poultry, potatoes, milk, and others, will continue to face high tariffs. 

While some of the tariff reductions in the EU and China deals will take time to 

phase in fully, we lose ground every day we remain on the sidelines of real trade 

negotiations. Given this dynamic, the administration needs to reconsider its decision 

not to pursue market access in IPEF or other trade arrangements. 

Unfortunately, the ability to take on these substantive challenges is compounded 

by one, very fundamental problem: the administration’s insufficient consultation 

with Congress. We saw this problem with the negotiations for the TRIPS waiver, 

and they still continue. 

In the case of IPEF, the administration refuses to share the views of the same 

congressionally established advisory committees that assist Congress in determining 

whether a proposed trade agreement will assist Americans. The text of the relevant 

statute is below, and it is crystal clear that such information must be shared with 

designated members of Congress. 
49 

The administration also refuses to share attributions of which countries support 

or oppose particular provisions of IPEF, even though the Trump administration provided such information during USMCA consideration. This attempt to bypass Congress is unnecessary. Our trade policy is strongest when the administration and 

Congress work together. 

The administration should accordingly partner with Congress and the American 

people—not try to cut us out—because under the Constitution, it cannot. 

PREPARED STATEMENT OF HON. KATHERINE C. TAI, UNITED STATES TRADE

REPRESENTATIVE, EXECUTIVE OFFICE OF THE PRESIDENT

Thank you, Chairman Wyden, Ranking Member Crapo, and members of the committee. I appreciate the opportunity to be here today to discuss the President’s 

Trade Agenda. 

President Biden promised to build the economy from the bottom up and the middle out, and he is delivering on that promise. 

Unemployment is at its lowest rate in over 50 years. Manufacturing is rebounding 

faster than it has in almost 40 years. We are seeing the strongest 2 years for small 

business applications on record with 10.5 million new businesses created. Wages are 

rising, especially for lower- and middle-income workers. We have seen more jobs created in 2 years than any other administration has seen in four. 

Trade is an integral part of this pursuit of durable and inclusive economic growth. 

Our administration continues to believe that trade can be a force for good. We are 

writing a new story on trade. One that puts working families first and addresses 

today’s pressing issues. One that brings more people in and reflects more voices 

across the American economy. One that advances our global priorities and strengthens democracy here at home and abroad. 

Whether you have a college degree or not, whether you have five employees or 

five hundred, whether you are in rural Ohio or in the heart of Baltimore, whether 

you are a small dairy farmer in Michigan or a steelworker in Pennsylvania—we are 

restoring fundamental fairness to our trade and economic system. 
50 

We are leading on the world stage with this vision. We are collaborating with 

partners and allies to create broad-based economic growth and to continue the 

strong, united response to Russia’s brutal invasion of Ukraine. 

I am pleased to tell you today that we are making significant progress on these 

goals. Let me give you some examples of what this looks like. 

ENGAGING WITH KEY TRADING PARTNERS AND MULTILATERAL INSTITUTIONS

President Biden has said that the United States is opening an era of relentless 

diplomacy to address the challenges that matter most in the lives of all people. 

Trade is an important part of this relentless diplomacy. Over the last year, we have 

been leading with a positive economic vision around the world, and our partners and 

allies are joining us. 

We launched negotiations on the Indo-Pacific Economic Framework for Prosperity 

to deliver real opportunities for our people throughout the region. We are focusing 

on priorities like labor standards, the environment, science-based and transparent 

regulatory systems, and an inclusive digital economy. We had successful rounds of 

negotiations in December and earlier this month, and we are looking forward to a 

busy 2023 to make further progress. We also kicked off the Americas Partnership 

for Economic Prosperity with eleven countries in our hemisphere. 

We already have deep economic ties in the region, including free trade agreements 

with eight of our initial partners. Regionalization is an integral part of building resilience in our economy. By strengthening our relationships with our closest neighbors, we can drive sustainable economic growth and bolster our collective resilience. 

We have also been busy on the bilateral front. Through the Trade and Technology 

Council, we are collaborating with the European Union on imposing economic costs 

on Russia and Belarus, addressing economic coercion and non-market policies and 

practices, facilitating trade in emerging technologies, protecting workers’ rights, and 

strengthening our supply chains. 

We are also negotiating a Global Arrangement on Sustainable Steel and Aluminum. This will drive decarbonization while also limiting anticompetitive and nonmarket practices that contribute to worldwide excess capacity, including from the 

People’s Republic of China (PRC), which threatens American workers and businesses. It also shows that effective climate action can also support good-paying jobs 

here at home. 

We also launched new initiatives with key partners in other important regions. 

Taiwan is a vibrant democracy and an important trading partner in East Asia, and 

we started the groundbreaking U.S.-Taiwan 21st Century Trade Initiative last June. 

Our teams have been working diligently to deliver high-standard commitments 

and economically meaningful outcomes, covering everything from trade facilitation 

and good regulatory practices to services domestic regulation and anticorruption. 

Another important region for us is sub-Saharan Africa. Like I said during the 

U.S.-Africa Leaders’ Summit, I believe the future is Africa, and we are ramping up 

our engagement to deepen our partnership with the continent. 

Last July, we launched the U.S.-Kenya Strategic Trade and Investment Partnership. We held our first round of conceptual discussions in February, and we will continue conversations this year to discuss important issues, including agriculture, digital trade, and supporting participation of women, youth, and others in trade. 

We also signed an MOU with the African Continental Free Trade Area Secretariat, which will facilitate greater cooperation on trade and investment between the 

United States and the continent. 

On the multilateral front, our administration has been clear that we are committed to the WTO. We continue to believe that the organization can be a force for 

good and address global challenges as they arise. This was demonstrated when we 

worked with other WTO members to deliver meaningful outcomes during the last 

ministerial meeting, including on COVID–19 vaccines, fisheries subsidies disciplines, and food insecurity. 

Speaking of fisheries subsidies, I was in Oregon last April with Senator Wyden 

and Senator Merkley to meet with fishers, and I also toured a groundfish vessel. 

We spoke about how our fishers are disadvantaged by unsustainable fishing practices, including illegal fishing and harmful subsidies. The WTO outcome is a step 
51 

in the right direction to empower these fishers to compete on a level playing field 

and succeed. 

These were important outcomes, but the WTO must change to be more relevant 

and address the challenges of our time, including on dispute settlement and other 

areas. This administration has—and will continue to—work with other members on 

reform. 

Lastly, we are excited to serve as the APEC host this year, with the theme of 

‘‘Creating a Resilient and Sustainable Future for All.’’ This demonstrates our commitment to the Asia-Pacific, and we are taking full advantage of our host year to 

collaborate with partners to build a more durable and resilient global economy. That 

includes lifting up workers and women entrepreneurs, empowering small businesses 

to enter the market, grow, and compete, and unlocking economic opportunities for 

those who have been underrepresented in all of our populations. 

Going forward, USTR will remain in close coordination and consultation with this 

committee and Congress to keep you updated as we develop our frameworks and 

initiatives. 

ADVANCING A WORKER-CENTERED TRADE POLICY

Workers are at the center of our trade policy. American workers can compete anywhere if the competition is fair. That is why we have been laser-focused on using 

trade to defend workers’ rights, both at home and abroad. 

We have been using the USMCA’s rapid response mechanism (RRM) diligently to 

bring tangible changes and defend the right of workers to freedom of association and 

collective bargaining. From March 2022 through February 2023, we secured wins for 

workers at four different facilities. We have an open case and are working with 

Mexico to address violations at that facility, and just last week, the Government of 

Mexico accepted our request to review yet another case. This is important because 

it drives a race to the top by elevating labor standards across the region. 

In September, we launched the Trade and Labor Dialogue with the European 

Union, to bring labor, business, and government representatives to address forced 

labor in supply chains. We will also expand this work to address the needs of workers and employers in navigating the digital transformation of our economies and 

workplaces. 

In January, we launched a task force with Japan to work on forced labor issues, 

and USTR is crafting our first-ever trade strategy on forced labor and conducting 

an interagency review of our existing tools to address this issue. 

We also recognize that farmers, ranchers, fishers, and food manufacturers are key 

to our worker-centered trade policy. Last August, I visited Spellman Farm, a sixthgeneration family farm in Woodward, IA growing corn and soybeans. Sam Spellman 

was explaining how he is focusing on sustainable farming, including researching the 

effects of cover crops and no-till on Iowa’s soil and nutrient retention. I could sense 

the immense pride he took in his work, not only for his own farm, but in educating 

fellow farmers. 

That is what our work is about: restoring pride and dignity for our workers. Empowering them to compete and thrive. And we have achieved several economically 

meaningful wins for our agricultural sector over the last year. 

We brought into force an amendment to Japan’s beef safeguard mechanism under 

the U.S.-Japan Trade Agreement, which will provide more predictability for U.S. exporters to meet Japan’s growing demand for high-quality beef. 

We signed the U.S.-EU Tariff Rate Quota Agreement to provide certainty to U.S. 

exporters and open markets for U.S. agricultural products such as rice, wheat, corn, 

and beef. 

We also opened access for U.S. pecan exports to India, following a 70-percent cut 

to tariffs. This was a big win for farmers and was a result of the successfully revitalized United States-India Trade Policy Forum. 

We have a nimble USTR team that is opening markets for our agricultural sector, 

and we will continue to work with Congress to find additional opportunities. 

REALIGNING THE U.S.-CHINA TRADE RELATIONSHIP

Another component of our trade agenda is the realignment of the U.S.-China 

trade relationship. This relationship is one of profound consequence. As the two 
52 

largest economies in the world, our bilateral engagement affects not just the two 

participants, but the rest of world. 

We recognize that the relationship is complex and competitive. And yet, American 

workers, farmers, producers, and businesses should not have to compete against the 

PRC’s state-led policies, labor rights suppression, weak environmental regime, or 

other distortions that put market-oriented participants out of business. 

While we continue to keep the door open to conversations with the PRC, including 

on its Phase One agreement commitments, we must also vigorously defend our values and economic interests from the negative impacts of the PRC’s unfair economic 

policies and practices. 

That means making groundbreaking investments here at home so that we can 

compete—and collaborate—from a position of strength. That is exactly what our administration is doing. We are fixing our roads and bridges through the Bipartisan 

Infrastructure Law, bolstering our capacity for critical technologies through the 

CHIPS and Science Act, and incentivizing the manufacturing of clean energy technology here at home through the Inflation Reduction Act. 

That also means coordinating with our partners and allies to confront policies and 

practices that are fundamentally at odds with a global trading system based on 

market competition. An example of this is the U.S.-EU Cooperative Framework for 

Large Civil Aircraft. We held a ministerial meeting last December. We are analyzing the PRC’s non-market policies and practices in this sector, and we are considering tools needed to effectively counter them. We are also exchanging views on the 

long-term risks posed by the PRC’s state-directed industrial dominance goals to 

market-oriented sectors. 

We are working to deepen our understanding of the PRC’s state-directed industrial targeting goals and to more effectively defend our market-oriented aerospace 

workers and companies. 

In May 2022, USTR also commenced a comprehensive 4-year review process of the 

section 301 tariffs on imports from the PRC. We are mindful of the effects that trade 

actions can have on American businesses and workers. At the same time, we are 

taking a deliberate and strategic look at how our economic interests can be served 

in light of the PRC’s continued unfair policies and practices. 

PROMOTING CONFIDENCE IN TRADE POLICY THROUGH ENFORCEMENT

Doing trade the right way means standing up to the forces that have harmed and 

undermined workers, producers, and communities to not just thrive but sometimes 

also to survive. That is why the Biden administration remains fully committed to 

vigorously enforcing our trade agreements. We will continue to use all of the tools 

at our disposal to combat unfair, non-market practices, defend American jobs, and 

create broad-based economic prosperity. 

As I mentioned earlier, we have been diligently using the USMCA’s RRM to defend workers’ rights in Mexico. But our enforcement under the USMCA does not 

stop there. 

We established a dispute settlement panel to address our concerns with Canada’s 

revised dairy restrictions. We are also consulting with Mexico to address our concerns with measures that undermine American energy companies. We also continue 

to engage with Mexico to address concerns regarding agricultural biotechnology. 

Mexico’s policies threaten to cause serious economic harm to U.S. farmers and stifle innovation that can promote global food security. On March 6th, the United 

States requested technical consultations with Mexico under the USMCA. If our concerns are not resolved through technical consultations, we will consider all options 

to fix this problem, including by taking additional steps under the USMCA. 

We are also upholding the eligibility requirements in our preference programs, in 

line with our worker-centered agenda and in accordance to the statutory eligibility 

criteria. In November 2022, after using all diplomatic measures available to induce 

the government to remediate the issues, President Biden announced the termination 

of Burkina Faso’s eligibility for the African Growth and Opportunity Act (AGOA) 

trade preference program, due to concerns with the unconstitutional changes in government in the country. We remain committed to working with Burkina Faso to 

meet the statutory benchmarks that would enable it to be reinstated in the AGOA 

program. 
53 

We recognize that many of our existing trade tools may not adequately address 

the challenges posed by today’s economy, so we will continue to work with Congress 

to identify areas where new tools may be needed. 

PROMOTING EQUITABLE, INCLUSIVE, AND DURABLE TRADE POLICY

AND EXPANDING STAKEHOLDER ENGAGEMENT

I want to close where I started: on how our new story on trade strives to bring 

more people in and reflect more voices across the American economy. This administration is promoting inclusive and durable trade policy for all Americans. 

Last month, along with Senator Durbin, I had the opportunity to visit a welding 

class in Chicago, with a group of local tradeswomen. Listening to their stories, I was 

reminded of what President Biden said during his State of the Union Address—that 

he ran for President ‘‘to fundamentally change things, to make sure the economy 

works for everyone so we can all feel pride in what we do.’’ 

Fairness and equity must be bedrock principles in trade policy. That means having diverse voices at the table—especially underserved and marginalized communities that have been historically left out of trade policymaking—and incorporating 

their priorities into our policies. That is why USTR released our Equity Action Plan 

last April. We developed this plan in accordance with President Biden’s Executive 

Order on Advancing Racial Equity and Support for Underserved Communities 

Through the Federal Government. 

Not only that, I have had the honor to serve as the co-chair of the White House 

Initiative and President’s Advisory Commission on Asian American Native Hawaiian and Pacific Islanders, and as a member of the Gender Policy Council and White 

House Council on Native American Affairs. 

In January, the White House convened Federal Government officials and community leaders to release the Biden administration’s first-ever National Strategy to Advance Equity, Justice, and Opportunity for AA and NHPI Communities. This includes detailed plans from thirty-two Federal agencies, including USTR, which build 

on the administration’s previous actions to promote safety and equity for AA and 

NHPI communities. 

I am incredibly proud to be a part of this important work, but we know there is 

more that we can do to make trade policy more equitable and inclusive. So, we are 

continuing to work with the U.S. International Trade Commission on the distributional effects of trade on American workers and sustaining our engagement with diverse communities across our country. 

This engagement includes Congress and this committee. You are our constitutional partner on trade, and the administration recognizes Congress’ important role 

in crafting trade policy. We will continue this partnership through regular briefings 

with you and your staff. 

Two years into this administration, we are leading with a positive economic vision 

in key parts of the world, and we are already starting to see results. None of this 

is possible without the devotion and professionalism of our USTR staff, and I am 

grateful for their expertise and dedication as we press forward to finish the job. 

Thank you for your time, and I look forward to answering your questions. 

QUESTIONS SUBMITTED FOR THE RECORD TO HON. KATHERINE C. TAI

QUESTIONS SUBMITTED BY HON. RON WYDEN

Question. The U.S. potato industry estimates that Japan has the potential to be 

a $150-million market annually for U.S. fresh potatoes, much of which is expected 

to come from Pacific Northwest farmers. However, the Japanese Government has 

long denied market access for U.S. fresh potatoes due to concerns regarding pests. 

The United States has formally requested market access for table stock potatoes, 

and Japan has formally recognized the U.S. request. Yet, despite multiple attempts 

by USDA to supply Japanese officials with information, as well as site visits, the 

Japanese government has made little progress on a pest risk assessment (PRA) on 

U.S. table stock potatoes. 

What is the status of USTR’s efforts to obtain market access for U.S. table stock 

potatoes in Japan, including by pressing Japan to complete its PRA? Is USTR en-
54 

gaging on this market access request in the context of the Indo-Pacific Economic 

Framework (IPEF) negotiations? 

Answer. USTR continues to raise the market access request for U.S. table-stock 

potatoes under the U.S.-Japan Partnership on Trade to advance the request in a 

timely and science-based manner. In the context of the Indo-Pacific Economic 

Framework, USTR envisions that the agriculture negotiations will enhance market 

access for U.S. agricultural exporters by, for example, advancing the implementation 

of science-based policies and improving transparency in the development of import 

rules and regulations. 

Question. Oregon’s dairy farmers produce top-of-the-line dairy and dairy products, 

exports of which achieve the twin goals of increasing economic competitiveness in 

Oregon and supplying the growing demand for U.S. dairy products abroad. However, 

our trading partners are increasingly misusing geographical indications to limit the 

use of common food names, leading to unfair results for Oregon’s dairy farmers. 

What is USTR doing to ensure common food names can be utilized on labels and 

advertisements in priority export markets, beginning with our existing FTA partners? Is USTR raising this issue in the context of the Indo-Pacific Economic Framework (IPEF) negotiations? 

Answer. USTR has been pressing trading partners on their geographical indication policies and pushing trading partners to keep their markets open for U.S. agricultural products that rely on the use of common food names. For example, in the 

context of IPEF, we are working bilaterally with certain partners, including Australia, the Philippines and Singapore, seeking to preserve long-term market access 

for U.S. cheeses and meats that are important to dairy farmers in Oregon and 

across the United States. In addition, we are engaging other FTA partners such as 

Chile, to effectively address and mitigate concerns regarding geographical indication 

policies. 

Question. With respect to the EU, what is USTR doing to address this trade irritant? 

Answer. USTR remains concerned regarding the European Union’s (EU), and 

some other trading partners’ efforts to seek automatic protection for certain cheese, 

meat, and other food terms as geographic indicators (GIs), which imposes barriers 

on market access for U.S.-made goods relying on the use of common names. USTR 

is pushing for transparency and procedural fairness concerning the protection of GIs 

and to ensure that any granting of GI protection does not deprive U.S. industries 

of their ability to use common names in the marketing of food products. 

Question. The United Kingdom is now free to move away from the many protectionist practices of the European Union that have created an imbalance in agricultural trade across the Atlantic. But the UK remains under pressure from the EU 

to continue to align its practices with the EU’s non-scientific, overly burdensome approach to agricultural trade. That poses a significant problem, as those existing EU 

policies have led to a deep Transatlantic agricultural trade imbalance. 

How is USTR leveraging the joint U.S.-UK Dialogues on the Future of Atlantic 

Trade to encourage the UK to reduce trade barriers to U.S. wheat and other agricultural products and ensure any sanitary and phytosanitary regulations are science 

based? 

Answer. USTR is working with the UK to deepen our bilateral trade ties. In bilateral discussions, we have emphasized the need to reduce restrictive tariff and nontariff barriers and to allow U.S. products to fulfill demand within the UK, especially 

given rising global food prices. We have stressed, in particular, the need for the UK 

to ensure that sanitary and phytosanitary measures are science-based. 

Question. Additionally, both the EU and UK maintain prohibitive tariffs on U.S. 

wheat under 13.5-percent protein, which is the majority of Oregon wheat production. By contrast, the United States has long allowed EU and UK wheat to enter 

the U.S. duty-free. 

Recognizing that you are not pursuing traditional free trade agreement negotiations, are there opportunities for discussion on reducing tariff barriers to U.S. agricultural exports in potentially large markets such as the EU and the UK? 

Answer. We have emphasized to all our trading partners, both bilaterally and 

multilaterally, the need to reduce restrictive tariff and non-tariff barriers and to 

allow U.S. products to fulfill demand, especially given rising global food prices. We 

continue to make this point to both the UK and the EU. The United States con-
55 

tinues to raise concerns with the EU at the WTO to ensure that the EU complies 

with its international obligations. 

Question. Oregon’s wheat growers are highly dependent on international trade 

and market access, as approximately 90 percent of Oregon wheat production is exported into an increasingly competitive global market. India is an important market 

for Oregon wheat exports, though exports to India have been stymied by a number 

of trade barriers from the Indian government, including domestic subsidies. I appreciate the steps that the United States Government has taken to hold India accountable for its unfair trade practices that harm U.S. farmers, including filing an additional counter-notification with the World Trade Organization (WTO) in April 2023. 

What other actions is USTR taking to ensure India makes the necessary changes 

to comply with its WTO commitments? Is USTR considering pursuing a formal dispute settlement case against India? 

Answer. We appreciate that India is a notable competitor for U.S. farmers, including Oregon wheat farmers, and its agricultural policies impact our ability to export 

grains and other products to both India and world markets. The United States is 

actively coordinating with a growing number of WTO members who are also deeply 

concerned about India’s trade-distortive measures, including its domestic subsidies. 

The next step is for the counter notification, which is co-sponsored by four WTO 

members in addition to the United States, to be on the agenda for the June 27th– 

28th WTO Committee on Agriculture meeting where we expect a robust discussion 

of India’s policies. We will continue to closely monitor India’s policies and actions 

and continually assess our options for holding India accountable to its WTO commitments. 

Question. Japan is a critical market for frozen blueberries from the Pacific Northwest. The U.S.-Japan Trade Agreement eliminated tariffs on frozen blackberries, 

raspberries, and strawberries, but not on frozen blueberries. As a result, Pacific 

Northwest blueberry growers currently face a 6- to 9.6-percent tariff on frozen blueberry exports to Japan, putting them at a disadvantage with respect to growers in 

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) 

countries, who can trade freely with Japan on all blueberry products. 

Is USTR seeking to address this trade barrier for Pacific Northwest blueberry 

growers, either through a technical amendment to the U.S.-Japan Trade Agreement 

or through other venues for dialogue? 

Answer. While tariff negotiations are not being considered at this time under 

IPEF, USTR envisions that IPEF’s Trade Pillar will enhance market access for U.S. 

agricultural exporters by, for example, advancing the implementation of sciencebased policies and improving transparency in the development of import rules and 

regulations. USTR is not currently considering reopening the U.S.-Japan Trade 

Agreement tariff negotiations, but may request that Japan consider unilaterally reducing its tariffs for frozen blueberries on a most favored nation basis. 

Question. Pacific Northwest growers continue to face barriers to tree fruit export 

in the Indo-Pacific, including sanitary and phytosanitary (SPS) measures. These 

measures are ostensibly imposed to protect health and safety, but in reality are 

often a protectionist tool used to keep U.S. products out of export markets. For instance: 

• Since 2017, Pacific Northwest apple growers have sought non-fumigated access to the Japanese market. Currently, Japan requires fumigation, which 

damages fruit quality, rendering apple access to Japan not commercially viable. U.S. industry estimates that with non-fumigated access, Japan could develop into a $20-million market for U.S. apple exports. 

• For decades, Pacific Northwest growers have sought access to the Australian 

market for apples and pears, but phytosanitary issues continue to impede 

market access. U.S. industry estimates that Australia could become a $16- 

million market for apples and a $4.5-million market for pears. 

• South Korea has long prohibited the importation of apples and pears from the 

United States due to phytosanitary concerns. U.S. industry estimates that resolving the phytosanitary barriers in South Korea for apples and pears would 

result in yearly sales of $10 million to $25 million. 

Will the Indo-Pacific Economic Framework (IPEF) include binding commitments 

requiring parties to implement science-based measures and eliminate non-tariff bar-
56 

1https://ustr.gov/about-us/policy-offices/press-office/press-releases/2022/november/readoutambassador-katherine-tais-meeting-canadas-minister-international-trade-export-promotion. 

riers that prevent American producers from accessing markets in the region? If yes, 

how does USTR plan to make these commitments enforceable? 

With respect to the trade concerns described above, is USTR seeking to resolve 

them through the IPEF? 

Answer. Within the trade pillar of IPEF, the United States will encourage partners, including Japan, Australia, South Korea and others, to implement measures 

that are consistent with U.S. regulatory practices and international standards to 

minimize and eliminate nontariff barriers, issues which prevent American producers 

from accessing markets in Indo-Pacific countries where demand for U.S. food and 

agricultural products is rapidly increasing. To address specific barriers of concern 

and produce tangible benefits for U.S. agricultural producers, USTR will seek to 

promote the use of science- and risk-based decision making to maintain and expand 

market access for U.S. agricultural exports. 

Under the U.S.-Japan Partnership on Trade, the United States has been requesting that Japan allow for import of U.S. apples using a systems approach, which 

would remove fumigation requirement through other mitigation methods. This is a 

priority issue for USTR and we will continue to engage with Japan on the matter. 

We continue to press Australia to uphold their FTA commitments and build fair, 

non- discriminatory and science-based regulatory frameworks. Apples are a top priority issue for USTR in these discussions and we will continue to engage with Australia on the issue. 

In addition to our regular bilateral engagements, the United States engages with 

Korea annually on SPS issues through the KORUS SPS Committee and the KORUS 

Committee on Agriculture, where we continue to press Korea to adopt predictable, 

transparent, and science-based standards. 

Question. Last year, USTR began its statutory 4-year review of the section 301 

tariffs imposed in response to China’s forced technology transfer and intellectual 

property theft. I continue to support these tariffs, as well as other efforts to address 

China’s rampant unfair trade practices. That said, certain tariffs have had negative 

impacts on American businesses and workers, particularly those that need inputs 

to goods manufactured in the United States. I continue to support a comprehensive, 

fair, and transparent exclusion process to allow U.S. producers, manufacturers, and 

importers to request case-by-case relief from these tariffs. 

Please indicate whether you are considering opening an exclusion process, whether as part of the 4-year review or otherwise. 

Answer. Within the 4-year review, USTR is reviewing the overall structure of the 

tariffs, including which products should be subject to additional duties. As part of 

the public comment process, submitters were requested to submit comments on 

whether certain tariff headings should remain covered by the actions or removed. 

USTR continues to consider additional exclusion processes, as warranted. 

Question. On November 30, 2022, you met virtually with Mary Ng, Canada’s Minister of International Trade, Export Promotion, Small Business, and Economic Development. According to the public readout of the meeting,1 you ‘‘expressed concern 

about Canada’s proposed unilateral digital service tax and pending legislation in the 

Canadian Parliament that could impact digital streaming services and online news 

sharing and discriminate against U.S. businesses.’’ Yet, when asked about the meeting during the Finance Committee’s hearing on March 23, 2023, you testified that 

you only raised the Canadian policies to ‘‘understand what the motivations are of 

our trading partners’’ and that you ‘‘raised the question to say [you] would like to 

learn more about this.’’ 

As you are aware, Canada’s pending Online Streaming Act and Online News Act 

both contain discriminatory aspects that disadvantage U.S.-based entities, both 

large and small. These appear to be inconsistent with trade commitments undertaken by Canada as part of the USMCA and WTO. 

During your meetings with Canadian officials, did you clarify that laws and regulations with a discriminatory impact on U.S. entities, regardless of sector, raise concern under Canada’s trade obligations? 

Answer. As I stated at the Senate Finance Committee Trade Agenda hearing, during my meeting with my Canadian counterpart, I raised questions about the Online 
57 

Streaming Act and the Online News Act in order to learn more about the legislation 

and the motivations behind them. 

QUESTIONS SUBMITTED BY HON. MIKE CRAPO

Question. The President’s Agenda states it will conclude its ‘‘paradigm-shifting’’ 

Global Arrangement on Sustainable Steel and Aluminum, this year. Congress has 

not been informed of key details regarding this initiative. 

What methodology does the administration propose to determine the carbon intensity of a particular steel or aluminum product? Please include any information regarding any aspect of the methodology that may consider upstream or downstream 

impacts. 

What legal authority does the administration intend to rely on to enact the Global 

Arrangement? If the administration plans to ask Congress for authority, when will 

Congress receive the administration’s legislative proposal? 

Answer. Under the Joint U.S.-EU Statement on Trade in Steel and Aluminum, 

the United States and the EU recognized their shared commitment to take ‘‘joint 

steps to defend workers, industries and communities from global overcapacity and 

climate change, including through a new arrangement to discourage trade in highcarbon steel and aluminum that contributes to global excess capacity from other 

countries and ensure that domestic policies support lowering the carbon intensity 

of these industries.’’ 

As envisioned by the administration, the Global Arrangement would eventually 

cover all direct (scope 1) and certain indirect (scope 2 and scope 3) emissions. Due 

to current data availability limitations across economies, the initial types of emissions considered for assessing the emissions intensity of the imports may be limited 

to direct emissions for steel and direct and certain indirect (scope 2) emissions for 

aluminum. As data improves over time, this would expand to include more complete 

emissions data, including additional data on indirect emissions (scope 2 and 3). 

As negotiations are ongoing, we are still considering the authority(ies) that may 

be necessary to conclude and implement the Global Arrangement. This will depend 

on the structure and content of the instrument we announce with the EU. We have 

been consulting closely with and will continue to consult with Congress as the negotiations advance. 

Question. USTR is not sharing foreign government proposals related to the IndoPacific Economic Framework with the Finance Committee. Instead, USTR proposed 

that it would eventually provide consolidated texts that would contain some of the 

proposed language. The administration thus undercuts a practice established under 

USMCA by its failure to provide country attributions in these proposed consolidated 

texts. As a result, Congress is left in the dark about who supports which foreign 

proposal. Based on conversations held with foreign governments, none object to Congress knowing this information, particularly since they still want congressional support for a final product to make sure it is durable. 

Will you provide foreign government proposals and attributions? 

Answer. I have worked to ensure that Congress is engaged in the IPEF negotiation process and is both aware of partner country views and able to provide input 

on partner country feedback. USTR has provided the Finance and Ways and Means 

committees with consolidated text that shows edits to negotiating text requested by 

partner countries. USTR has provided the trade committees these consolidated texts 

in conjunction with negotiating rounds and staff from the Ways and Means and Finance committees have traveled to each IPEF negotiating round. During these 

rounds, USTR has met with committee staff to discuss consolidated texts and has 

provided country attributions for specific edits. In addition, these on-the-ground 

meetings during negotiating rounds allow congressional staff to hear partner country views directly from those negotiators. USTR provides its views on partner country feedback and USTR has facilitated meetings between congressional staff and 

partner countries at negotiating rounds so congressional staff can hear directly from 

partner countries and share their views directly with them. Moving forward, USTR 

will continue ensuring Congress is meaningfully engaged in the negotiating process. 

Question. One of the key elements of our digital economy is the creative content 

that we make available through streaming and other digital services. Unfortunately, 

international piracy remains a major problem for this industry. 
58 

Do you agree that modern digital trade agreements need to incorporate baseline 

copyright protections, such as those reflected in the WIPO Internet Treaties? 

Answer. The World Intellectual Property Organization (WIPO) Copyright Treaty 

(WCT) and the WIPO Performances and Phonograms Treaty (WPPT), collectively 

known as the WIPO Internet Treaties, have established norms for copyright protection around the world, particularly with regard to online delivery of copyrighted content. The treaties provide for certain exclusive rights and require parties to provide 

adequate legal protection and effective legal remedies against the circumvention of 

technological protection measures (TPMs), as well as adequate and effective legal 

remedies against certain acts affecting rights management information (RMI).We 

will continue to press trading partners to join these critical treaties. 

Question. The administration proposes negotiating critical minerals agreements 

with countries aggrieved by the clean vehicle credit in the Inflation Reduction Act. 

There is strong interest in Congress to expand production of critical minerals to end 

U.S. supply chain reliance on China. 

What new binding commitments—not reaffirmations—can you point to in the 

Japan Critical Minerals Agreement to stimulate production and trade in critical 

minerals? Please provide any economic data or analysis that supports your position. 

The Inflation Reduction Act includes the term ‘‘free trade agreement,’’ which 

should mean an agreement that actually frees trade. Indeed, the USTR webpage, 

which identifies free trade agreements, lists precisely these types of agreements. 

What, if any, restriction does the administration see in its ability to deem any trade 

or environmental agreement a ‘‘free trade agreement?’’ 

Answer. The Japan Critical Minerals Agreement contains new binding commitments relating to trade in critical minerals with respect to export duties, measures 

to address non-market policies and practices of non-parties, best practices regarding 

investment reviews, efforts to address supply chain disruptions, and activities to 

strengthen labor rights enforcement and protect the environment. Building on the 

2019 United States-Japan Trade Agreement, the Japan Critical Minerals Agreement will strengthen and diversify critical minerals supply chains and promote the 

adoption of electric vehicle battery technologies. 

The criteria governing Treasury’s recent proposal to treat Japan as a ‘‘country 

with which the United States has a free trade agreement in effect’’ are found in its 

recent Notice of Proposed Rulemaking, see section 30D New Clean Vehicle Credit, 

88 Fed. Reg. 23370, 23376 (April 17, 2023). This proposal was based on the Japan 

Critical Minerals Agreement, in the context of other elements of the U.S.-Japan 

trade relationship, as explained in the Notice. 

Question. The administration has yet to respond to the Finance Committee’s December 1st letter to the President calling for congressional approval of IPEF. Meanwhile, our IPEF partners indicate capacity building assistance is required before 

they can commit to IPEF. The President’s current budget flags $50 million to advance IPEF for just this year. Presumably, much more funding will be needed. 

USMCA needed $843 million to enforce the labor and environmental provisions, and 

IPEF has a dozen more countries. 

When will Congress receive a cost estimate for IPEF technical capacity building? 

Answer. Throughout the course of the negotiations, USTR and partner countries 

have discussed potential technical assistance needs. Ultimately, technical assistance 

needs will be assessed by USTR and the Parties based on the outcomes of negotiations of the Trade Pillar (Pillar I). The administration, including USTR, will keep 

Congress apprised of any potential funding needed for IPEF, including, technical assistance and capacity building, through our regular President’s Budget process. 

Question. American leadership on digital trade is critical, particularly at a time 

when China works hard every day to establish its own standards and rules in the 

field. 

Do you agree that the United States must make it a top priority to renew the 

Moratorium on Customs Duties on Electronic Transmissions, well ahead of its expiration, next February? 

Answer. The United States continues to support the practice of not imposing Customs duties on electronic transmissions. USTR remains committed to developing 

rules that govern the emerging and evolving digital economy that support workers, 

consumers, and businesses. 
59 

Question. Do you agree that the United States must consider all appropriate enforcement tools to protect its rights if the moratorium expires and countries decide 

to adopt tariffs on U.S. electronic transmissions? 

Answer. While we remain committed to working with other WTO members to 

build further support for the extension of the moratorium, as well as pursuing a robust discussion about the future of the moratorium and the impact of the digital 

economy on developing members, we will consider all options to address barriers to 

digital trade that negatively impact our workers, consumers, and businesses. 

Question. Do you agree that the United States must press for digital trade rules 

that combat forced disclosures of proprietary computer source codes and algorithms? 

Answer. The United States remains concerned with the harms to U.S. companies 

that can result from actions by foreign governments to force access to or the transfer 

of the source code of software. It is also clear that the use of artificial intelligence 

and algorithms in the United States and its impact on all aspects of society will continue to grow. We are continuing to evaluate the appropriate approach to these 

issues in IPEF at the same time as we follow the debates on this taking place in 

the Congress. 

QUESTIONS SUBMITTED BY HON. MARIA CANTWELL

Question. Thank you for the attention you have placed on working to relieve India’s retaliatory tariffs on American products- and particularly Washington apples. 

You mentioned that you and your office are thinking through ways to get these 

issues resolved. I would like to stay coordinated with you to ensure we are effective. 

Can your staff follow up with my staff about the measures you are considering? 

And please mention any areas where we can be helpful to your efforts. 

Answer. On June 22nd, I announced that the United States and India have finalized an agreement resolving several outstanding trade issues, including the termination of six WTO disputes and the removal of retaliatory tariffs on certain U.S. 

agricultural products, including chickpeas, lentils, almonds, walnuts, apples, boric 

acid, and diagnostic reagents. 

The agreement, which was reached during the Official State Visit of Prime Minister Narendra Modi of the Republic of India, reflects the growing strength of the 

U.S.-India bilateral economic and trade relationship. 

Question. Pacific Northwest seafood processors have remained at the same competitive disadvantage in accessing China’s market for the past several years. Other 

seafood-producing nations can access China without retaliatory tariffs, and they are 

reaping the benefits of China’s increasing demand while U.S. producers are effectively sidelined. Chinese imports of non-U.S. seafood are up 122 percent while their 

import of U.S. products are down 26 percent from 2017—despite purchase commitments. 

Whether part of USTR’s section 301 tariff review or through another process, 

what are USTR and collaborating agencies doing to quantify and evaluate the impacts of China’s retaliatory tariffs on Pacific Northwest seafood producers and exporters? 

More generally, can you provide an update on USTR’s section 301 tariff review? 

Answer. The China section 301 tariffs are currently undergoing a 4-year statutory 

review. As part of this review, USTR requested public views on the effectiveness of 

the actions in achieving the objectives of the investigation into China’s acts, policies 

and practices related to technology transfer, intellectual property and innovation, 

other actions that could be taken: and the effects of the actions on the United States 

economy, including U.S. consumers. USTR also sought views on the impact of the 

actions on U.S. workers, U.S. small businesses, U.S. manufacturing, critical supply 

chains, U.S. technological leadership, and possible tariff inversions. USTR expects 

to complete the 4-year review in the fall of this year. 

More generally, USTR is committed to using all available trade tools to ensure 

that U.S. fishers and other workers in the fisheries sector can compete on a level 

playing field. For example, we know our fishers have to compete with significant 

subsidization by other countries, particularly China. Through extensive U.S. engagement and leadership, WTO members were able to achieve the WTO Agreement on 

Fisheries Subsidies in 2022. The agreement contains several important disciplines, 
60 

including prohibitions on subsidies to vessels or operators engaged in illegal, unreported, and unregulated (IUU) fishing; for fishing regarding overfished stocks; and 

for fishing on the unregulated high seas. The United States was among the first 

WTO members to accept the agreement, and USTR will continue to pursue additional, ambitious disciplines through the continuing negotiations to help improve the 

lives of our fishers and workers. 

Question. As you know, I am totally focused on reopening and making gains in 

huge markets like India. When our delegation met with Prime Minister Modi earlier 

this month, he expressed interest in a free trade agreement with the U.S. He’s concluded FTAs with Australia and UAE. 

I understand that there is no appetite to start such a process, and doing so would 

be a longer-term impact. But the U.S. has taken steps in other markets to reduce 

section 232 tariffs on steel and aluminum, such as the imposition of quotas under 

232 as a way to reduce tariffs. 

With the steel and aluminum tariffs on the table, in addition to GSP, you would 

have some options to resolving retaliatory tariffs on our agriculture. 

What does the U.S. need to do to get India to eliminate its retaliatory tariffs 

against U.S. products? Could you see the U.S. negotiating a reduction of 232 tariffs, 

or the use of quotas? 

In the process of working through India’s retaliatory tariffs and other barriers to 

U.S. trade, could the U.S. negotiate a tariff-rate quota or use a similar tool to make 

our point about steel and aluminum overcapacity, but work towards increasing 

trade—especially agricultural trade? 

Answer. On June 22nd, I announced that the United States and India have finalized an agreement resolving several outstanding trade issues, including the termination of six WTO disputes and the removal of retaliatory tariffs on certain U.S. 

agricultural products, including chickpeas, lentils, almonds, walnuts, apples, boric 

acid, and diagnostic reagents. 

The agreement, which was reached during the Official State Visit of Prime Minister Narendra Modi of the Republic of India, reflects the growing strength of the 

U.S.-India bilateral economic and trade relationship. 

As the U.S. Department of Commerce administers the section 232 process, I would 

encourage you to engage Secretary Raimondo on this matter. USTR is working to 

address the market distorting measures that have led to non-market excess capacity 

in the global steel and aluminum markets, including through a new Global Arrangement on Sustainable Steel and Aluminum that we are currently discussing with the 

European Union. We continue to push India to help address the actions that have 

led to non-market excess capacity, including reengaging in the work of the Global 

Forum on Steel Excess Capacity. 

QUESTIONS SUBMITTED BY HON. ROBERT MENENDEZ

Question. It is my understanding that the U.S. International Trade Commission 

(USITC) will provide a report to USTR on its investigation entitled, ‘‘COVID–19 

Diagnostics and Therapeutics: Supply, Demand, and TRIPS Agreement Flexibilities’’ 

(Inv. No. 332–596) on October 17, 2023. 

Will you share a copy of the report with the committee as soon as you receive 

it from the USITC? 

At what point do you expect the report to be made public? 

Will you consult with the committee prior to making a decision on whether to expand the TRIPS waiver to diagnostics and therapeutics? 

Answer. We expect that, in accordance with its established practice, the USITC 

will transmit the report to USTR on October 17, 2023 and then post it online 30 

days later. USTR will continue to consult with Congress, as well as a wide range 

of stakeholders, as we continue to gather the necessary facts to inform our position 

on the question presently at the WTO, whether or not to extend the ministerial decision on the TRIPS Agreement that covered COVID–19 vaccines to also cover 

COVID–19 diagnostics and therapeutics. 

Question. I understand U.S. companies are facing an issue in Japan’s gaming 

market, where Sony appears to be blocking competition through exclusive deals and 
61 

payments to game publishers not to distribute their games on other platforms. Japan’s equivalent of the Federal Trade Commission has failed to investigate this conduct, which appears to act as a non-tariff barrier to entry to Japan’s market. This 

is particularly troubling because Sony has not adopted policies committing to noninterference in workers’ right to organize like those at Microsoft, which has enabled 

Microsoft employees to freely and fairly organize to form unions. 

Consistent with your focus on advancing fair trade conditions that benefit workers 

and create good jobs, will you bring this matter to Japan’s attention? 

Answer. We will continue to raise concerns with our trade partners on issues that 

may have a negative impact on our workers. In our 2023 National Trade Estimate 

report on foreign barriers, we noted that ‘‘U.S. unions and companies have expressed concern with regard to the enforcement of Japan’s existing competition laws 

in digital market and technology sectors in which Japanese companies are significant participants.’’ 

We have encouraged companies to also raise these concerns directly with the Government of Japan, in particular the Japan Fair Trade Commission. 

QUESTIONS SUBMITTED BY HON. THOMAS R. CARPER

Question. As the world leader in services, the U.S. services sector employs 80 percent of the American workforce, accounts for over 80 percent of U.S. GDP and U.S. 

exports of services directly supported 3.4 million jobs in 2021. However, U.S. services firms still face substantial barriers in foreign markets that hurt U.S. workers 

and the U.S. economy. Many services industries, including the financial services industry, face measures like limitations on the free flow of data across borders, bans 

on the use of cloud services, regulations that discriminate against U.S. firms and 

restrictions on a company’s ownership in a given market. 

How is USTR working to address these issues to help American companies compete on a more level playing field? 

Answer. USTR is engaged globally to ensure that services and digital trade continue to fuel the growth and dynamism of the U.S. economy, and that workers and 

companies of all sizes benefit from and share in this growth. 

Question. China’s influence in the Western Hemisphere—including in expanded 

diplomatic ties and critical areas like infrastructure investment and critical mineral 

mining—continues to be an issue of concern. 

How can we develop a more cohesive regional economic strategy, including a 

proactive plan to meaningfully counter China’s activities and support sustainable investment in the region? 

Answer. In USTR’s engagements in the Americas, we consistently share our concern about China’s influence and the risk it poses for the United States and our allies and partners. In the Americas, we have a strong network of existing agreements, including TIFAs and free trade agreements, to reinforce our economic ties 

and shared values. We are working with our regional partners to use these existing 

tools and develop new initiatives, including regional approaches like the Americas 

Partnership for Economic Prosperity, to build resilience and competitiveness in this 

hemisphere. 

Question. Last year I joined Senator Portman and 39 of our colleagues on a bipartisan letter calling for the administration to establish a more comprehensive exclusion process for imports from China subject to tariffs under section 301 of the Trade 

Act of 1974. The letter was a follow up to an April 2021 letter in which Senator 

Portman and I joined 38 of our colleagues in requesting that the administration restart the tariff exclusion process. 

We continue to hear from American businesses, including many who are working 

to implement key priorities, such as the Bipartisan Infrastructure Law and the Inflation Reduction Act, with concerns that the lack of an exclusions process is driving 

up costs, especially for products manufactured domestically using imported materials and components, and seemingly not achieving their original intended purpose 

in countering China’s unfair trade practices. 

In your opinion, would it be worthwhile to reevaluate the use of these tariffs to 

support the robust goals of the Bipartisan Infrastructure Law and Inflation Reduc-
62 

tion Act, including tariffs impacting sectors and products that are contributing to 

the revitalization of our Nation’s infrastructure and clean energy transformation? 

Answer. As part of the 4-year review of the section 301 tariffs, USTR is reviewing 

the effectiveness of the tariffs in achieving the objectives of the investigation, as 

well as the effect of the tariffs on consumers, workers, and the U.S. economy at 

large. As part of this review, we are considering the existing tariffs structure and 

how to make the tariffs more strategic in light of impacts on sectors of the U.S. 

economy as well the goal of increasing domestic manufacturing. USTR continues to 

consider additional exclusion processes, as warranted. 

Question. As WTO member countries continue to weigh a TRIPS waiver for 

COVID therapeutics and diagnostics, how are you considering the impact of a possible waiver on American jobs and competitiveness? 

Answer. On December 16, 2022, I asked the U.S. International Trade Commission 

to launch an investigation into COVID–19 diagnostics and therapeutics and to solicit information on issues such as the relationship between intellectual property 

protection and corporate research and development expenditures, as well as the location of jobs associated with the manufacturing of diagnostics and therapeutics. We 

will take into account the USITC report, the information solicited by the USITC, 

and other information gathered through consultations with Congress, as well as a 

wide range of other stakeholders, to inform our position on the question presently 

at the WTO, whether or not to extend the Ministerial Decision on the TRIPS Agreement that covered COVID–19 vaccines to also cover COVID–19 diagnostics and 

therapeutics. 

QUESTIONS SUBMITTED BY HON. ROBERT P. CASEY, JR. 

Question. Bolstering the U.S.’s supply chain resilience is a key element of the 

2023 trade policy agenda. As noted within, ‘‘the concentration of our supply chains 

in China contributes to our vulnerability, especially for critical technologies.’’ In 

your written testimony, under the topic of trade enforcement, you stated that ‘‘many 

of our existing trade tools may not adequately address the challenges posed by today’s economy, so we will continue to work with Congress to identify areas where 

new tools may be needed.’’ 

Are there specific areas of trade enforcement that are of biggest concern to you, 

and where can Congress be of most help in your pursuit of enforcing trade agreements, combating unfair, non-market practices, and leveling the playing field for 

American workers? 

As USTR engages with foreign trading partners to advance the U.S.’s resilience 

in critical supply chains, what is USTR doing to ensure pending trade agreements 

reflect U.S. national security interests, particularly regarding investments in critical 

capability sectors? 

Answer. We would welcome an opportunity to engage further with Congress 

around priority areas of trade enforcement. We are actively reviewing our existing 

trade tools in this space and identifying ways to strengthen them, with the recognition that historically, trade agreements and tools might not have addressed the 

challenges we now face. We look forward to continued exchanges on this topic and 

to working together to craft solutions to these pressing challenges. 

The Biden administration is committed to protecting our national security interests. More resilient supply chains can protect the United States from shortages of 

critical products and encourage investments to strengthen our national security, and 

resilience is a key part of our engagement with foreign trading partners. IPEF, for 

example, includes a pillar on supply chains, and the Japan Critical Minerals Agreement requires the parties to confer regarding best practices in investment reviews. 

Question. The Global Arrangement on Sustainable Steel and Aluminum is one of 

the most consequential initiatives between the U.S. and the EU. It could be the umbrella under which the global steel and aluminum market operates for generations 

to come. Pennsylvanians know all too well the lengths to which non-market economies will go to manipulate and skirt U.S. trade enforcement. When non-market 

economies don’t play by the rules, it costs American jobs and American industry— 

which produces some of the cleanest steel on this planet. Thousands of steel workers 

in the Commonwealth have lost their jobs as a result of China’s unfair practices and 

hundreds of thousands of jobs nationwide are at risk if we cannot find a way to 

work with our allies to create a system that meaningfully and sustainably combats 
63 

unfair trade. In some cases, non-market economies have found back doors into our 

Free Trade Agreements, importing goods free of duties that have a high percentage 

of inputs from non-market economies. 

What kind of commitments will you be proposing in this agreement to ensure participants cannot overproduce steel and aluminum, leverage state subsidies, use 

forced labor, and artificially depress global steel price? How will you ensure there 

is not a back door into this agreement by creating strong rules of origin? 

Answer. Under the Joint U.S.-EU Statement on Trade in Steel and Aluminum, 

the United States and the EU recognized their shared commitment to take ‘‘joint 

steps to defend workers, industries and communities from global overcapacity and 

climate change, including through a new arrangement to discourage trade in highcarbon steel and aluminum that contributes to global excess capacity from other 

countries and ensure that domestic policies support lowering the carbon intensity 

of these industries.’’ As envisioned by the administration, membership in the global 

arrangement would depend, in part, on a country’s policies with regard to restricting 

market access for steel and aluminum imports from sources of non-market excess 

capacity (NMEC). We are also envisioning membership criteria that take into account issues such as whether countries are, or at risk of becoming, sources of 

NMEC; the extent to which state-owned or state-controlled enterprises operate in 

a prospective member’s economy; whether sources of NMEC are investing in a country; the extent to which countries are taking appropriate and effective measures to 

address the market distortive effects of NMEC; and the extent to which a potential 

member affords internationally recognized labor rights. 

Question. Pillar 1 of the Indo-Pacific Economic Framework for Prosperity is expansive, containing language that will create the rules of the road on trade for one 

of the most sensitive and fastest growing regions on the global stage. I am encouraged that you and your staff have repeatedly expressed that the U.S. is seeking a 

high standards agreement, using the United States-Mexico-Canada Agreement as 

the basis upon which you will build. Meanwhile, the public, workers, and even some 

congressional staff have been unable to confirm this. I am particularly concerned 

with provisions contained in the digital chapter of Pillar 1. I am particularly concerned that rules surrounding cross border data flows may not consider implications 

for the full gamut of data types, such as data collected on employees by employers. 

How is USTR planning to ensure rules around cross border data flows and data 

localization fully consider sensitive types of data? How have you engaged with the 

interagency and Congress on parallel efforts to address concerns regarding data collected on workers? 

Answer. USTR recognizes that both Congress and regulators seek to preserve policy space to address questions around data, including privacy. We have worked 

closely with labor unions, including through our Labor Advisory Committee, to ensure that any digital provisions are consistent with advancing a worker-centered 

trade agenda. We look forward to continuing to work with members of Congress and 

the labor community on these issues at the same time as we follow the debates taking place in the Congress. 

QUESTION SUBMITTED BY HON. MAGGIE HASSAN

Question. As part of its goal to revitalize domestic manufacturing and combat the 

climate crisis, the administration has been in discussions with the European Union 

to develop a partnership known as the Global Arrangement on Sustainable Steel 

and Aluminum. However, experts expect that most of the growth in global steel capacity in the coming years will come from producers in countries such as China that 

fail to meet the same kinds of emissions standards, that overproduce steel and aluminum, and have state-owned companies involved in producing these goods. 

What steps does USTR plan to take to protect American manufacturers and curb 

global excess steel capacity originating from those countries? 

Answer. Under the Joint U.S.-EU Statement on Trade in Steel and Aluminum, 

the United States and the EU recognized their shared commitment to take ‘‘joint 

steps to defend workers, industries and communities from global overcapacity and 

climate change, including through a new arrangement to discourage trade in highcarbon steel and aluminum that contributes to global excess capacity from other 

countries and ensure that domestic policies support lowering the carbon intensity 

of these industries.’’ As envisioned by the administration, membership in the global 
64 

arrangement would depend, in part, on a country’s policies with regard to restricting 

market access for steel and aluminum imports from sources of non-market excess 

capacity (NMEC). We are also envisioning membership criteria that take into account issues such as whether countries are, or at risk of becoming, sources of 

NMEC; the extent to which state-owned or state-controlled enterprises operate in 

a prospective member’s economy; whether sources of NMEC are investing in a country; the extent to which countries are taking appropriate and effective measures to 

address the market distortive effects of NMEC; and the extent to which a potential 

member affords internationally recognized labor rights. 

QUESTIONS SUBMITTED BY HON. CATHERINE CORTEZ MASTO

Question. During the hearing, I asked you if it was still the administration’s position to support maintaining a 2-year pause on solar tariffs as the Department of 

Commerce conducts a circumvention investigation in the Auxin petition case. You 

indicated you would consult with that department and report back. 

Can you please confirm that the administration’s position remains the same? 

Answer. In May, President Biden vetoed legislation passed by Congress that 

would have repealed the suspension of duties on solar cells and modules pursuant 

to the President’s proclamation of June 6, 2022. 

Question. As I am sure you hear a lot, there are a number of concerns that businesses are having with the 301 tariff exclusion process. A fair and efficient exclusion 

process can be a valuable part of our strategy to counter China’s unfair trade practices. 

As part of USTR’s 301 review, do you have any additional thoughts on how the 

exclusion process can be improved? 

Answer. As part of the 4-year review, we are considering whether adjustments to 

tariff structure may be appropriate, and this could include consideration of an exclusion process. We received a number of comments from the public on ways a future 

exclusion could be altered to be more effective, and USTR continues to consider additional exclusion processes, as warranted. 

QUESTIONS SUBMITTED BY HON. CHUCK GRASSLEY

Question. The Mexican Government has sent no signal that they intend to return 

to a science-based biotech risk assessment. What are you hoping to accomplish in 

the technical consultations? 

Answer. In these consultations and in all our engagement with Mexico, we continue to work to avoid any disruption to U.S. exports of corn or other agricultural 

products to Mexico and to urge Mexico to return to a science-based approach for all 

biotech products. 

Question. If they do not commit to withdrawing their decree, will you file a formal 

dispute settlement? 

Answer. If these issues regarding agricultural biotechnology are not resolved, we 

will consider all options, including taking further steps to enforce U.S. rights under 

the USMCA. On June 2nd, I requested dispute settlement consultations with Mexico 

under the United States-Mexico-Canada Agreement (USMCA). 

Question. In your testimony, you say ‘‘our existing trade tools may not adequately 

address the challenges posed by today’s economy, so we will continue to work with 

Congress to identify areas where new tools may be needed.’’ 

As you conduct the USTR’s statutory 4-year review of section 301 actions taken 

to combat discriminatory Chinese trade practices, I encourage you to consider the 

important of the American Amino Acids industry. 

Do you believe China’s non-market practices in the amino acids industry warrant 

maintaining section 301 tariffs on existing amino acid imports from China, and expanding these tariffs to include lysine and threonine? 

Answer. As part of the 4-year review, we are reviewing the overall product coverage to understand, among other things, the impact of the tariffs on consumers, 

workers, and sectors of the U.S. economy and industries. Our review will consider 
65 

suggestions made during the public comment period to include products not currently covered by the action. 

Question. By using its regulatory system to potentially discriminate against U.S. 

technology, China can limit U.S. farmers’ access to new biotech products; products 

that can help our farmers address the challenges of a changing climate while enhancing global food security. This is not in the spirit of what was agreed upon in 

the Phase One commitments. It will be important to ensure China lives up to its 

Phase One commitments. If not, China’s behavior could have profound negative impacts on the speed of deploying much needed agricultural innovation to U.S. farmers, the stability of U.S. agricultural exports and the American jobs that support 

them, the health of commodity markets and the ability of U.S. farmers to maintain 

their competitive advantage in the global market. 

What is the administration’s strategy with respect to Phase One enforcement, and 

specifically the implementation on the Phase One agreement as it relates to agricultural biotechnology? 

Answer. The Chinese regulatory approval process for products of agricultural biotechnology creates significant uncertainty among U.S. farmers, developers, and traders, impeding farmers’ access to innovative technologies and creating adverse trade 

impacts. China’s commitments relating to agricultural biotechnology remain among 

the most significant commitments under the Phase One agreement for which China 

has yet to demonstrate full implementation. In our bilateral engagement with 

China, we continue to use the consultation mechanism set forth in the Phase One 

agreement as well as other bilateral engagement in an effort to secure China’s full 

implementation of its commitments, including with regard to agricultural biotechnology. 

Question. I have heard concerns that section 301 tariffs have put American manufacturers at an unfair disadvantage to foreign manufacturers in some situations. For 

example, a household appliance produced in Vietnam or Thailand using Chinese 

parts is not subject to 301 tariffs, while a U.S. manufacturer—such as Whirlpool 

that has nearly 3,000 employees in Amana, IA—must pay 301 tariffs if it imports 

those Chinese components and uses them in American manufactured products. 

You acknowledged in your testimony that USTR’s statutory review of the 301 tariffs on goods imported from China is ongoing. You’ve given no time estimate on 

when the review may be completed. 

Is USTR still reviewing all comments received prior to the January deadline from 

all stakeholders? Have you received comments from harmed U.S. manufacturers indicating these tariffs may be having the opposite effect as originally intended? How 

are those situations being considered as the review continues? 

Answer. The China section 301 tariffs are currently undergoing a 4-year statutory 

review. As part of this review, USTR requested public views on the effectiveness of 

the actions in achieving the objectives of the investigation into China’s acts, policies, 

and practices related to technology transfer, intellectual property, and innovation; 

other actions that could be taken; and the effects of the actions on the United States 

economy, including U.S. consumers. USTR also sought views on the impact of the 

actions on U.S. workers, U.S. small businesses, U.S. manufacturing, critical supply 

chains, U.S. technological leadership, and possible tariff inversions. All comments 

submitted through the 4-year review are available on USTR’s comment portal and 

will be given full consideration. USTR expects to complete the 4-year review in the 

fall of this year. 

QUESTIONS SUBMITTED BY HON. JOHN CORNYN

Question. This month we learned from the International Trade Commission that 

U.S. importers bore nearly the full cost of the section 301 tariffs because import 

prices increased at the same rate as the tariffs. Specifically, the International Trade 

Commission estimated that prices increased by about 1 percent for each 1-percent 

increase in the tariffs under sections 232 and 301. In fact, the more than $173 billion in taxes collected by these tariffs effectively fell directly on American businesses, workers, and consumers. 

I’ve previously joined my colleagues on a bipartisan basis on letters to your office 

urging you to restart and reform the section 301 exclusions process. I understand 

the administration is currently reviewing the use of these tariffs. 
66 

What will it take to restart an exclusions process? 

Answer. With respect to the USITC report: 

• The USITC report estimates at the impact on the prices faced by importers 

and downstream buyers, which are often businesses rather than consumers. 

The USITC’s model does not address whether those businesses raised consumer prices in response to the tariffs. 

• The price increases that the report attributes to the tariff actions tend to be 

relatively small on average. 

• The report found certain benefits of the tariff actions, including outcomes consistent with the objectives of the investigations. The section 301 tariffs were 

estimated to have reduced the value of U.S. imports of covered products from 

China. 

• The ITC identified 10 industries directly and most affected by the 301 tariffs. 

For all 10 industries, the report estimates that section 301 suppressed the 

value of imports from China by as much as 72.3 percent (semiconductors) and 

increased the value of U.S. production by as much as 7.5 percent (household 

furniture and kitchen cabinets). 

Within the 4-year review, USTR is reviewing the overall structure of the tariffs, 

including which products should be subject to additional duties. As part of the public comment process, submitters were requested to submit comments on whether 

certain tariff headings should remain covered by the actions or removed. USTR continues to consider whether additional exclusion processes may be appropriate. 

Question. According to the 83rd Annual Foreign-Trade Zone Board report, Texas 

continues to rank at the top in terms of merchandise received and exported out of 

FTZs. This valuable tool plays a vital role in promoting economic development in 

communities, not just in Texas, but throughout the U.S. 

How can we bolster trade programs such as the American FTZ program which is 

designed for trusted partners and securing the supply chain to create and retain 

American jobs in manufacturing and distribution? 

How can the American FTZ program’s rigorous compliance process help companies diversify their supply chains and avoid offshoring American jobs? 

Answer. The Foreign Trade Zone program supports manufacturing production and 

jobs throughout the United States by giving users of the program the opportunity 

to reduce import duty liability under certain circumstances. The program is administered by the Foreign Trade Zone Board, and USTR is committed to working with 

the Board and its member agencies to assist in advancing its mission. USTR notes 

that a newly issued report from the U.S. International Trade Commission confirms 

that FTZ-based duty savings can be substantial for firms producing in U.S. FTZs. 

For some such firms, cost savings from their FTZ usage drive decisions to increase 

production in the United States, thereby increasing investment, manufacturing output and employment. 

Question. Electrical steel is a fundamental input to the distribution transformers 

required to power America’s homes. The current supply of distribution transformers 

is critically low and is stalling or, in some cases, completely halting development. 

I’ve heard reports from constituents that lead times on distribution transformers 

range between 10 and 24 months. I’m concerned this is a result of restrictive trade 

policies with respect to electrical steel. 

Electrical steel is a critical component in distribution transformers. As you know, 

there is only one remaining U.S. manufacturer of the specialty steel, grain-oriented 

electrical steel (GOES), used in distribution transformers. 

Why have imports of GOES from our allies, particularly South Korea and Japan, 

fallen so precipitously in recent years? 

Answer. The Biden-Harris administration is committed to working with U.S. trading partners to address the immediate supply chain challenges from this unprecedented economic recovery and building long-term supply chain resilience for the future. USTR is aware of the concerns you note regarding the availability of grainoriented electrical steel for distribution transformers and will continue to work with 

the U.S. Department of Energy, the U.S. Department of Commerce, and other U.S. 

Government agencies, as appropriate, to ensure that U.S. stakeholders’ views on 

this important issue are taken into consideration. The U.S. Department of Energy 

has been assessing the supply chain risks for grain-oriented electrical steel and 
67 

other transformer inputs and is considering new rules to raise the minimum efficiency standards for certain types of distribution transformers. 

Question. In July 2020, the U.S. Assistant Attorney General for National Security 

indicted Chinese hackers attempting to steal trade secrets from technology and 

biotech companies, including firms working on COVID–19-related treatment, testing, and vaccines. The U.S. described those intrusions as examples of China’s ‘‘brazen willingness to engage in theft’’ of IP to advance their competitive edge. You 

yourself have acknowledged China’s well-established track record of using unfair 

practices to acquire U.S. technology, to the detriment of U.S. innovators and workers. I remain concerned that last June’s TRIPS waiver for COVID–19 vaccines is 

a giveaway of U.S. Government and private-sector-funded biomedical research to 

countries like China for free. I understand China is supposedly carved out, but I 

am not convinced. Now there are discussions to extend this misguided decision to 

COVID–19 therapeutics and diagnostics, and I understand that China has said that 

it would not be carved out. 

Will you commit to not agreeing to any extension of the TRIPS waiver to COVID– 

19 therapeutics and diagnostics that could transfer U.S. technology to China or otherwise benefit China? 

Answer. I appreciate your concern and will continue to consult with Congress on 

this issue. Under the June 2022 Ministerial Decision on the TRIPS Agreement, developed countries, a group that includes Russia, and countries with existing capacity 

to manufacture COVID–19 vaccines who have opted out from the decision, including 

China, are not eligible to benefit from this decision. In the discussions at the WTO, 

I will continue to be clear-eyed about potential risks. 

QUESTIONS SUBMITTED BY HON. TIM SCOTT

Question. A recent report from the International Trade Commission (ITC) concluded that the financial burden of sections 232- and 301-related tariffs are borne 

predominantly by U.S. consumers. Treasury Secretary Yellen at the G7 Summit in 

June 2022 said some section 301 tariffs harm American consumers and businesses 

and are not very strategic in the sense of addressing real issues we have with 

China; however, the Biden administration has signaled no change in course in its 

tariff policy—in fact, its trade agenda as a whole appears to be put on ice with respect to economic matters of any real consequence. 

Do you agree with the ITC’s and Secretary Yellen’s comments? 

Answer. The China section 301 tariffs are currently undergoing a 4-year statutory 

review. As part of this review, USTR requested public views on the effectiveness of 

the actions in achieving the objectives of the investigation into China’s acts, policies, 

and practices related to technology transfer, intellectual property, and innovation; 

other actions that could be taken; and the effects of the actions on the United States 

economy, including U.S. consumers. USTR also sought views on the impact of the 

actions on U.S. workers, U.S. small businesses, U.S. manufacturing, critical supply 

chains, U.S. technological leadership, and possible tariff inversions. 

With respect to the USITC report: 

• The USITC report estimates at the impact on the prices faced by importers 

and downstream buyers, which are often businesses rather than consumers. 

The USITC’s model does not address whether those businesses raised consumer prices in response to the tariffs. 

• The price increases that the report attributes to the tariff actions tend to 

be relatively small on average. 

• The report found certain benefits of the tariff actions, including outcomes 

consistent with the objectives of the investigations. The section 301 tariffs 

were estimated to have reduced the value of U.S. imports of covered products 

from China. 

• The ITC identified 10 industries directly and most affected by the 301 tariffs. 

For all 10 industries, the report estimates that section 301 suppressed the 

value of imports from China by as much as 72.3 percent (semiconductors) and 

increased the value of U.S. production by as much as 7.5 percent (household 

furniture and kitchen cabinets). 
68 

Question. Will the Office of the United States Trade Representative (USTR) work 

with the Department of Commerce and other agencies to ensure that the interests 

of key U.S. steel producers and motor vehicle and component manufacturers are 

well-represented in U.S. trade policy to ensure sufficient U.S. production of key 

products like electrical steel? 

Answer. The Biden-Harris administration is committed to working with U.S. trading partners to address the immediate supply chain challenges from this unprecedented economic recovery and building long-term supply chain resilience for the future. USTR is aware of the concerns regarding the availability of grain-oriented 

electrical steel for distribution transformers and will continue to work with the U.S. 

Department of Energy, the U.S. Department of Commerce, and other U.S. Government agencies, as appropriate, to ensure that U.S. stakeholders’ views on this important issue are taken into consideration. The U.S. Department of Energy has been 

assessing the supply chain risks for grain-oriented electrical steel and other transformer inputs and is considering new rules to raise the minimum efficiency standards for certain types of distribution transformers. 

Question. In 2020, the Department of Agriculture (USDA) and China’s General 

Administration of Customs China (GACC) reached an agreement on a protocol for 

handling outbreaks of avian influenza, limiting China’s highly pathogenic avian influenza (HPAI) bans for impacted U.S. States to 90-days post-virus elimination, disinfection, and cleaning. This was a huge win for the U.S. chicken industry, with 

China becoming its second-largest export market. However, China has failed to 

honor the 2020 agreement since August 2022, preventing eligible States such as Arkansas, Kentucky, New Jersey, Oklahoma, Delaware, and North Carolina from resuming exports. I am not aware of any real substantive concerns raised by GACC. 

Additionally, other leading chicken producing States are on track to become eligible 

in the next couple of months, and there are serious concerns that they will receive 

the same unfair treatment from China. This issue is critical for the industry, with 

many of the products exported from these States flowing through South Carolina’s 

export infrastructure. It is concerning that the Office of the United States Trade 

Representative (USTR) may not be willing to fight for proper enforcement of our 

trade agreements and support constituents in this critical industry. 

Can you tell me if you and other senior leaders have engaged China directly on 

this issue? If not, what is the plan moving forward with USTR and other agencies, 

including collaboration with USDA, to engage your Chinese counterparts? 

Answer. In our bilateral engagement of China, we have been using the consultation mechanism set forth in the Phase One agreement as well as other bilateral engagement in an effort to secure China’s adherence to its obligations relating to 

HPAI, including specifically the need for GACC to permit the resumption of imports 

of poultry from HPAI-free states, consistent with the terms of the Phase One agreement. USTR and other relevant U.S. Government agencies at various levels have 

participated in this engagement, which has focused on multiple Chinese Government agencies, including GACC. 

Question. European leaders have made clear in public statements their intention 

to use the European Union (EU) digital regulatory agenda to preference European 

companies at the expense of American companies. This includes new rules and penalties that affect only a handful of U.S. companies while excluding EU competitors, 

new requirements that will prohibit U.S. cloud service providers from participating 

in the EU Government cloud services market—simply based on their headquarters 

location, and proposed rules to force U.S. companies to share sensitive and proprietary data with EU regulators and competitors. At a high level, the U.S. Government should demand the EU regulate its own companies in the same manner as 

American companies, such as in the Digital Markets Act and Digital Services Act 

and eliminate discriminatory aspects of pending measures, such as the EU Cloud 

Services Scheme and DATA Act. 

What are you doing to secure commitments from the EU to ensure American companies can compete on a level playing field in Europe? 

Answer. The Office of the U.S. Trade Representative has worked closely with the 

National Security Council and other Federal agencies to engage with the European 

Union on a range of issues related to EU digital economy regulation. One of the primary objectives of the Biden-Harris administration is to ensure that the transatlantic marketplace remains open and that both U.S. and EU digital service providers can continue to offer their services in each other’s markets. We are also working to ensure that the EU honors relevant commitments that it has made within 
69 

the World Trade Organization. My team and I will continue to engage with the European Union on these important matters. 

Question. Americans for years have been shouldering the price burden of innovation for new prescription drugs while other countries around the world get a free 

ride. 

Does the Biden administration see a role for the Office of the United States Trade 

Representative (USTR) in addressing imbalances on this front? What tools does 

USTR have to curb international free riding when it comes to prescription drug pricing, and how is USTR currently engaging other nations on this issue? 

Answer. Access to health-care products can be hindered by domestic measures, 

particularly those that lack transparency, lack opportunities for meaningful stakeholder engagement, or appear to exempt domestically developed and manufactured 

medicines. USTR encourages trading partners to provide appropriate mechanisms 

for transparency, procedural and due process protections, and opportunities for public engagement in the context of their relevant health-care systems. 

Question. According to the National Institute of Health’s National Institute on 

Drug Abuse, the fentanyl trade into the U.S. resulted in 70,601 deaths in 2021. 

With the flow of fentanyl only increasing and the current public health emergency 

tied to opioids, I believe we need a whole-of-government approach to address this 

crisis. 

Does the Biden administration see a role for the Office of the United States Trade 

Representative (USTR) in disrupting the international fentanyl trade? What tools 

does USTR have to bring to the international fight against fentanyl financing and 

flows, and how is USTR currently engaging other nations (including China) on this 

issue? 

Answer. USTR recognizes that the illicit fentanyl drug trade constitutes an unusual and extraordinary threat to the national security, foreign policy, and economy 

of the United States and is committed to contribute to the U.S. government’s holistic 

strategy to halt the rising toll of this epidemic on the American people. 

USTR is working with interagency partners, including the Office of National Drug 

Control Policy, to support the Federal Government’s response to illicit fentanyl 

trade. USTR is committed to using existing tools to target key vulnerabilities in the 

illicit fentanyl supply chain and is engaged, along with partner government agencies, to halt the flow of illicit fentanyl in close cooperation with private industry and 

international partners. 

QUESTIONS SUBMITTED BY HON. JAMES LANKFORD

Question. As I read the text of the critical minerals agreement with Japan, I am 

concerned that much of the content of this agreement simply reaffirms existing commitments and will have little substantive impact on our supply chain vulnerabilities 

vis-a`-vis China. In order to pivot from China and diversify our sourcing of rare 

earths, we need to invest in alternative markets alongside our allies—not just sign 

documents about our intentions to work together. I recently introduced the Quad 

Critical Minerals Partnership Act with Senators Warner, Cornyn, and King in order 

to make those investments alongside Japan, India, and Australia. 

What coordination is USTR doing within the interagency, including with the Department of Commerce and the Development Finance Corporation, to complement 

this new trade agreement with substantive economic development policies that will 

incentivize and accelerate alternatives to China for critical minerals? 

In addition to this bilateral initiative with Japan, how does USTR plan to leverage the Quad to advance the President’s trade agenda in the Indo-Pacific? 

What are the administration’s goals within the context of IPEF negotiations to 

bolster supply chain resiliency for critical minerals and rare earth elements? 

Answer. Building on the 2019 United States-Japan Trade Agreement, the Japan 

Critical Minerals Agreement will strengthen and diversify critical minerals supply 

chains and promote the adoption of electric vehicle battery technologies. USTR coordinated closely with other agencies during negotiation of the Japan Critical Minerals Agreement, and we look forward to coordinating with Congress regarding economic policies that would increase our supply of critical minerals. 
70 

We are also coordinating with Quad members to align on trade priorities, including in the context of IPEF negotiations. 

The IPEF seeks to advance resilience, sustainability, inclusiveness, economic 

growth, fairness, and competitiveness for the 14 IPEF economies. We look forward 

to working with like-minded partners on developing secure, resilient supply chains 

that will withstand shocks such as pandemics, but also wars and shipping bottlenecks. The Department of Commerce is leading negotiations for the supply chains 

pillar, while USTR is also working to bolster supply chain resiliency through the 

trade pillar. The smooth movement of goods and services across borders needed to 

create resilient supply chains among IPEF countries requires enhanced disciplines 

related to trade facilitation, transparency measures, and widely accepted good regulatory practices. 

Question. The COVID–19 pandemic exposed our dependence on China for critical 

medical goods, including medical devices and personal protective equipment (PPE). 

One area of continued risk exposure is manufacturing for prescription drugs—both 

finished pharmaceuticals and pharmaceutical components, in some cases, more than 

90 percent of those manufactured. This gives China undue leverage over the health 

security of the United States—and it also limits our ability to respond to any acts 

of aggression by the PRC in the days ahead. 

What are the administration’s goals within the context of IPEF negotiations to 

bolster supply chain resiliency for prescription drugs and active pharmaceutical ingredients? 

What is the administration’s strategy to leverage our existing free trade agreements and trade and investment framework agreements to reduce our risk exposure 

to China for pharmaceuticals and APIs? 

Answer. The IPEF seeks to advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness for the 14 IPEF economies. We look forward to working with like- minded partners on developing secure, resilient supply 

chains that will withstand shocks such as pandemics, but also wars and shipping 

bottlenecks. The Department of Commerce is leading negotiations for the supply 

chains pillar, while USTR is also working to bolster supply chain resiliency through 

the trade pillar. Specifically, the smooth movement of goods and services across borders needed to create resilient supply chains among IPEF countries requires enhanced disciplines related to trade facilitation, transparency measures, and widely 

accepted good regulatory practices. 

USTR is currently engaged in discussions pursuant to various trade and investment framework agreements (TIFAs) with different trading partners with a goal to 

increase supply chain resiliency in the pharmaceutical sector by enhancing regulatory alignment, decrease technical barriers to trade, and increase transparency 

with our trading partners. Additionally, USTR is reviewing its existing free trade 

agreements to identify ways to further create a trading environment that is more 

resilient and sustainable and with sources of goods that come from diversified locations. 

Question. This administration has raised concerns about trade agreements because of jobs being shipped overseas to countries with low labor standards. While 

I understand those concerns, I do not believe they are relevant to a potential FTA 

with the United Kingdom. The UK has high labor standards and more restrictive 

climate standards than we do, so there is not that same risk of losing industry to 

a low-wage, low-standard partner after brokering a market access arrangement. If 

anything, an FTA would provide an opportunity to negotiate market access for our 

agricultural goods that the UK is currently blocking. 

How do you square this concern about low-wage, low-standard economies with the 

UK’s solid track record in these areas? 

Why do you not view the UK as a natural fit for a trade agreement? 

Answer. The United States Trade Representative (USTR) has been actively engaging with the UK on ways the United States and UK can advance our mutual international trade priorities and deepen our trade relationship in a more inclusive, resilient and sustainable manner. Under the U.S.-UK trade dialogues we have been discussing a range of issues, including labor, as well as the environment, trade facilitation, supply chains, and addressing China’s non-market policies and practices and 

economic coercion. I remain open to the best mechanism to formalize this bilateral 

trade engagement between the United States and the UK, whether through a trade 

agreement or other tools. 
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Question. The administration has made ‘‘rebuilding alliances’’ a major focus of its 

foreign policy, yet I don’t see anything in this trade agenda focused on negotiating 

new trade agreements as part of those alliances. I view USTR’s task as twofold: negotiating new trade agreements, and enforcing the trade agreements we have on the 

books to make sure they’re working. This administration has been weak on the negotiating side, which I think is a missed opportunity—particularly in regions with 

high levels of engagement by China, which has been identified in the administration’s National Security Strategy and National Defense Strategy as our primary national security threat. 

How does the 2023 trade agenda advance the objectives of the National Security 

Strategy and the National Defense Strategy? 

Answer. The pandemic, followed by the unprovoked Russian invasion of Ukraine, 

exposed flaws in the traditional approach to trade. That approach prioritized trade 

liberalization, particularly through tariff elimination, and led to concentrated supply 

chains that failed to take into account geopolitical risk. In the United States, manufacturing had been deprioritized. As a result, Americans confronted shortages of a 

range of goods, including personal protective equipment for frontline workers. In response to the exposure of these flaws, the United States is leading the way in working with partners and allies to advance an approach to trade that prioritizes sustainability, resilience, and inclusion. This approach supports our national security 

and national defense strategies by recognizing geopolitical risk, diversifying concentrated supply chains, and building better economic relations with like-minded 

countries. In addition, USTR’s trade engagements—including the U.S.-EU Trade 

and Technology Council, the U.S.-UK Dialogue on the Future of Transatlantic 

Trade, the Indo-Pacific Economic Framework, and the Global Sustainable Steel and 

Aluminum arrangement—are strengthening our relationships with our allies and 

are helping build new bridges in regions that are important to our economic and 

national security interests. 

Question. The administration made the decision to not include Taiwan in IPEF 

negotiations, which was disappointing. However, USTR has pursued the U.S.- 

Taiwan 21st-Century Trade Initiative, which recently concluded its third round of 

negotiations. 

What outcomes can you share from the latest negotiating round with Taiwan? 

Answer. The United States and Taiwan, under the auspices of the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office 

in the United States (TECRO), have held one negotiating round for the U.S.-Taiwan 

Initiative on 21st-Century Trade in Taipei, Taiwan, from January 14–17, 2023. The 

negotiations were productive and on May 18, 2023, USTR announced that the 

United States and Taiwan, under the auspices of AIT and TECRO, had concluded 

negotiations on a number of chapters outlined in our negotiating mandate, and published the proposed agreement text. Those chapters are Customs and Trade Facilitation, Good Regulatory Practices, Services Domestic Regulation, Anticorruption, and 

Small and Medium-Sized Enterprises. The proposed agreement was signed by AIT 

and TECRO on June 1, 2023. 

Moving forward, U.S. and Taiwanese officials, under the auspices of AIT and 

TECRO, will continue negotiations on other chapters under our negotiating mandate. 

Question. Last week, Honduras became the latest country to end diplomatic relations with Taiwan in favor of the PRC. 

What is your plan to include Taiwan in international trade forums alongside other 

nations to ensure our friends in Taiwan have a seat at the table? 

Answer. The administration is committed to finding ways to deepen our economic 

and trade relationship with Taiwan and to negotiate trade agreements with Taiwan, 

just like the United States does with other trade partners. The administration also 

continues to be highly supportive of Taiwan’s participation in international trade forums, including at the WTO and in APEC. 

Question. Following Russia’s invasion of Ukraine, the United States revoked Russia’s most favored nation trade status. 

If China were to invade Taiwan in the future, would the administration support 

revoking China’s preferential trade status as well? 
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Answer. The administration supports cross-Strait peace and stability and opposes 

any unilateral changes to the status quo. In the event of a unilateral change in the 

status quo, the administration has a wide range of responsive actions to consider. 

Question. The International Trade Commission submitted a report to Congress 

earlier this month finding that nearly all of the costs of tariffs imposed during the 

Trump administration—both the 232 tariffs on steel and aluminum and the 301 tariffs on Chinese imports—were passed along to U.S. importers and had little to no 

effect on the exporter. 

Does the administration agree with this finding? Why or why not? 

Answer. The Commission’s modeling suggests that the tariffs were passed along 

to U.S. importers in the short term. The model also finds that as those prices rose, 

the quantity of affected imports from China declined, leading to a significant decrease in their import value. 

The ITC identified 10 industries directly and most affected by the 301 tariffs. For 

all 10 industries, the report estimates that section 301 suppressed the value of imports from China by as much as 72.3 percent (semiconductors) and increased the 

value of U.S. production by as much as 7.5 percent (household furniture and kitchen 

cabinets). 

Question. The biggest challenge we’ve faced since the administration took over is 

the migrant crisis at our southern border. CBP encountered more than 300,000 migrants last month. 

What strikes me is that many of the migrants coming to our border are from 

countries with whom we have a free trade agreement. For example, all three Northern Triangle countries are parties to the Dominican Republic-Central America Free 

Trade Agreement (CAFTA-DR), which was negotiated by the Bush administration. 

Clearly, the potential of this partnership has not been fully realized. 

What mistakes have we made over the last 15 years that have inhibited CAFTA 

from having a bigger impact on the prosperity and stability of the Northern Triangle 

countries? 

How can we better utilize CAFTA as presently written to promote stable and resilient economic development in this region? 

During the Trump administration, we renegotiated NAFTA to update the provisions and adapt to modern challenges. Is the Biden administration open to renegotiating CAFTA and seeking to revise it as part of our strategy to get to the root 

causes of migration in the Northern Triangle? 

Does the administration support preserving Nicaragua’s preferential trade status 

under CAFTA in light of human rights abuses committed by the Ortega regime? 

Answer: While trade has increased under the CAFTA-DR, global economic 

downturns—most recently from the pandemic—frequent natural disasters, and security issues such as narcotrafficking and gang violence have had severe negative impacts on the economies and development of partners in the region. Several CAFTADR countries, particularly in northern Central America, suffer from protracted social crises, extreme violence, and inadequate investment in education and infrastructure. 

Trade policy alone cannot deliver sustainable economic development, poverty alleviation, and social stability, but the CAFTA-DR is an integral part of the administration’s efforts to address the root causes of migration. 

USTR is contributing to the Biden administration’s whole-of-government effort to 

address irregular migration at our southern border, to improve security, governance, 

human rights, and economic development in the region to meet longer-term challenges and create hope for a better future for Central Americans in their home countries. 

USTR engagement with CAFTA-DR partner countries has focused on trade capacity building (primarily in the areas of textiles and apparel and agricultural trade 

and climate resiliency) to strengthen regional supply chains, build sustainable and 

inclusive trade and economic opportunities and formal sector employment in the region. Capacity building and promoting better CAFTA-DR implementation help address shortcomings in Central American trade infrastructure and policy implementation that have undermined the CAFTA-DR benefits for the region. Through Central America Forward, USTR is also working with the Department of Labor and 
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other agencies to advance protection of labor rights in the region to more comprehensively address the root causes of migration. 

With respect to Nicaragua, we share concerns about the crisis of democracy under 

the Ortega regime and have taken a number of actions, including withholding support for Nicaragua’s participation in trade capacity building and technical assistance 

initiatives, and will continue to exclude Nicaragua from these benefits of CAFTADR and other initiatives. 

In addition, President Biden’s October 2022 executive order provides new authority to sanction any person who operates or has operated in the gold sector of the 

Nicaraguan economy and any other sector as may be determined by the Secretary 

of the Treasury, in consultation with the Secretary of State. The EO also provides 

a framework to implement future measures that prohibit new U.S. investment in 

certain sectors in Nicaragua, the importation of certain products of Nicaraguan origin into the United States, or the exportation of certain items to Nicaragua. 

USTR has been and will continue to be an active participant in interagency deliberations on trade-related aspects of our approach to Nicaragua. We will continue to 

actively monitor the situation in Nicaragua, while also recognizing that the CAFTADR is critical to the well-being of the people of Central America. 

Question. When considering Trade Promotion Authority legislation in 2015, the 

Senate unanimously passed an amendment requiring USTR to raise religious liberty 

issues as part of trade negotiations conducted under TPA auspices. Although TPA 

has expired, I hope USTR is continuing to prioritize the promotion of religious freedom for all in its engagements with trading partners—including in multilateral forums such as IPEF. Of the countries involved in IPEF, at least one of these countries is on the Special Watch List for religious freedom concerns by the State Department. 

How is your team raising religious freedom with countries that are part of IPEF? 

How is USTR advocating for religious freedom with countries holistically? 

Answer. The Ministerial Statement for IPEF Pillar 1 (Trade) establishes that the 

partners will pursue provisions and initiatives that benefit workers and ensure free 

and fair trade that contributes to promoting sustainable and inclusive growth for 

IPEF countries and the Indo-Pacific region. For the United States, inclusive trade 

discussions comprise advancing the benefits of the IPEF for underserved communities, including religious and ethnic minorities. 

Consistent with the President’s trade agenda and USTR’s strategic plan, USTR 

strives to ‘‘develop equitable trade policy through inclusive processes.’’ This entails 

identifying and striving to address barriers in order to achieve the consistent and 

systematic fair, just, and impartial treatment of all individuals, including those who 

belong to underserved communities. For the United States, ‘‘underserved communities’’ includes religious and ethnic minorities. In addition, USTR’s expanded engagement includes building relationships and listening to the concerns of faithbased, community-based organizations. 

USTR also continues to monitor and fully enforce laws prohibiting the importation 

of goods made by forced labor and remains committed to fighting against the economic exploitation and human rights abuses committed against Uyghurs and other 

ethnic and religious minorities in the People’s Republic of China (PRC). 

QUESTIONS SUBMITTED BY HON. STEVE DAINES

PROTECTING U.S. IP

Question. In May of 2021, I joined my colleagues in expressing our concern to you 

over the TRIPS waiver for COVID–19 vaccines. This waiver—which you supported— 

gave China, Russia, Iran, and other countries access to highly advanced U.S. IP 

without the consent of U.S. companies. 

Your support of this waiver gives me serious concerns about your regard for the 

long-term health of our Nation’s innovations across industries, particularly in biopharmaceutical innovations, and your dedication to protecting sensitive U.S. IP as 

you consider expanding the TRIPS waiver to include additional products. 

What specific industries and products are you considering including in a proposed 

expansion? 
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What data are you collecting to inform this decision? 

What specific analyses are you conducting to ensure that any expansion of this 

waiver would not threaten our country’s economy, our biopharmaceutical innovation, 

and our national security? 

What steps are you taking to protect American IP, whether from pharmaceuticals 

and defense, to small innovators and universities, from being stolen and abused by 

foreign adversaries? 

Answer. Under the June 2022 ministerial decision on the TRIPS Agreement, developed countries, a group that includes Russia, and countries with existing capacity 

to manufacture COVID–19 vaccines who have opted out from the decision, including 

China, are not eligible to benefit from this decision. The ministerial decision also 

does not apply to Iran, as Iran is not a member of the World Trade Organization 

(WTO). 

The ministerial decision, included a commitment to decide by December 17, 2022, 

whether or not to extend the decision to the production and supply of COVID–19 

diagnostics and therapeutics. The WTO General Council later extended this deadline at its December 2022 meeting. 

Over the course of the 5 months after the ministerial decision, USTR officials held 

robust and constructive conversations with Congress, government experts, a wide 

range of stakeholders, multilateral institutions, and WTO members. USTR published a summary of the diverse views heard during the 5-month consultation period 

on December 6, 2022. In addition, on December 16, 2022, I asked the U.S. International Trade Commission (USITC) to conduct an investigation and prepare a report of available data and information regarding access to COVID–19 diagnostics 

and therapeutics. 

My request to the USITC specifically asks that they solicit information on issues 

such as the relationship between intellectual property protection and corporate research and development expenditures, as well as the location of jobs associated with 

the manufacturing of diagnostics and therapeutics. 

With respect to advancing the interests of America’s innovators and creators, 

among other things, USTR issues a Special 301 report each year. This report provides an opportunity to put a spotlight on foreign countries and the laws, policies, 

and practices that fail to provide adequate and effective IP protection and enforcement for U.S. inventors, creators, brands, manufacturers, and service providers, 

which, in turn, harm American workers whose livelihoods are tied to America’s 

innovation- and creativity-driven sectors. 

INDIA

Question. What is USTR doing through the U.S.-India Trade Policy Forum or otherwise to address longstanding agricultural market access issues with India, including pulse crops? 

Answer. Addressing barriers to agricultural trade continues to be a priority for 

U.S. engagement with India. Through the U.S.-India Trade Policy Forum’s Working 

Group on Agricultural Goods we are seeking to address a broad range of trade barriers in order to expand access to the Indian market for U.S. agricultural products, 

including pulse crops. The United States also continues to raise pulse crop access 

issues alongside other trading partners at the WTO. 

QUESTIONS SUBMITTED BY HON. TODD YOUNG

Question. The Government of Mexico’s action to ban genetically modified corn and 

other biotech products is concerning for a host of reasons. The U.S. exported 15 million metric tons of corn to Mexico last year, and nearly all of it was genetically 

modified. This has implications not only for row crop farmers, but for livestock producers who depend on a grain supply to feed their animals, and then rely on stable 

market access. Jeopardizing access to the Mexican market will have rippling and 

detrimental effects on agriculture in Indiana, particularly in the corn and hog sectors. 

With the announcement of formal technical consultations with Mexico to address 

this action, how will you ensure that American farmers can depend on access to the 

Mexican market? 
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How will you convey what is at stake with ignoring the science around biotechnology? 

Have you considered how other countries will look at Mexico’s lack of sciencebased decision-making and decide to follow suit? 

Answer. On June 2nd, I requested dispute settlement consultations with Mexico 

under the United States-Mexico-Canada Agreement (USMCA). We continue to press 

for a science-based approach for all biotech products and transparent and predictable market access in Mexico. Products of agricultural biotechnology, including corn, 

have been safely used for human consumption and animal feed around the world, 

including in Mexico, for decades. We urge all our trading partners to follow a 

science-based approach to biotech products, which help farmers respond to pressing 

climate and food security challenges. 

Question. Related to supporting agricultural biotechnology, I am concerned with 

South Korea’s regulations. Korea is the U.S.’s fifth largest agricultural export market, last year importing over $10.2 billion worth of American corn, rice, wheat, soybeans, beef, dairy, pork, and other food and feed products. Korea has a history of 

an inefficient risk assessment system for biotechnology, and is extremely unpredictable. Because of this, South Korea is positioning to be the preeminent global threat 

to the introduction of new biotechnology traits and the adoption of new agricultural 

technologies. 

Under the U.S.-Korea Free Trade Agreement, how are you compelling South 

Korea to reform its current biotech risk assessment process, and to put in place a 

rational regulatory framework for gene-edited products? 

Answer. USTR has been engaging with Korea on biotechnology for several years 

through various channels, including the KORUS Committee on Sanitary and Phytosanitary Measures. USTR has consistently raised concerns over Korea’s burdensome 

biotechnology approval process and urged Korea to adopt a more science-based, riskproportionate approach to genome editing. USTR will continue to engage with Korea 

to enhance transparency, predictability, reliability, and efficiency, and to ensure its 

regulatory approval process is science- and risk-based. 

Question. I continue to hear concerns from my constituents regarding China’s incessant circumvention, and all the tactics they use to mask the true origin of inputs 

and products so they can continue transnational subsidies. Luckily, the United 

States has an AD–CVD process to crack down on circumvention and help domestic 

enterprises compete with unfairly subsidized products. Unfortunately, our current 

process has limits and circumvention still occurs. I am currently working with Senator Brown on legislation to provide more tools to the Commerce Department so 

that we can more efficiently stop bad actors before their products are released into 

U.S. commerce. 

Do you agree that our current AD–CVD process has limits? What tools would enable agencies to better assist with exposing and limiting circumvention? 

Answer. USTR acknowledges that both circumvention and duty evasion schemes 

deployed by producers and exporters subject to U.S. AD–CVD measures are challenging to address in the U.S. system. Both the U.S. Department of Commerce and 

U.S. Customs and Border Protection have taken vital steps to enhance their efforts 

to combat these schemes, and USTR has also been supportive of those agencies efforts and using its negotiating authority to ensure that they have the necessary resources to address these issues. For example, in USMCA, the United States was 

successful in negotiating first-in-kind provisions regarding duty evasion cooperation, 

which allow U.S. Customs and Border Protection to conduct duty evasion verification visits in Canada and Mexico. USTR is actively involved in expanding this capability with other trading partners and looks forward to announcing future endeavors once negotiations are completed. 

Question. The proposed waiver of TRIPS protections for American-made COVID– 

19 treatments and diagnostics will hand valuable U.S. technologies and IP to China 

and other foreign adversaries. China claimed that it will not avail itself of the 

TRIPS waiver for COVID–19 vaccines, and you have unfortunately trusted this 

claim. Regardless, China has made no such promise with respect to the proposed 

waiver for treatments and diagnostics. 

How will you ensure that the administration will reject any expansion of the 

TRIPS waiver that includes China or other major foreign competitors as a beneficiary? 
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Further, how can you guarantee that waiving TRIPS protections for COVID–19 

therapeutics and diagnostics would never result in any indirect transfer of U.S. intellectual property (IP) to Chinese- or Russian-owned entities in developing countries, thus opening a backdoor for China and Russia to access American IP? 

Answer. I appreciate your concern and will continue to consult with Congress on 

this issue. Under the June 2022 ministerial decision on the TRIPS Agreement, developed countries, a group that includes Russia, and countries with existing capacity 

to manufacture COVID–19 vaccines who have opted out from the Decision, including 

China, are not eligible to benefit from this Decision. In the discussions at the WTO, 

I will continue to be clear-eyed about potential risks. 

Question. I welcome your work on the Indo-Pacific Economic Framework but remain concerned that the end product will have very limited benefits for the United 

States if market access is excluded. Our exporters will continue to fall further behind their competitors from the many countries still actively negotiating tariff reduction agreements in the region, and the ambition level of IPEF’s non-tariff provisions may suffer if market access is excluded. 

Do you contemplate IPEF leading to market access negotiations? If so, why not 

have those negotiations now? 

Answer. At this time, the administration is not seeking to address tariff liberalization. However, in the trade pillar, we are working to include a mix of high-standard 

commitments and principles to address many longstanding non-tariff barriers that 

can, in practice, affect market access for U.S. enterprises, including MSMEs, seeking to operate abroad. We intend for the trade pillar to include clear and strong regional rules and standards that reflect our common interests and values and that 

promote our competitiveness and inclusive prosperity. 

Question. The issue of critical mineral supply is becoming increasingly more important as countries around the globe are putting in place strategies and policies 

to maximize their production or procurement. While the United States has a welldeveloped framework focusing on the security of critical minerals and rare earth elements, more needs to be done to lower China’s hold on the entire value chain. 

How are you working with other Federal agencies, such as the Department of Energy, Department of Defense, and Department of the Interior, to develop a coordinated strategy to address critical mineral supply chain vulnerabilities? 

Answer. We coordinated with other agencies, including the agencies identified 

above, when negotiating the recently concluded Japan Critical Minerals Agreement, 

and have also sought their input in the negotiations with the EU announced by the 

White House on March 10, 2023. 

We will continue to liaise with other agencies in any critical minerals-related efforts that may implicate U.S. trade policy or engagement with our trading partners. 

Question. While I welcome your recent work and coordination with Japan to sign 

a critical minerals agreement on March 28th, I want to stress the importance of expanding our reach. 

How are you collaborating with allies and trading partners to establish a more 

secure and sustainable global supply chain for critical minerals? Are there other ongoing efforts to establish or participate in multilateral forums or initiatives aimed 

at addressing critical mineral supply chain challenges? 

Answer. We are mindful of the importance of diversifying our global critical minerals supply chains, given China’s present dominance. The Japan Critical Minerals 

Agreement is an important step, and is meant to complement other bilateral and 

plurilateral efforts. For instance, both Japan and the United States are members 

of the Minerals Security Partnership, an initiative launched in 2022 that aims to 

strengthen critical minerals supply chains. Additionally, as the White House announced on March 10, 2023, we are now engaged in negotiations with the EU regarding a critical minerals agreement. 

QUESTIONS SUBMITTED BY HON. JOHN BARRASSO

Question. The administration is currently engaged in a number of trade initiatives: the Indo-Pacific Economic Framework; the Americas Partnership for Economic 

Prosperity; the U.S.-Taiwan Initiative on 21st-Century Trade; the U.S.-Kenya Stra-
77 

tegic Trade and Investment Partnership; expansion of the World Trade Organization TRIPS Waiver; and the Critical Minerals Agreements with Japan and the EU. 

Article I, section 8 of the Constitution gives Congress clear authority over international trade. Despite Congress’s clear constitutional authority over trade matters, 

the administration does not intend to seek congressional approval for any of these 

initiatives. 

Can you confirm that none of these initiatives will come before Congress for approval? 

Why doesn’t Congress’s constitutional authority over international trade apply to 

any of these initiatives? 

And do you believe partisan executive agreements are more durable and meaningful than bipartisan initiatives approved by Congress? 

Answer. USTR does not anticipate concluding our negotiation in any of these initiatives in a way that would require Congress to change U.S. law. As such, USTR 

plans on following its longstanding practice of relying on its authority granted by 

Congress in 19 U.S.C. 2171 to negotiate and enter into agreements with these foreign partners on behalf of the United States as USTR has done on numerous occasions across administrations for at least the last 30 years. 

Congress is USTR’s constitutional partner on trade, and I am committed to working with Congress on all of these initiatives. In this regard, USTR has embarked 

on an unprecedented level of transparency and consultation with Congress with regard to all of these initiatives. In particular, USTR has consistently engaged—on 

a bipartisan basis—with Congress throughout the development of all these initiatives with members, their staff, and the staff of our congressional committees of jurisdiction. USTR has further consulted with our congressional committees of jurisdiction on all draft U.S. negotiating text proposals prior to sharing them with stakeholders outside the U.S. Government and with foreign partners. USTR has continued to consult with Congress during the course of negotiations so Congress is engaged as USTR negotiates with partners. 

In conjunction with working with Congress on these initiatives, USTR has regularly engaged with the public, including by: seeking public comment from Federal 

Register notices; publishing ministerial statements and public summaries of proposed U.S. texts; and holding public stakeholder engagement sessions during negotiating rounds. We will continue outreach to the public, encouraging, in particular, 

the participation of stakeholders who have not traditionally had a voice in trade and 

economic policy. 

We seek such extensive input from Congress, stakeholders, and the general public 

not just because it is an important thing to do but because these agreements will 

be durable and meaningful only if they are the product of broad-based input. 

Question. The President’s 2023 trade agenda is full of dialogues, frameworks, and 

lofty aspirational goals. But there’s no mention of seeking new free trade agreements (FTAs) with our allies despite their clear benefits to U.S. farmers, ranchers, 

manufacturers and consumers. Instead of exporting American beef, energy, agriculture products or technology. 

The administration continues to be hyper-focused on exporting labor, social, and 

environmental policies via frameworks and dialogues. Just like last year, a very notable omission from the trade agenda is market access reform. Members on both 

sides of the aisle have raised concerns about market access reform, but those concerns have been routinely ignored. 

Why does the administration refuse to seek market access reform? 

And are members of Congress wrong in calling on the President to do so? 

Answer. USTR has produced agreements that increase market access for American manufacturers, farmers, and ranchers and continues to work on new initiatives 

that will support American businesses access markets. 

For agricultural producers, USTR has secured real wins over the past few years, 

and U.S. agricultural exports reached a record $202 billion in 2022. Recent tangible 

market access outcomes for agriculture include bringing into force an agreement 

with Japan to export more U.S. beef, signing a tariff-rate quota agreement with the 

EU to open markets for rice, wheat, corn shellfish, and beef and opening access for 

pork and pecan exports to India. 
78 

In addition, USTR reached agreement in 2021 with the European Union (EU) related to the section 232 steel and aluminum tariffs which resulted in the EU suspending tariffs on U.S. products. USTR also reached agreement with the EU and 

the United Kingdom on the 17-year-old large civil aircraft dispute, which protected 

American jobs and addressed distortive practices non-market practices that undermine the aviation sector. 

USTR has launched the Indo-Pacific Economic Framework, the U.S.-Taiwan Initiative on 21st-Century Trade, and the U.S.-Kenya Strategic Trade and Investment 

Partnership, among other initiatives. Tariff liberalization is not currently being considered as part of these initiatives but these new engagements present opportunities 

to enhance trade and investment. In addition, USTR is negotiating to include provisions in these agreements to combat non-tariff and regulatory barriers that limit access to markets. To address specific barriers of concern and produce tangible benefits for U.S. agricultural producers, USTR will seek to promote the use of scienceand risk-based decision making to maintain and expand market access for U.S. agricultural exports. 

Moving forward, USTR will continue expanding market access for American manufacturers, farmers, and ranchers. 

Question. Russia’s illegal, unprovoked invasion of Ukraine showed the world how 

energy can be wielded as a geopolitical weapon. Countries around the globe continue 

to scramble to find new energy supplies to replace Russian oil, coal, natural gas, 

and nuclear fuel. President Biden’s 2023 Trade Agenda once again fails to outline 

a strategy to help our allies be more energy secure. 

America is a global energy superpower. We should act like it, especially through 

trade. Wyoming has an abundance of coal, oil, natural gas, and uranium. The U.S. 

can provide our allies around the world with reliable, affordable, and secure energy 

resources. I see no plan or urgency to do this in the President’s Trade Agenda. This 

is a mistake. 

How can we leverage American energy in international trade to counter our adversaries like Russia who use their own energy exports as a weapon? 

Answer. USTR shares your concern about the effects of Russia’s illegal, unprovoked invasion of Ukraine on our energy security and the energy security of our allies. We actively support the growth of the U.S. energy industry and the export of 

U.S. energy products, technologies, and services all over the world to help our trading partners meet their energy security, energy access, and climate goals. Coordinated policy actions, strategies and response mechanisms can effectively help in ensuring and promoting diversified, risk-free, resilient, and secure supply of energy 

sources and critical raw materials. Universal energy access, accelerating adoption 

of innovative and zero-emission energy technologies, promoting domestic and overseas investments, and enhancing transnational grid connectivity and mitigating 

market volatility are key to reducing market volatility, improving energy security, 

and leveraging American energy to counter our adversaries. 

Question. Thank you for initiating consultations with Mexico on energy issues affecting American companies. As you know, Mexico started discriminating against 

American private energy investment in Mexico almost as soon as the U.S.-MexicoCanada Agreement (USMCA) was enacted. Mexico’s actions deliberately disadvantage American energy investments and jobs. To me, these are clear, flagrant violations of USMCA. It is my understanding that the U.S. was able to request a dispute 

resolution panel in October but that has not happened. At this point, it seems clear 

to me that Mexico has no intention of changing their behavior and I believe the time 

to request a formal dispute resolution panel is overdue. 

Why haven’t you requested a dispute resolution panel with respect to Mexico’s actions against American energy? 

And is this a step you intend to take in the near future? 

Answer. I share your concerns that certain of Mexico’s energy measures undermine U.S. companies and U.S.-produced energy in favor of Mexico’s state-owned 

electrical utility and state-owned oil and gas company. That is why in July 2022 

I requested USMCA chapter 31 consultations with Mexico regarding those measures. We are engaging with Mexico on specific and concrete steps Mexico must take 

to address the concerns set out in our consultations request. It remains our goal to 

seek a solution with Mexico that addresses our serious concerns. However, should 

Mexico prove unable or unwilling to address our concerns through these consultations, the United States can make use of enforcement options under the USMCA. 
79 

Question. I have long been skeptical of the effectiveness of the section 301 tariffs 

on over $300 billion in Chinese goods. American families and businesses are all 

struggling with inflation and the high cost of goods and services. While I understand 

the need to crack down on unfair Chinese trade practices, I believe these tariffs are 

simply making a bad situation worse for all Americans. I don’t see where these tariffs have significantly altered Chinese behavior. 

When will USTR’s statutory review of the section 301 tariffs be complete? 

Answer. As part of the 4-year review, USTR requested public views on the effectiveness of the actions in achieving the objectives of the investigation into China’s 

acts, policies and practices related to technology transfer, intellectual property, and 

innovation; other actions that could be taken; and the effects of the actions on the 

United States economy, including U.S. consumers. USTR expects to complete the 4- 

year review in the fall of this year. 

Question. Why hasn’t USTR reopened an exclusion process for these tariffs? 

Answer. Within the 4-year review, USTR is reviewing the overall structure of the 

tariffs, including which products should be subject to additional duties. As part of 

the public comment process, submitters were requested to submit comments on 

whether certain tariff headings should remain covered by the actions or removed. 

USTR continues to consider additional exclusion processes, as warranted. 

Question. The U.S. imports more beef from Brazil than any other country according to the U.S. Department of Agriculture. In January 2023, U.S. beef imports from 

Brazil are already up 4.83 percent from 2022. On February 22, 2023, there was a 

confirmed case of atypical bovine spongiform encephalopathy (BSE) in the northern 

state of Para, Brazil. BSE in the U.S. is still heavily regulated to assure consumers 

and our international trade partners that U.S. beef is safe. The test samples were 

submitted to the World Organization for Animal Health (WOAH) but the World Organization for Animal Health report indicates that the event started on January 18, 

2023. That is a difference of 35 days where BSE was not confirmed in Brazil. Brazil 

has a history of delayed reporting of atypical BSE cases, with two other instances 

in 2021. This delay in reporting of BSE cases raises serious concerns over the credibility of Brazil’s food safety and animal health systems. Especially with an increase 

of Brazilian beef imports into the U.S. in the last year. The impacts that these concerns can have on U.S. cattle herds and public health are severe. 

Has the United States addressed this issue with the government of Brazil? 

How is the administration holding Brazil accountable for its failure to comply 

with World Organization for Animal Health standards? 

How is Brazil’s Government working with the U.S. on beef products imported into 

the U.S. since their case of atypical BSE on February 22, 2023? 

Answer. It is critical that beef imported from Brazil meets U.S. requirements. We 

will continue working with the U.S. Department of Agriculture (USDA) Animal 

Plant Health Inspection Service (APHIS) and the Food Safety Inspection Service 

(FSIS) to ensure that Brazil follows relevant international standards and guidelines 

and that the beef it exports to the United States complies with U.S. animal health 

and food safety requirements. 

Question. With the rising costs of health care and the continued need to secure 

our medical supply chain, U.S. policies should not contribute to making these two 

ideals harder to achieve. Under your leadership, USTR has extended 301 exclusions 

for certain medical devices and components related to the COVID–19 pandemic. 

Is USTR doing anything to ensure medical devices and medical device components 

unrelated to COVID–19 are granted exclusions from these tariffs? 

Answer. The China section 301 tariffs are currently undergoing a 4-year statutory 

review. As part of this review, USTR requested public views on the effectiveness of 

the actions in achieving the objectives of the investigation into China’s acts, policies, 

and practices related to technology transfer, intellectual property, and innovation; 

other actions that could be taken; and the effects of the actions on the United States 

economy, including U.S. consumers. Within the 4-year review, USTR is reviewing 

the overall structure of the tariffs, including which products should be subject to additional duties. To that end, through the public comment process, submitters were 

requested to submit comments on whether certain tariff headings should remain 

covered by the actions or removed. Additionally, USTR continues to consider additional exclusion processes, as warranted. 
80 

QUESTIONS SUBMITTED BY HON. MARSHA BLACKBURN

Question. In May 2022, the USTR began its statutory 4-year review of the section 

301 actions taken against China. As part of this review, the USTR solicited responses from the domestic industry as to whether the tariffs should be continued. 

A portal was also opened to allow other interested parties to submit comments regarding the effectiveness of the tariffs, the effect on the economy and consumers, 

and other potential actions that could be taken. 

Will you provide a detailed timeline on when you expect this review to be completed? 

Answer. USTR expects to complete the 4-year review in the fall of this year. 

Question. Companies granted another exclusion in March 2022 could only receive 

tariffs reimbursements back to October 12, 2021, even though the tariffs had been 

reimposed on January 1, 2021. 

Do you, or this administration, have any thoughts on including retroactivity provisions in future rounds of exclusions? 

Answer. As part of the 4-year review, we are considering the effectiveness of the 

tariffs and their current structure. We are also looking at the impacts of the tariffs 

on consumers, U.S. workers, and the economy, among others. If appropriate, we will 

consider whether an additional exclusions process may be warranted, and what that 

process might look like based on the findings during the review on impacts to consumers, workers, and U.S. industries. 

Question. Does Customs and Border Protection have the administrative authority 

to suspend liquidations and provide full retroactively for 301 tariffs? 

Answer. For this question, I would have to refer to CBP and to the Department 

of Justice. The question is subject to litigation regarding the section 301 tariffs. 

Question. Can you provide a timeline on when USTR plans to implement the 

USMCA Dispute Settlement Panel’s unanimous decision on Automotive ROO/RVC 

Calculations? 

Answer. We are actively engaging with Mexico and Canada regarding the panel’s 

decision in the USMCA Autos ROOs dispute. Among other issues, we are discussing 

ways to gain insight into the impact that implementation of the panel’s decision 

would have on investment and jobs in North America. Our discussions with Mexico 

and Canada on these issues will progress. 

Question. In 2018, Meco, a charcoal grill manufacturer located in Greenville, TN, 

submitted a comment to the USTR to levy a 25-percent duty on charcoal grills in 

response to the announcement of the 301 tariffs. In response, duties were levied on 

two components Meco purchased to produce the Americana Walk-A-Bout grill. However, duties were not levied on finished charcoal grills being imported from China. 

A 25-percent duty was put on gas grills and electric grills. In 2022, during the 

USTR’s 4-year statutory review of the section 301 tariffs, Meco again submitted a 

comment asking for a 25-percent duty to be levied on imported charcoal grills. Furthermore, Meco has been subject to intellectual property theft since 1999 and has 

filed multiple suits against intellectual property right thefts. To make matters 

worse, they have provided evidence of their grills being shown in showrooms in 

China and online retailers such as Alibaba. 

How are you addressing this situation as you continue your 4-year review? 

Answer. China has a well-established track record of conducting unfair trade 

practices to acquire U.S. technologies and intellectual properties. The 4-year review 

will include an examination of the effectiveness of the actions in achieving the objectives of the investigation into China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. USTR will also consider other 

actions that could be taken to achieve the objectives of the investigation. Additionally, USTR is reviewing the overall structure of the tariffs, including which products 

should be subject to additional duties. To that end, as part of the public comment 

process, submitters were requested to submit comments on whether certain tariff 

headings should remain covered by the actions, removed, or added. 

Question. How are you dealing with intellectual property theft from Chinese companies, and what are your plans to curb this ongoing abuse? 

Answer. We continue to press China to address a range of intellectual property 

(IP) enforcement concerns, including forced or pressured technology transfer and 
81 

trade secret theft. China remains on the Special 301 Priority Watch List in 2023 

and is subject to continuing monitoring pursuant to section 306 of the Trade Act 

of 1974, as amended (19 U.S.C. § 2416). Under section 301 of the Trade Act of 1974, 

as amended (19 U.S.C. § 2411), we have been taking action to address a range of 

unfair and harmful Chinese acts, policies, and practices related to technology transfer, IP, and innovation. We intend to use the full range of tools we have and develop 

new tools as needed to defend American economic interests from harmful policies 

and practices. 

Question. Do you commit to reviewing Meco’s comments thoroughly and providing 

them with complete and detailed answers to their questions? 

Answer. All comments submitted as part of the public comment process will be 

reviewed and given full consideration. 

PREPARED STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM OREGON

This morning the Finance Committee is joined by Ambassador Tai to discuss the 

trade agenda for the year ahead. 

The Biden administration, from the get-go, had a difficult job to do with respect 

to trade. The Trump administration’s chaotic approach turned some of our trade rivals into outright adversaries, and many of our friends into rivals. Now the United 

States needs to kick into a higher gear with smarter, more innovative approaches 

to trade, which will deliver real results for American workers, farmers, and businesses. 

There are big issues to address. For example, China continues to put up barriers 

to American products and American values, while ripping off jobs using forced labor 

and undermining free speech. Its discriminatory model is spreading. Even our allies 

in the European Union and Canada are drafting laws intended to limit our digital 

companies’ ability to do business in their jurisdictions while shielding their own 

companies. 

Today, I’m outlining a three-part strategy to get more Americans back in the winner’s circle. First, the administration needs to ramp up enforcement of the trade 

laws that are already on the books—across the board. 

Let’s start with USMCA. Senator Brown and I fought for stronger, faster-acting 

enforcement tools like the rapid response mechanism. That’s part of what makes 

USMCA the most pro-labor trade agreement in U.S. history. Ambassador Tai has 

used the Brown-Wyden mechanism to get some key wins to stop labor violations in 

Mexico. And she’s worked to help Pacific Northwest dairy farmers get into the Canadian market. 

Now Ambassador Tai needs to go further and enforce every provision of every 

chapter of USMCA. An example: Mexico is flouting its USMCA obligations by shutting out American renewable energy providers. It’s bad for the economy and the environment. During last year’s trade agenda hearing, I asked Ambassador Tai to take 

action. The U.S. did request consultations with Mexico in July 2022, but 8 months 

have passed. American clean energy producers are still waiting for access. In my 

view, it’s long past time to say enough is enough and escalate this into a real dispute settlement case. 

The administration also needs to step up enforcement beyond USMCA to defend 

American workers and businesses from unfair trade practices, wherever they are 

happening. To that end, the Biden administration has yet to bring a single case before the WTO. There’s no question that the WTO needs reform, but if the U.S. 

doesn’t press its case, we’re stuck on defense. I want this country playing offense 

on trade. 

Second, the administration needs to make opening export markets a priority. 

USMCA is proof that U.S. trade policy can raise the bar on labor and environmental 

standards—and bust down barriers to American exports at the same time. 

However, I have real concerns that USTR isn’t doing enough to break down barriers our exporters face. For example, there’s old red tape preventing eastern Oregon potato farmers from shipping fresh potatoes into Japan. That’s an estimated 

$150 million market. Pacific Northwest apples and pears are blocked from the behemoth Australian market. Oregon wheat—upwards of 90 percent of which is exported—suffers from high tariffs in markets around the Pacific Rim. Vietnam has 
82 

a litany of restrictive digital practices that hurt Oregon start-ups. The administration should be taking every opportunity to fix these issues—but it isn’t clear USTR 

is even discussing them as part of its Indo-Pacific Economic Framework. 

I’ll draw a line here: the U.S. cannot conclude agreements with Japan, Indonesia, 

or the EU that leave issues facing our exporters unaddressed. 

Third, getting trade done right will require creative approaches to new challenges. 

Whether it’s shoring up our supply chains, promoting access to critical minerals, or 

addressing climate impacts of leading industries, smart trade policies can be part 

of the solution. I’m glad Ambassador Tai and her team are thinking outside the box, 

but what’s needed are real answers on how her proposals will work in practice. 

The administration must deliver new markets—like the Middle East and Africa— 

and trade in new products—like renewable technology and digital services—in a 

way that quickly pushes the American economy forward. Meeting that challenge will 

require strategy with our allies and partnership with Congress. 

That brings me to my final point. The executive branch has begun to embrace a 

go-it-alone trade policy. Let me be clear: Congress’s role in U.S. trade policy is defined by the Constitution. It’s right there in article I, section 8. That is blackletter law, and it’s unacceptable to suggest otherwise. It’s my expectation that Ambassador Tai and this committee can begin to chart a new path forward when it 

comes to transparency, consultation, and ultimately, approval of trade agreements. 

I appreciate Senator Menendez’s leadership to get us there. 

I want to thank Ambassador Tai for joining the committee today, and I look forward to our discussion. 
(83) 

1https://www.state.gov/reports/2022-investment-climate-statements/canada/. 

2https://www.pbo-dpb.ca/en/publications/LEG-2122-007-S--digital-services-tax--taxe-servicesnumeriques. 

COMMUNICATIONS

ACT | THE APP ASSOCIATION ET AL. 

March 20, 2023 

The President 

The White House 

1600 Pennsylvania Ave., NW 

Washington, DC 20500 

Dear Mr. President: 

We write to you in advance of your upcoming visit to Ottawa to express our concerns about several measures that will undermine the ability of U.S. companies to 

fairly compete in the Canadian market. We urge you to raise these issues during 

your visit, with a view toward ensuring that Canada fully honors its international 

commitments. 

The undersigned organizations strongly support the U.S.-Canada economic relationship. The United States, through many of our member companies, is Canada’s 

largest investor, accounting for 44 percent of total FDI ($420 billion as of 2020).1

Furthermore, Canada has long been a strong U.S. partner and ally, like-minded in 

its approach to evidence-based regulation and market-economy principles. 

The United States-Mexico-Canada Agreement (USMCA) was a signature bipartisan effort, and your Administration has rightly called USMCA enforcement a top 

priority. This is particularly true with respect to modernized enforcement mechanisms and a robust digital trade chapter. We strongly believe that the USMCA can 

raise standards in many areas—agricultural market access, digital trade, environmental standards, labor rights, and services access. 

However, we are concerned that Canada is pursuing a number of problematic proposals and actions that could significantly limit the ability of U.S. companies to export their goods and services and fairly compete in the Canadian market. It is critical for the United States to hold Canada accountable to its USMCA commitments 

to ensure the continued success of this important agreement. Relatedly, Canada’s 

proposed policy approaches would impede ongoing efforts to drive North American 

economic competitiveness, including the North American Leaders’ Summit and the 

Americas Partnership for Economic Prosperity (APEP). 

Digital Services 

Canada is a key market for U.S. digital services exports, as it generated $45.8 

billion in 2020—which represented 86.7% of U.S. services exports to Canada that 

year. 

Unfortunately, Canadian policymakers continue to threaten the introduction of a 

discriminatory and retroactive digital services tax (DST) targeted at U.S. companies, 

despite its endorsement of the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework, where 138 countries have agreed not to 

enact unilateral DSTs while negotiations on international taxation of digital services 

are ongoing (the ‘‘standstill’’). If passed, this DST is estimated to collect upwards 

of $4 billion over five years, primarily from U.S. companies.2 Canada’s pursuit of 
84 

3https://www.pbo-dpb.ca/en/publications/RP-2223-017-M--cost-estimate-bill-c-18-onlinenews-act--estimation-couts-lies-projet-loi-c-18-loi-nouvelles-ligne. 

a DST would set a harmful precedent for other Inclusive Framework participants 

to adopt similarly targeted taxes on U.S. digital services. 

In addition to the DST, Canada has advanced other domestic initiatives that target U.S. technology companies and raise concerns under the USMCA, such as the 

Online Streaming Act (C–11), which seeks to compel U.S. streaming services and 

social media platforms to fund and/or promote Canadian content on their platforms 

via extraterritorial regulatory agency actions. Consequently, U.S. content creators— 

regardless of whether the content creator is an established publisher or an individual content creator—will be disadvantaged on platforms. Depending on the regulatory requirements for funding and technical requirements for promoting Canadian 

content, the cost of doing business in Canada will increase for U.S. online streaming 

services and social media platforms. This cost will ultimately trickle down to Canadian consumers, who will also experience less choice and personalization on the 

platforms. 

Furthermore, by expanding regulatory schemes designed for the traditionally restricted world of broadcasting to the inherently open nature of the Internet, C–11 

could have disastrous consequences for content production and distribution and 

could inspire other countries to implement similar content-preference schemes. This 

would have negative consequences for Canadian creators themselves who are prime 

beneficiaries of the investment and global distribution platform offered by U.S. suppliers. For these reasons, we are especially concerned with the Canadian government’s insistence on including user-generated content within the scope of C–11. 

Another bill, the Online News Act (C–18), likely would require a narrow range 

of U.S. digital companies to pay Canadian news organizations and broadcasters for 

the right to display news stories, headlines, snippets, and links. Canada’s Parliamentary Budget Office estimates that in-scope companies would need to pay over 

$320 million annually to Canadian firms under this legislation, primarily to broadcasters.3 There has been no indication that any Canadian, Chinese, or other nonU.S. digital companies will be subject to this measure. Therefore, this policy raises 

significant national treatment and performance requirement concerns under the 

USMCA. 

Given the momentum behind each of these three proposed pieces of legislation, 

which could pass this year, urgent action is needed to review and mitigate any potential discriminatory effects on U.S. technology companies. As bipartisan members 

of Congress have argued, the U.S. government should ensure that the USMCA is 

enforced to avoid these negative outcomes for North American strategic interests. 

Customs and Trade Facilitation 

The Canadian Border Services Agency (CBSA) is pursuing several concerning 

changes to customs procedures and practices that may conflict with Canada’s customs and trade facilitation obligations in the USMCA and the World Trade Organization’s Trade Facilitation Agreement. 

The CBSA Assessment and Revenue Management project, better known as 

CARM, is a multi-year initiative to change the Canadian importation process. While 

ostensibly implemented to streamline the border process, several aspects of the new 

CARM system require more complicated processes and increase the customs formalities required for informal entries. Canada is pursuing an aggressive implementation 

time frame (Oct. 2023) that could increase complexity at the border, with policies 

for low-value shipment clearance still largely undefined. The United States should 

encourage CBSA to extend the rollout and continue working with various stakeholders, especially U.S. small and medium-sized (SME) traders, with an eye toward 

truly simplifying customs procedures. 

Last year’s budget implementation bill (Bill C-19) made changes to Canada’s Customs Act that will, among other things, require express carriers to take on new obligations and potential liabilities when delivering goods into Canada. These changes 

will have significant impacts, particularly for SME traders such as those who infrequently import small numbers of e-commerce shipments into Canada. For example, 

carriers in those instances could be liable for any additional taxes, duties, penalties, 

and other costs for up to four years after importation and would have to seek reimbursement from the shipper. As a result, shifting such significant financial and legal 

risk to carriers is likely to raise costs and cause unintended consequences for SMEs 

that rely heavily on these services. Taken together, in their current form these 
85 

changes could further disrupt supply chains and increase costs for traders of all 

sizes on both sides of the border. 

USMCA Implementation 

We join with Senate Finance Committee Chairman Wyden and Ranking Member 

Crapo in commending USTR for its continued effort under the USMCA dispute settlement system to open Canada’s dairy market to U.S. producers. The United 

States, Canada, and Mexico should work together to achieve full and timely compliance on other the full range of implementation issues so that the full potential of 

USMCA can be achieved. We encourage the Administration to continue to consult 

with industry and other stakeholders to identify implementation issues, develop an 

enforcement plan, and assess progress in addressing measures. 

Regulatory Cooperation 

Discussions with Canada should focus on enhancing regulatory compatibility, especially in how Parties are implementing related USMCA provisions. Such discussions should focus on risk-based approaches to the assessment of regulations, including assessment and risk management methodologies, tools, and models, and on 

the development of specific risk assessments. Stronger cooperation in this area 

would make an outsized impact relative to national approaches and would support 

further trade and investment in the North American economy. For example, last 

year Canada proposed new regulations on a type of flame-retardant (DBDPE) commonly used in a wide range of products including vehicles, aircraft, information and 

communications technology (ICT) equipment, and appliances. The restrictiveness of 

Canada’s regulatory approach is not supported by the available science and would 

significantly disrupt U.S.-Canadian trade and impair supply chain resiliency in several critical sectors. In addition, further regulatory cooperation between the U.S. 

and Canada is necessary to ensure full implementation of USMCA provisions on 

combating marine litter, including plastics and microplastics. The principles of the 

risk-based approach need to be the prism through which both countries approach 

the international negotiations relating to plastic waste. 

Conclusion 

Timely engagement from U.S. political leadership is also particularly critical as 

Canada seeks to join the U.S.-led Indo-Pacific Economic Framework for Prosperity, 

and as work advances on APEP. Industry appreciates the work of the Administration to pursue high-standard agreements and reinvigorate multilateral initiatives to 

deliver the benefits of free and fair trade to workers and believes Canada could play 

a positive role in this initiative. Addressing these measures now will ensure that 

the United States and Canada can work together to model desired policy approaches 

in IPEF, APEP, and other multilateral efforts. 

It is critical for the United States Government to hold Canada to its trade commitments and to underscore the negative global precedent that would be set if Canada implements these measures in their current form. 

Sincerely, 

ACT | The App Association 

American Chemistry Council (ACC) 

Coalition of Services Industries (CSI) 

Computer and Communications Industry Association (CCIA) 

Express Association of America (EAA) 

Information Technology Industry Council (ITI) 

National Foreign Trade Council (NFTC) 

Software and Information Industry Association (SIIA) 

TechNet 

United States Chamber of Commerce 
86 

AMERICAN COATINGS ASSOCIATION, INC. 901 New York Avenue, NW, Suite 300 

Washington, DC 20001 

T 202–462–6272 

F 202–462–8549 

https://www.paint.org/ 

March 27, 2023 

The Honorable Ron Wyden 

Chair 

U.S. Senate 

Committee on Finance 

219 Dirksen Senate Office Building 

Washington, DC 20510 

The Honorable Mike Crapo 

Ranking Member 

U.S. Senate 

Committee on Finance 

219 Dirksen Senate Office Building 

Washington, DC 20510 

Re: Hearing on the Biden Administration’s 2023 Trade Policy Agenda with United 

States Trade Representative Ambassador Tai on March 23, 2023 from American 

Coatings Association, Inc. (Heidi K. McAuliffe, Vice President of Government Affairs) 

Dear Chairman Wyden and Ranking Member Crapo: 

As you evaluate testimony from U.S. Trade Representative, Ambassador Katherine 

Tai on the Administration’s 2023 Trade Policy agenda, the American Coatings Association (ACA) and the more than 315,000 employees in the paint and coatings industry, would like to highlight the importance of the ‘‘Miscellaneous Tariff Bill’’ (MTB) 

package. The MTB process has been stalled too long, and ACA urges Congress to 

take legislative action on the MTB package. 

ACA is the premier trade association dedicated to advancing the interests of the 

coatings industry and represents paint and coatings manufacturers, suppliers, distributors, and technical professionals. Many of today’s paints and coatings may go 

unnoticed by the consumer, but they play immeasurably valuable roles in delivering 

high-quality foodstuffs, durable goods, housing, furniture and thousands of other 

products to market. 

As you know, the MTB will temporarily eliminate and reduce border taxes on a set 

of products that have been found through a transparent and rigorous process at the 

U.S. International Trade Commission (USITC) to not to be produced at all or in sufficient capacity in the United States. Many raw materials used in paint and coatings formulas are produced solely outside of the United States. Without passage of 

the MTB, American consumers will pay directly and/or indirectly hundreds of millions of dollars each year in government-imposed import taxes on products not made 

or available in the United States, including those needed by the paint industry. 

Based on analyses by the National Association of Manufacturers, the MTB would 

eliminate import tariffs of more than $1.5 billion over three years (with full retroactivity to January 2021), bolstering manufacturers and other businesses in the 

United States, especially small and medium-sized manufacturers. This tariff relief 

translates into U.S. economic growth, as shown by the USITC, which reported that 

tariff relief under the previous MTB boosted U.S. GDP annually by as much as $3.3 

billion and output annually by as much as $6.3 billion. 

Thank you in advance for your consideration of this request. Should you or your 

staff have any questions or require additional information, do not hesitate to contact 

me at hmcauliffe@paint.org. 

With kind regards, 

Heidi K. McAuliffe 

Vice President, Government Affairs 
87 

AMERICAN FARM BUREAU FEDERATION

600 Maryland Avenue, SW, Suite 1000W 

Washington, DC 20024 

p. 202–406–3600 

f. 202–406–3606 

https://www.fb.org/ 

The American Farm Bureau Federation, the nation’s largest general farm organization, submits this statement for the Senate Committee on Finance hearing on the 

President’s 2023 trade policy agenda. Trade is critically important to the current 

welfare and future prosperity of U.S. farmers and ranchers. America’s farmers and 

ranchers depend on growing and stable export markets for the success of their businesses. 

President’s Trade Agenda for 2023 

The Administration’s approach on trade includes pursuing the Indo-Pacific Economic Framework; reducing trade barriers with Taiwan and Kenya; supporting agriculture; reducing trade barriers; promoting sustainable environmental practices; focusing on supply chain improvements; and promoting stability. 

The Indo-Pacific Economic Framework (IPEF) was introduced as a part of the overall Indo-Pacific Strategy. It is a strong start to improve relationships and reach 

agreements with the region’s countries. It should also be used to reach science-based 

standards that will assist exports. The inclusion of sanitary and phytosanitary (SPS) 

standards will reduce barriers and expand opportunities for our agricultural exports. 

The IPEF can be significantly improved. It should include a strategy of expanding 

market access for agriculture by working to reduce tariff barriers. The Administration is also not proposing a reauthorization of Trade Promotion Authority nor a commitment to pursuing trade negotiations with binding and enforceable commitments. 

Farm Bureau supports trade agreements in the region as the most durable and effective means to improve market opportunities for farmers and ranchers. 

The U.S.-Taiwan Initiative on 21st Century Trade was launched in 2022. For agriculture, this effort needs to resolve standards barriers by Taiwan that restrict U.S. 

exports. In 2022, $4.2 billion in agricultural products were exported to Taiwan. 

Indo-Pacific Region Agricultural Trade 

Current agreements in the region show the importance of moving forward with additional efforts to improve opportunities for U.S. agricultural exports. 

U.S.-China 

The U.S.-China Phase 1 Agreement resulted in improved agricultural trade and 

progress in the removal of barriers that impact the competitiveness of U.S. products 

in this market. In the Phase 1 Agreement, China committed to increase purchases 

of U.S. agricultural products. 

While the purchase commitment has ended, the outlook for Chinese purchases of 

soybeans, corn, wheat, sorghum, beef, pork, and other products remains strong. 

China bought $36 billion of U.S. agricultural products in 2022. 

China has also been addressing the commitments they made to improve and reform 

many standards in the Agreement. Long-standing barriers to the export of U.S. beef, 

pork, poultry, and other products have been or are being resolved, pursuant to the 

Agreement. As these barriers go down, the opportunity for increased U.S. commodity sales improves. 

An ongoing trade relationship with China is critical for U.S. farmers and ranchers. 

U.S.-South Korea 

The U.S.-South Korea Free Trade Agreement (KORUS) entered in force on March 

25, 2012. The agreement eliminated or reduced tariff and non-tariff barriers on agricultural and other products. U.S. agricultural exports to South Korea reached an 

all-time high in 2022 at $9.5 billion. 

U.S.-Japan 

The U.S.-Japan Trade Agreement went into effect on Jan. 1, 2020. The tariffs applied to U.S. products are now the same as those applied to the products of the 

other countries with a trade agreement with Japan. Tariffs are being reduced or 

eliminated on a variety of U.S. agricultural exports to Japan. The U.S. and Japan 

should continue talks on the remaining issues, such as SPS rules, which would help 

lead to a comprehensive FTA between the U.S. and Japan. The agreement on the 
88 

operation of Japan’s beef safeguard mechanism will help increase sales of U.S. beef 

products. 

U.S. agricultural exports to Japan were over $15 billion in 2022. 

USMCA 

The U.S.-Mexico-Canada Agreement is important for the continuation and improvement of trade among the nations of North America. Canada ($28.3 billion) and Mexico ($28 billion) are the second and third largest export markets for U.S. agriculture. 

The implementation and enforcement of this Agreement will yield future growth for 

our exports. 

Issues between the U.S. and Canada on dairy imports, and between the U.S. and 

Mexico on biotech corn, are currently in the dispute settlement system. 

U.S.-United Kingdom 

The U.S. and the United Kingdom (UK) reached an agreement to resolve the steel 

tariffs dispute between the two countries. This agreement removed the retaliatory 

tariffs on U.S. agricultural products placed by the UK after the U.S. placed tariffs 

on UK steel and aluminum. 

We support a resumption of trade negotiations between the U.S. and the UK to deal 

with non-science-based barriers to our agricultural exports. 

Trade Promotion Authority 

The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 

(Trade Promotion Authority) ended on July 1, 2021. Farm Bureau recognizes the 

crucial importance of Trade Promotion Authority and supports its reauthorization. 

The negotiating objectives set by Congress, the consultation requirements of the Administration with Congress and the voting procedures established under TPA are 

important to the successful negotiation and conclusion of trade discussions. 

World Trade Organization 

The Biden Administration will need to deal with various WTO reform issues such 

as the operation of the Appellate Body. For agriculture, we support working toward 

increased transparency through an improved notifications process. We do not support discussion of subsidy levels without a full discussion of market access initiatives. 

Sustainability 

U.S. farmers and ranchers look to be partners in addressing the challenges of our 

changing climate. Not only are agriculture’s emissions low, American farmers and 

ranchers are taking active steps to make their footprint even smaller. This is best 

accomplished through policies that provide voluntary, incentive-based tools for farmers, ranchers, and forest owners to maximize the sequestration of carbon. This approach will also help achieve a reduction in greenhouse gas emissions; increase the 

resilience of the land; advance science-based outcomes and help rural economies 

adapt. 

Conclusion 

U.S. farmers and ranchers rely on export markets for over twenty percent of agricultural production. As Congress considers future discussions with the nations that are 

our most important export destinations, and those that have the potential to grow 

in importance, we need to consider how the proposed Indo-Pacific Economic Framework, and other initiatives, can most effectively expand agricultural exports to the 

benefit of the nation’s farmers and ranchers. 

AMERICANS FOR FREE TRADE

April 6, 2023 

The Honorable Ron Wyden The Honorable Mike Crapo 

Chairman Ranking Member 

U.S. Senate U.S. Senate 

Committee on Finance Committee on Finance 

Washington, DC 20510 Washington, DC 20510 

The Honorable Jason Smith The Honorable Richard Neal 

Chairman Ranking Member 

U.S. House U.S. House 
89 

1 CBP Trade Statistics, https://www.cbp.gov/newsroom/stats/trade. 2 Economic Impact of Section 232 and 301 Tariffs on U.S. Industries, https://www.usitc.gov/ 

publications/332/pub5405.pdf, March 15, 2023. 

Committee on Ways and Means Committee on Ways and Means 

Washington, DC 20515 Washington, DC 20515 

RE: Statement for the Hearing Record: The President’s 2023 Trade Policy 

Agenda 

Dear Chairman Wyden, Ranking Member Crapo, Chairman Smith, and Ranking 

Member Neal, 

The Americans for Free Trade coalition, a broad alliance of American businesses, 

trade organizations, and workers united against tariffs, respectfully submits this 

written statement to include in the public record of the Senate Finance Committee 

and House Ways and Means Committee’s (‘‘the Committees’’) 2023 Trade Policy 

Agenda hearings, which took place on March 23 and 24, respectively. We appreciate 

the Committees holding hearings on this important matter. 

By way of background, Americans for Free Trade represents every part of the U.S. 

economy including manufacturers, farmers and agribusinesses, powersports, retailers, technology companies, service suppliers, natural gas and oil companies, importers, exporters, and other supply chain stakeholders. Collectively, we employ tens of 

millions of Americans through our vast supply chains. 

For more than 4 years, AFT has called for an end to the China 301 tariffs which 

have had a disproportionate economic impact on American companies, consumers, 

and workers and that have failed to change China’s unfair trade practices relating 

to intellectual property rights, forced technology transfers, and innovation. We have 

also repeatedly called for the administration to find a new path forward to address 

the ongoing China trade issues. We believe it is time for a strategic realignment of 

the tariffs to focus on the original intent of the 301 investigation and seek alternate 

measures, including working with our allies, to achieve the necessary changes in 

China’s behavior. 

Until that time, we also believe that USTR should relaunch a fair and transparent 

exclusion process that is available to all HTS lines impacted by the 301 tariffs. 

Members of Congress have repeatedly urged USTR to institute a robust process, including through letters sent by House and Senate members to Ambassador Tai last 

year as well as through appropriations language. Yet, USTR has refused to reestablish such an exclusions process and, in fact, stated in its fiscal year 2024 budget 

request that it anticipates work relating to product exclusion requests to decrease. 

This suggests that USTR has no intention of administering a robust exclusions process in the next fiscal year. We therefore believe it is important for Congress to insist 

that USTR make a products exclusions process available immediately and for as 

long as section 301 tariffs remain in place. 

I. American Businesses Pay the 301 Tariffs, Not China 

Since April 2018, U.S. Customs and Border Protection has assessed more than $173 

billion1 in section 301 tariffs on American companies who import products from 

China. These taxes continue to create tremendous uncertainty, increase the cost of 

doing business in the United States, and place a financial burden on American businesses—negatively impacting their ability to invest in their companies, hire more 

American workers, innovate new technologies, and remain competitive globally. The 

tariffs also have an impact on consumers. While many companies have tried to absorb the costs of the tariffs, many have had to share the costs with final consumers. 

AFT has argued for years that American companies, not Chinese companies, bear 

the economic brunt of the tariffs. Those who argue otherwise are simply ignoring 

reality. This was confirmed by the non-partisan, independent U.S. International 

Trade Commission (USITC) in its recent report entitled ‘‘Certain Effects of Section 

232 and 301 Tariffs Reduced Imports and Increased Prices and Production in Many 

U.S. Industries.’’ 2 The report states: ‘‘U.S. importers bore nearly the full cost of 

these tariffs because import prices increased at the same rate as the tariffs. The 

USITC estimated that prices increased by about 1 percent for each 1 percent increase in the tariffs under sections 232 and 301.’’ 

While we would have liked to have seen a more fulsome discussion in the USITC 

report regarding the 301 tariffs’ impact on downstream industries and consumers, 

we welcomed the report and were pleased that it confirmed the economic impact of 

the 301 tariffs that we have been discussing for years. As part of the study, AFT 
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shared materials, including a list of Studies on Economic Impact of Tariffs—2018– 

2022 and a list of Articles on the Impact of Tariffs, which we have also included 

as part of this statement for the record. 

During her testimony at the trade agenda hearings, Ambassador Tai noted that 

USTR is currently undertaking its statutory 4-year review of the China 301 tariffs. 

We continue to believe this review needs to be fair and transparent. We are disappointed that the review has not included a public hearing—something USTR offered when promulgating Lists 1–4 tariffs and that the USITC offered in crafting 

its recent economic impact report. While written comments are extremely important, 

they alone do not provide the same opportunity for companies to tell their story 

about the ongoing impact of the tariffs and answer questions from the Section 301 

Committee as a public hearing would provide. That said, we encourage Members of 

Congress to insist that USTR use the 4-year review process to conduct a holistic assessment of whether the tariffs have achieved their stated objectives, as identified 

in the underlying section 301 report, and provide a full picture of the impact the 

tariffs have had to the U.S. economy, as well as American businesses, workers, and 

consumers. USTR should seriously consider whether the 301 tariffs truly provide leverage to elicit a change in behavior by China or whether they represent the best 

path forward given the current state of the U.S. economy. 

II. 301 Tariffs’ Impacts on American Businesses and Consumers 

As part of the 301 4-year review, AFT provided USTR with feedback from a number 

of coalition partners regarding the negative impacts that the tariffs have had on 

their businesses, workers and consumers. We have provided some of those stories 

below. 

a. Tariffs Make U.S. Manufacturers Less Competitive 

Proponents of the section 301 tariffs claim that lifting them—and even offering a 

targeted product exclusions process—would harm domestic manufacturing. We 

strongly disagree with that sentiment. While protecting domestic manufacturing 

was never the stated purpose of the section 301 tariffs, they have been harmful to 

manufacturers by taxing inputs they need to produce more products domestically. 

Consider the case of one manufacturer who has been producing speakers in the 

United States since 1949. This manufacturer produces speakers for nearly every 

audio application—mass transit, aerospace, medical equipment, professional audio, 

motorcycles, home audio, etc. 

Because it is one of the last companies that still builds speakers in the United 

States, the company has been unable to find domestic suppliers who can produce 

the specialty parts required for the speakers. To be globally competitive, the company must buy its components primarily from China where their global competitors 

purchase their parts. Unfortunately, these parts are on List 3 and are subject to 

an additional 25% tariff. The company described this as ‘‘a direct addition of 25% 

to our cost of goods sold.’’ The company further stated that its competitors who import completed speakers made in China only pay a 7.5% tariff. The company said 

this makes it ‘‘less competitive than [its] USA competitors who import complete 

products made in China with no USA labor content’’ and that it is essentially ‘‘penalized for building speakers in America.’’ 

Because of the significant impact to its ability to compete, the company said it is 

now ‘‘moving more manufacturing out of the USA.’’ In other words, the tariffs have 

disincentivized manufacturing in the United States. 

An information technology company told us something similar. This American business pays tariffs on parts and components listed on Lists 3 and 4a and initially paid 

over $350 million per year in section 301 tariffs. The company moved some of its 

supply chain from China to Mexico to reduce this duty burden by a little more than 

half, but these increased costs were eventually passed along to customers through 

price increases. The company previously sought product exclusions on key parts and 

components under the Trump Administration—a process which no longer exists— 

but was denied. Because the company cannot source the parts and components from 

anywhere other than China, it is now considering whether to move its manufacturing to Mexico and then import the products into the United States duty-free— 

putting 1,300 American jobs in jeopardy. 

The tariffs have also prevented small American businesses from growing. We spoke 

with a company that produces home theater accessories, and it described the impact 

of the tariffs on its products—which are on List 3—as follows: 
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The tariff impacted us in three major ways. 1. The best manufacturers are 

all located in China for our products. Finding new manufacturers, even 

here in the US, was difficult to secure due to the premium level of our technology and design. Also with COVID happening immediately after List 3 

was released, traveling abroad to find other manufacturers was impossible. 

2. If we did find a manufacturer that was at our standard, the additional 

cost of building new tools, that had already been made and paid for in 

China, was a very hard burden on our small company. Also, we have to certify a good portion of our goods and any new product created from a new 

tool has to go through recertification at a cost that was also unbearable to 

our small business. 3. Being a brand new business, we secured funding to 

build and grow our brand, and immediately 20% of the funding went to a 

cost via the tariff that I had slated for new technology and product development, employees, and programs with our retail partners. It stunted our 

growth. Though there are more, these three actions have cost us in multiple 

ways the ability to grow and compete with businesses that have been 

around much longer. 

Another small business we spoke with imports industrial magnets from China that 

are incorporated into devices that work in vehicle engines to conserve fuel. The business owner produces these devices in the United States. The business owner told 

us that the section 301 tariffs have added a million dollars to his costs in the past 

several years. He described the impact as follows: ‘‘With this money I could have 

added at least one more engineer and support staff in the US. I also have European 

competitors who don’t have the extra 25% cost. It’s throwing money down a hole 

and makes no sense.’’ 

We spoke with another American manufacturer that produces a plastic material 

used in the development of U.S.-made parts for autos, farm equipment, transportation equipment and more. The value of the material comes largely from two key 

properties—hardness and rigidity. But to achieve these two key properties, the material must first be mixed with a specific chemistry that cures, or hardens, the final 

product. That essential hardening chemistry is not produced in the United States; 

it must be imported. Approximately 40 to 80 percent of the import is produced in 

China, with the balance produced in Japan and Taiwan. But there is not enough 

capacity in Japan and Taiwan to supplant the supply from China. Therefore, applying the section 301 tariff to this import does not hurt China—it hurts U.S. businesses which have no choice but to pay the tariff anyway to continue to enhance 

the competitiveness of their American made products. 

These examples illustrate how the tariffs have both impacted small businesses and 

will continue to impact American businesses for as long as they remain in place. 

Consider the example of a small flower seed business that has paid ‘‘nearly $1.5 million in tariffs for seed produced in China.’’ The company said that this money could 

have been used ‘‘for further investment in our technology, improving customer service or increasing seed quality.’’ Because the seeds they cultivate ‘‘need that environment for cultivation purposes’’ (China), the business cannot readily shift production 

of additional seed to other locations to accommodate the tariffs. This small business 

also has European and Asian competitors who do not pay the tariffs, so it has been 

forced to absorb most of the costs to remain competitive. Most concerning, the business is considering moving jobs to China, which would also require transferring proprietary technology, to cope with the increased costs: 

We have been exploring options to make better use of the farm and are 

looking at shipping seed that is produced in China to other markets to 

avoid the tariffs. This is rather cumbersome because we need to manage 

separate inventories, we need to much more carefully plan what we can 

place in China and it has caused us to move some jobs from the US to 

China to deal with this. If we ramp the activity up we will need to transfer 

some proprietary technology from the US to China or other countries which 

we prefer not to do. 

The section 301 tariffs have harmed, and continue to harm, U.S. manufacturers and 

make them less competitive vis-a`-vis their competitors and China. They should be 

lifted immediately. 

b. Tariffs Increase Costs for American Consumers and Contribute to 

Inflation 

Proponents of the tariffs also ignore the very real contribution tariffs have had on 

inflation. While there are various contributing factors to inflation, lifting tariffs is 

one of the few tools that the Administration could utilize to bring down inflation. 
92 

At a time when inflation is at a 4-decade high, the Administration should be 

leveraging every tool at its disposal to combat this crisis, which is squeezing hardworking American families and businesses. Time and again, we have heard from 

businesses of all kinds that they were forced to pass along the increased costs associated with the section 301 tariffs directly to their customers. Consider the statements we received from coalition members below: 

There’s a 25% supplemental tariff on our new product, [a type of lamp], we have 

to pass on the cost to customers (total tariff of 28%). We would lower the price 

right away if the Trump tariff were removed. 

—Consumer Electronics Company 

We were impacted by Lists 3 and 4a, initially paying over $350M per year in 

tariffs. Supply chain moves—mostly from China to Mexico—cut that to where 

we are paying just over $150M per year today (2022). We immediately passed 

on the costs to our customers through price increases, which of course, is inflationary. 

—Information Technology Company 

The 25% tariff (tax) has been nothing but that, a tax or penalty on us as a small 

US based business. The Chinese do not pay the tariff or any portion of it! We 

do not have the gross profit margins to absorb this tariff so as a result we need 

to incorporate this into what we charge our customer—more US based small 

businesses harmed by these tariffs/taxes. 

—Lighting Manufacturer and Distributor 

The tariffs on our China origin goods has [sic] directly impacted or [sic] business strategy regarding the place of production for certain vegetable seed crops 

such as Cucumber, Melon, Tomato and Watermelon seeds. Producing hybrid 

vegetable seeds takes years of experience and knowledge. Weather, climate, and 

drought conditions are major factors especially as we are facing the global climate crisis. There are very few options for qualified and trusted growers. Our 

Chinese suppliers have an excellent reputation and service levels sealed with 

production contracts that are reviewed by legal and signed each year. Who pays 

the price for these high tariff rates on China origin seeds? It is the American 

people who pay in the form of higher prices for healthy food in the US market 

place. 

—Vegetable Seed Business 

c. Tariffs Disproportionately Harm Low-Income American Families 

Tariffs harm American families by raising prices on consumer products, and this is 

felt most acutely by low-income families. A report by the Progressive Policy Institute 

found that tariffs on consumer goods are discriminatory and regressive because lowincome Americans are disproportionately impacted by these tariffs, especially singleparent families and people of color. 

We spoke with a small American business that produces baby products, including 

a portable crib that it developed to promote a safe sleeping environment for infants 

and that is also subject to the section 301 tariffs. The company has distributed thousands of these cribs to low-income families for over 20 years through a non-profit 

organization, directly contributing to the reduction in infant deaths from Sudden Infant Death Syndrome (SIDS) and Accidental Suffocation and Strangulation in Bed 

(ASSB). The company stated that all proceeds from the sales of these cribs go back 

into the non-profit so that it can continue to provide its ‘‘partners with the tools to 

educate their communities about the importance of infant safe sleep.’’ When asked 

about the impact of the tariffs on its mission, the company said this: 

Until the tariffs were imposed, we prided ourselves on providing a safety approved crib . . . to our partners for under $50. Because of the 25% tariff and 

the increase in shipping from China, that was imposed on the [crib], we had 

to raise the price of our unit from $49.99 to $69.99, resulting in a decrease in 

the number of [cribs] that our partners were able to purchase since 2019 by well 

over 25%. What that means is 25% fewer infants have been able to sleep in a 

safe sleeping environment and babies lives have been put at risk. We know you 

can not effect immediate change in the high cost of shipping, however, by relieving us of the $25% tariff on our [crib] we will be able to reduce its price and 

assure that more babies lives will be saved from SIDS or ASSB. 
93 

This baby products company ended its testimonial with a plea that the Administration consider the request that the tariffs be lifted to help ‘‘low-income parents 

throughout the country, and of course, the babies!’’ 

This example could not be starker. The tariffs are harming U.S. businesses and 

Americans in ways large and small, including impacting the ability of small businesses and non-profits to get life-saving baby products into the hands of low-income 

families. 

III. China Strategy Moving Forward 

We urge Members of Congress to call upon the Biden-Harris Administration to provide a clear and transparent China trade strategy. We know that this strategy goes 

well beyond the China 301 tariffs, but we believe addressing the tariff issues and 

China’s unfair trade practices associated with them are important for the reasons 

we discussed above. 

As a near-term path forward, with regards to the tariffs specifically, AFT suggests 

the following: 

(1) Realign the Section 301 Tariffs—Through the strategic 4-year review process, USTR and the administration should strategically realign the tariffs away 

from consumer goods and manufacturing inputs and equipment that are currently unavailable in sufficient quantities from sources other than China. 

These tariffs harm American companies and consumers and are not related 

to China’s Made in 2025 program or critical sectors. The realignment should 

provide the opportunity for the administration to refocus the tariffs and create 

better leverage to achieve changes in China’s unfair trade practices regarding 

forced technology transfer and intellectual property theft. As part of this realignment, USTR should also include a new, fair, predictable, and transparent 

exclusion process available to all products subject to the 301 tariffs to ensure 

that American companies are not unduly harmed. 

(2) Use Targeted Tools to Hold Bad Actors Accountable—There has been 

ongoing discussion about what tools other than tariffs can be used to achieve 

success regarding China’s trade practices. USTR has discussed other ‘‘tools in 

the toolbox’’ and potentially the development of ‘‘new tools’’ but has stopped 

short of articulating what those might be. We believe these discussions are incredibly important and need to continue, with stakeholder input. We need to 

find the right set of tools that address China’s unfair trade practices in a targeted way without causing disproportionate economic harm to American businesses, workers and consumers. 

(3) Support U.S. Supply Chain Resiliency and Competitiveness by 

Partnering with Allies—AFT continues to call upon the administration to 

work with allies to address China’s unfair trade practices. This includes work 

at the G20, G7, World Trade Organization, and other multilateral and regional institutions. The U.S. can be much more effective in addressing China’s 

unfair trade practices by working in concert with allies. 

(4) Support Efforts on Supply Chain Diversification—Congress and the 

Biden-Harris Administration should support the U.S. business community’s efforts to further diversify supply chains. This includes developing an offensive 

trade agenda that supports supply chain diversification and ensures the U.S. 

does not cede global economic influence and international rulemaking to 

China. This should also include seeking new free trade agreements with our 

allies. Congress should also quickly act to retroactively renew expired trade 

preference programs including the Generalized System of Preferences (GSP), 

which provide sourcing alternatives to China, as well as the Miscellaneous 

Tariff Program (MTB), which provides temporary duty benefits for U.S. manufacturers and businesses. 

IV. Conclusion 

We appreciate the Committees’ continued engagement and focus on ensuring that 

U.S. trade policy advances American values and boosts U.S. competitiveness. We 

urge the Committees to continue weighing in with the Biden-Harris Administration 

to ensure that destructive tariffs are lifted, and that a new and more effective approach to addressing China’s unfair trading practices is adopted. We thank the 
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Committees for holding this year’s trade agenda hearings and look forward to continuing to work with you. 

Sincerely, 

Accessories Council Licensing Industry Merchandisers’ Association 

ACT | The App Association Los Angeles Customs Brokers and Freight Forwarders Association 

Agriculture Transportation Coalition (AgTC) Louisiana Retailers Association 

ALMA, International (Association of Loudspeaker Manufacturing and Acoustics) Maine Grocers and Food Producers Association 

American Apparel and Footwear Association 

(AAFA) 

Maine Lobster Dealers’ Association 

American Association of Exporters and Importers (AAEI) Maritime Exchange for the Delaware River 

and Bay 

American Association of Port Authorities Maryland Retailers Association 

American Bakers Association MEMA, The Vehicle Suppliers Association 

American Bridal and Prom Industry Association (ABPIA) Michigan Chemistry Council 

American Chemistry Council Michigan Retailers Association 

American Clean Power Association Minnesota Retailers Association 

American Down and Feather Council Missouri Retailers Association 

American Fly Fishing Trade Association Motorcycle Industry Council 

American Home Furnishings Alliance NAPIM (National Association of Printing Ink 

Manufacturers) 

American Lighting Association National Association of Chain Drug Stores 

(NACDS) 

American Petroleum Institute National Association of Chemical Distributors 

(NACD) 

American Pyrotechnics Association National Association of Foreign-Trade Zones 

(NAFTZ) 

American Rental Association National Association of Home Builders 

American Seed Trade Association National Association of Music Merchants 

American Specialty Toy Retailing Association National Association of Trailer Manufacturers 

(NATM) 

American Trucking Association National Confectioners Association 

Arizona Technology Council National Council of Chain Restaurants 

Arkansas Grocers and Retail Merchants Association National Electrical Manufacturers Association 

(NEMA) 

Association For Creative Industries National Fisheries Institute 

Association for PRINT Technologies National Foreign Trade Council 

Association of American Publishers National Grocers Association 

Association of Equipment Manufacturers 

(AEM) 

National Industrial Transportation League 

(NITL) 

Association of Home Appliance Manufacturers National Lumber and Building Material Dealers Association 

Auto Care Association National Marine Manufacturers Association 

Beer Institute National Restaurant Association 

BSA | The Software Alliance National Retail Federation 

Building Service Contractors Association International (BSCAI) National Ski and Snowboard Retailers Association 

Business Alliance for Customs Modernization National Sporting Goods Association 

California Retailers Association Natural Products Association 

Can Manufacturers Institute New Jersey Retail Merchants Association 

Chemical Industry Council of Delaware (CICD) North American Association of Food Equipment Manufacturers (NAFEM) 

Coalition of New England Companies for 

Trade (CONECT) 

North American Association of Uniform Manufacturers and Distributors (NAUMD) 

Coalition of Services Industries (CSI) North Carolina Retail Merchants Association 

Colorado Retail Council Ohio Council of Retail Merchants 

Columbia River Customs Brokers and Forwarders Association Outdoor Industry Association 

Computer and Communications Industry Association (CCIA) Pacific Coast Council of Customs Brokers and 

Freight Forwarders Associations Inc. 

Computing Technology Industry Association 

(CompTIA) 

Pennsylvania Retailers’ Association 

Consumer Brands Association PeopleforBikes 

Consumer Technology Association Personal Care Products Council 
95 

Council of Fashion Designers of America 

(CFDA) 

Pet Food Institute 

CropLife America Pet Advocacy Network 

Customs Brokers and Freight Forwarders Association of Washington State Plumbing Manufacturers International 

Customs Brokers and Freight Forwarders of 

Northern California 

Power Tool Institute (PTI) 

Electronic Transactions Association PRINTING United Alliance 

Energy Workforce and Technology Council Promotional Products Association International 

Experiential Designers and Producers Association 

Recreational Off-Highway Vehicle Association 

Exhibitions and Conferences Alliance Retail Association of Maine 

Fashion Accessories Shippers Association 

(FASA) 

Retail Council of New York State 

Fashion Jewelry and Accessories Trade Association Retail Industry Leaders Association 

Flexible Packaging Association Retailers Association of Massachusetts 

Florida Ports Council RISE (Responsible Industry for a Sound Environment) 

Florida Retail Federation RV Industry Association 

Footwear Distributors and Retailers of America (FDRA) San Diego Customs Brokers and Forwarders 

Association 

Fragrance Creators Association Semiconductor Industry Association (SIA) 

Game Manufacturers Association Snowsports Industries America 

Gemini Shippers Association Software and Information Industry Association 

(SIIA) 

Georgia Retailers South Dakota Retailers Association 

Global Business Alliance Specialty Equipment Market Association 

Global Chamber® Specialty Vehicle Institute of America 

Global Cold Chain Alliance Sports and Fitness Industry Association 

Greeting Card Association TechNet 

Halloween and Costume Association (HCA) Telecommunications Industry Association 

(TIA) 

Home Fashion Products Association Texas Retailers Association 

Home Furnishings Association Texas Water Infrastructure Network 

Household and Commercial Products Association The Airforwarders Association 

Housing Affordability Coalition The Fertilizer Institute 

Idaho Retailers Association The Hardwood Federation 

Illinois Retail Merchants Association The Vinyl Institute 

Independent Office Products and Furniture 

Dealers Association (IOPFDA) 

Toy Association 

Indiana Retail Council Travel Goods Association 

Information Technology Industry Council (ITI) Truck and Engine Manufacturers Association 

(EMA) 

International Association of Amusement Parks 

and Attractions (IAAPA) 

United States Council for International Business 

International Bottled Water Association 

(IBWA) 

United States Fashion Industry Association 

International Foodservice Distributors Association U.S. Global Value Chain Coalition 

International Housewares Association U.S.-China Business Council 

International Warehouse Logistics Association Virginia Association of Chain Drug Stores 

International Wood Products Association Virginia Retail Federation 

ISSA—The Worldwide Cleaning Industry Association Virginia-DC District Export Council (VA–DC 

DEC) 

Jeweler’s Vigilance Committee Washington Retail Association 

Juice Products Association (JPA) Water Quality Association 

Juvenile Products Manufacturers Association Window and Door Manufacturers Association 

Leather and Hide Council of America World Pet Association, Inc. (WPA) 

Attachment 1—Studies on Economic Impact of Tariffs—2018–2022 

1. May 2022, American Action Forum: The Total Cost of U.S. Tariffs; Tom Lee 

and Jacqueline Varas. 

2. April 2022, Tax Foundation: Tracking the Economic Impact of U.S. Tariffs 

and Retaliatory Actions; Erica York. 
96 

3. March 2022, Peterson Institute of International Economics: For Inflation Relief, the United States Should Look to Trade Liberalization; Gary Clyde 

Hufbauer, Megan Hogan, and Yilin Wang. 

4. January 2022, USDA Economic Research Service: The Economic Impacts of 

Retaliatory Tariffs on U.S. Agriculture; Stephen Morgan, Shawn Arita, Jayson 

Beckman, Saquib Ahsan, Dylan Russell, Philip Jarrell, and Bart Kenner. 

5. December 2021, Tax Foundation: Who Really Pays the Tariffs? U.S. Firms 

and Consumers, Through Higher Prices; Alex Durante and Alex Muresianu. 

6. October 2021, National Bureau of Economic Research: Illuminating the Effects 

of the US-China Tariff War on China’s Economy; Davin Chor and Bingjing Li. 

7. May 2021, Moody’s Investor Service Report, as reported in ‘‘U.S. companies 

are bearing the brunt of Trump’s China tariffs,’’ says Moody’s, CNBC, Yen 

Nee Lee. 

8. January 2021, IHS Markit: Did the U.S. section 301 tariffs work?; Yacine 

Rouimi. 

9. May 2020, National Bureau of Economic Research: The Effect of the U.S.- 

China Trade War on U.S. Investment; Mary Amiti, Sang Hoon Kong and 

David Weinstein. 

10. January 2020, National Bureau of Economic Research: Who’s Paying for the 

US Tariffs? A Longer-Term Perspective; Mary Amiti, Stephen J. Redding, 

David E. Weinstein. 

11. January 2020, National Bureau of Economic Research: Rising Import Tariffs, 

Falling Export Growth: When Modern Supply Chains Meet Old-Style Protectionism; Kyle Handley, Fariha Kamal, Ryan Monarch. 

12. January 2020, Congressional Budget Office: The Budget and Economic Outlook 2020 to 2030. 

13. December 2019, Federal Reserve Board: Disentangling the Effects of the 2018– 

2019 Tariffs on a Globally Connected U.S. Manufacturing Sector; Aaron 

Flaaen and Justin Pierce. 

14. November 2019, United Nations Conference on Trade and Development, 

Trade and Trade Diversion Effects of United States Tariffs on China; 

Alessandro Nicita. 

15. October 2019, Revised December 2019, National Bureau of Economic Research: The Consumption Response to Trade Shocks: Evidence from the USChina Trade War; Michael E. Waugh. 

16. October 2019, National Bureau of Economic Research: Tariff Passthrough at 

the Border and at the Store: Evidence from US Trade Policy; Alberto Cavallo, 

Gita Gopinath, Brent Neiman, Jenny Tang. 

17. September 2019, Board of Governors of the Federal Reserve System, The Economic Effects of Trade Policy Uncertainty; Dario Caldara, Matteo Iacoviello, 

Patrick Molligo, Andrea Prestipino, Andrea Raffo. 

18. September 2019, Moody’s Analytics: Trade War Chicken: The Tariffs and the 

Damage Done; Mark Zandi, Jesse Rogers and Maria Cosma. 

19. March 2019, Revised October 2019, National Bureau of Economic Research: 

The Return to Protectionism; Pablo D. Fajgelbaum, Pinelopi K. Goldberg, Patrick J. Kennedy, Amit K. Khandelwal. 

20. March 2019, National Bureau of Economic Research: The Impact of the 2018 

Trade War on U.S. Prices and Welfare; Mary Amiti, Stephen J. Redding, 

David E. Weinstein. 

21. February 2019, Trade Partnership Worldwide, LLC: Estimated Impacts of 

Tariffs on the U.S. Economy and Workers; Laura Baughman and Joseph Francois. 

22. December 2018, National Bureau of Economic Research: Macroeconomic Consequences of Tariffs; Davide Furceri, Swarnali A. Hannan, Jonathan D. Ostry, 

Andrew K. Rose. 
97 

Attachment 2—Articles on the Impact of Tariffs 

Date Headline Outlet 

6/7/2022 Biden Must Roll Back the Tariffs Weighing So 

Heavily On the Economy 

RealClearMarkets 

5/17/2022 As Businesses Struggle, Tariffs Create Avoidable 

Challenges 

The Well News 

4/15/2022 End China trade war Times-Tribune 

3/26/2022 Supply Chain Issues Continue to Hurt Businesses. Lifting Tariffs Can Help. RealClearPolitics, The 

Center Square, Livingston Parish News 

3/24/2022 To Help Revive the U.S. Economy, the Biden Administration Must Lift the Tariffs RealClearMarkets 

3/20/2022 Tariffs Hurt Virginia Businesses The Gazette-Virginian 

2/25/2022 To Fulfill His Economic Vision, President Biden 

Must End Trump’s Tariffs 

The Well News 

2/14/2022 Want to Stem Inflation? End the Trade War RedState 

2/14/2022 Trade War Continues to Batter New Hampshire 

Businesses 

NH Journal 

2/11/2022 2 Years Since Trade Deal with China, Tariffs 

Aren’t Working for American Businesses 

Entrepreneur.com, 

MSN 

2/8/2022 Cutting Chinese tariffs would help Del. businesses Delaware Business 

Times 

1/25/2022 Keep Wisconsin moving forward WisPolitics 

12/13/2021 Amid Pressing Economic Crises, Biden Administration Must Lift Tariffs Townhall 

12/9/2021 Biden must end failed trade policy that has hurt 

Pennsylvanians 

Tribune-Review 

11/10/2021 It’s Time to End the Trade War With China Newsweek 

11/3/2021 Post-Covid, the Federal Government Must Remain Committed to Helping Businesses Entrepreneur.com 

10/12/2021 U.S. tariffs on Chinese goods hurts Arizona’s economic growth Arizona Daily Star 

9/29/2021 For Washington’s Economy to Fully Recover, 

Biden Administration Must End Tariffs 

Kirkland Patch 

9/14/2021 Duane Garfoot: Continued tariffs still loom large 

following Biden’s Wisconsin visit 

WisPolitics 

9/7/2021 Trade Wars Worsen Shipping Crisis Townhall 

7/22/2021 The time has come for Biden to repeal Trump’s 

tariffs 

News Journal 

7/12/2021 Biden can help American workers and protect 

U.S. jobs by ending trade wars 

Washington Times 

6/23/2021 Ongoing trade war limits recovery for U.S. businesses Tribune-Review 
98 

Attachment 2—Articles on the Impact of Tariffs—Continued 

Date Headline Outlet 

5/19/2021 As COVID–19 recovery begins, Granite State 

needs tariff relief 

Manchester Ink Link 

5/7/2021 Oregon businesses bear the brunt of the U.S. tariffs on China The Oregonian 

4/5/2021 Repealing Trump-era trade tariffs would throw a 

lifeline to struggling businesses 

Crain’s New York Business 

3/25/2021 Repeal Tariffs to Boost the Economy, Help Small 

Businesses 

RealClearMarkets 

3/3/2021 Tariff relief must play a central role in Biden 

trade agenda 

Des Moines Register 

2/24/2021 Removing tariffs is key to economic relief Washington Examiner 

2/12/2021 Repealing tariffs should be one of Biden’s first 

acts 

Wisconsin State Journal, Herald Times 

Reporter 

2/7/2021 Biden can save Americans billions of dollars by 

ending Trump’s trade war with China now 

Business Insider 

12/21/2020 Trump Must Repeal Tariffs to Provide Americans Relief Inside Sources 

12/12/2020 If Biden Wants to Help Middle America, He’ll 

Lift Tariffs 

RealClearPolitics 

11/21/2020 Prospect of Tariffs on Vietnamese Imports Jeopardizes American Recovery RedState 

10/31/2020 A Pledge To Repeal Tariffs Is Crucial For Both 

Candidates 

Townhall 

10/29/2020 Tariffs Continue to Hurt Wisconsin The Baraboo News Republic 

10/29/2020 Tariffs Must Take Center Stage in Leadup to 

Election Day 

NH Journal 

10/28/2020 WTO ruling and domestic lawsuits may boost 

Biden’s chances of winning 

WisPolitics 

9/24/2020 Floridians Are Frustrated With The Trade War The Floridian 

9/22/2020 Trump’s trade war has punished Americans 

more than China 

Laconia Daily Sun 

9/17/2020 Mike Duerst: Tariffs Prove to be a Key Issue for 

Wisconsin Voters 

WisPolitics 

9/16/2020 Path to White House Includes Repealing Tariffs RedState 

6/1/2020 President Trump’s Tariffs Put Economic Recovery at Risk RedState 

5/26/2020 One Big Way To Help US Businesses Come Back 

After Coronavirus 

Townhall 

5/26/2020 More tariffs would bring Missouri to its breaking 

point 

Missouri Times 
99 

Attachment 2—Articles on the Impact of Tariffs—Continued 

Date Headline Outlet 

5/7/2020 Stimulus is helpful, but tariffs are still threatening our livelihoods MinnPost 

4/4/2020 Trade War Damage Worsened by Global Health 

Pandemic 

RealClearPolitics 

3/6/2020 Trump’s trade war threatens S.C.’s economy and 

workers—Democratic presidential candidates 

should vow to end it 

Charleston City Paper 

3/3/2020 Trade War Could Unravel President Trump’s 

Economic Accomplishments 

RedState 

2/10/2020 The trade war with China has hurt my small 

business in Massachusetts 

Boston Globe 

2/10/2020 The Trade War Hurts President Trump’s ReElection Chances in New Hampshire NH Journal 

2/1/2020 The Trade War is Undoing President Trump’s 

Economic Achievements | Cucciniello 

Save Jersey 

1/29/2020 Democratic candidates should talk more about 

Trump’s trade war 

Sioux City Journal 

1/19/2020 I supported Trump’s trade war. But now it’s 

driving my industry out of business 

Star Ledger 

1/18/2020 Trump can win Wisconsin if he ends tariffs Wisconsin State Journal 

12/31/2019 The trade war has cost us over $500,000 dollars PennLive 

12/19/2019 In the Next Debate, Democrats Must Highlight 

Damage Trump’s Tariffs Have Caused 

LA Focus 

12/4/2019 Trade war undermines strong Texas economy 

and Trump’s reelection chances 

Houston Chronicle 

12/3/2019 Trump has been great for Black Americans, but 

the trade war could hinder the progress 

The State 

11/25/2019 Tariffs are slowly driving me out of business Concord Monitor 

11/7/2019 Tariffs Could Hurt the Holidays—and President 

Trump’s Re-Election in 2020 

Iowa Standard 

10/15/2019 Enough Is Enough: Tariffs Are Damaging Ohio’s 

Economy 

RealClearPolitics 

10/4/2019 How Tariffs Are Hurting Trump’s Base—and His 

Chances of Re-election 

Save Jersey 

9/20/2019 Tariffs Could Hurt President Trump’s Chances 

in North Carolina 

Townhall 

8/25/2019 How Tariffs Are Hurting My Business—And 

Your Wallet 

NY Observer 

8/14/2019 Tariffs Are Taxes Paid by New Hampshire Businesses and Consumers NH Journal 
100 

Attachment 2—Articles on the Impact of Tariffs—Continued 

Date Headline Outlet 

8/4/2019 Trump’s economy is booming—repealing tariffs 

will boost it even more 

The Hill 

8/2/2019 Tariffs Looming over 2020 Election RedState 

7/10/2019 Rohn Bishop: Wisconsin needs 4 more years of 

Trump’s economic policies—minus tariffs 

WisPolitics 

7/9/2019 LTE: Tariffs should be removed Gettysburg Times 

6/19/2019 Tariffs hurting same Floridians Trymp is trying 

to help 

Sun Sentinel 

6/19/2019 Trump’s tariffs endanger Wisconsin’s booming 

economy 

The Cap Times 

6/13/2019 A Quick End to the Trade War Is the Key to Victory for President Trump in 2020 Townhall 

CENTER FOR FISCAL EQUITY

14448 Parkvale Road, #6 

Rockville, MD 20853 

fiscalequitycenter@yahoo.com 

Statement of Michael G. Bindner 

Chairman Wyden and Ranking Member Crapo, thank you for the opportunity to 

submit comments to the committee. 

Within the past week, Chinese President Xi met with Vladimir Putin to strengthen 

economic ties, although any direct help with the Russian aggression in Ukraine (not 

a regional conflict) was not disclosed. If such aid is found to exist, it is news to no 

one that this would be very bad for our trade relationship with China. 

Barring such stupidity, an agreement between Russia and China on energy and resources is geographically inevitable, although its instigation by authoritarian regimes is problematic for anyone outside the ruling oligarchy on one side and the 

Communist Party on the other. Revolution in both countries is inevitable and may 

occur sooner than later—which would be good news for the Mongols, the Uyghurs 

and the Ukranians (and many others). 

The continuing conflict in Ukraine is not good for the Belt Road initiative. If China 

acts in their own interests in this matter, rather than in the interests of the 

strongmen, development will be good for all. 

Until sanity returns, a rapprochement between Russia and China is all the more 

reason to dust off plans for the Trans-Pacific Partnership (or whatever Ambassador 

Tai wishes to call it). We made our feelings about extra-legal provisions of trade 

treaties in regard to local law last year—and the years before. Global capitalism is 

bad enough. Global authoritarian capitalism is worse. Using right to work laws to 

leave American workers naked in the face of such power (including migrants to the 

United States) is a practice that must be ended if we wish to claim moral high 

ground in dealing with the Chinese. 

The crisis on the border continues. The President is finding that dealing with it is 

not so easy as evicting Stephen Miller from the West Wing, which is why immigration reform must be part of the trade policy agenda. Workers who do not have documentation problems cannot be easily exploited—especially if they are able to 

unionize. This will also help level the playing field for American workers. 

An analysis of how consumption taxes can improve our trade policy is found in our 

first attachment, as it was last year. We have updated our tax reform and debt papers, which are also attached. 

Congress has recently passed corporate minimum taxes to come into compliance 

with the OECD’s agreement on this subject. The President’s budget includes further 
101 

proposals in this area. I am no fan of corporate income taxation when value-added 

taxes (both GST/Invoice VAT and Subtraction VAT) are available. 

Our proposal for an Asset Value-Added Tax will require international cooperation. 

Part of trade is moving money around—including financial assets. An asset VAT as 

a replacement for capital gains taxes and capital returns must go farther than the 

border. It is too easy to shift to offshore stock exchanges where such taxes do not 

exist. International agreements on rates and enforcement structures are vital for 

such a tax to work. The model for negotiating the CMT on a multi-national basis 

can be used for this effort. Again, please see the third attachment, which has been 

recently updated. 

Given that there is still no agreement on extending (or eliminating) the debt limit, 

our national debt attachment is a must read for members of the Republican Conference. It turns out that much of the national debt is held by managed fund 

accounts and bonds held by the wealthiest households. GOP donors need 

to make some phone calls, as they are the ones who will lose the most 

money the fastest in the event of a default. 

For more information on the debt, please see our study: Settling (and Squaring) Accounts: Who Really Owes the National Debt? Who Owns It? available from Amazon 

at https://www.amazon.com/dp/B08FRQFF8S. I can provide free copies of the 

prior version upon request and will distribute the latest edition once it is completed. 

The most recent bottom line estimates can be found in the second attachment. This 

shows who is on the hook for the debt and who benefits from it. 

A main conclusion of our analyses is that the national debt is the leverage for capitalism to the extent that debt securities allow Wall Street to offer riskier assets, 

such as mortgage backed securities embedded in Exchange Traded Funds, as well 

as more traditional offerings. Wealth held by the few (and the attachment shows 

how very few we mean), provides management absolute control of most workplaces. 

Employee-owned firms would not need such an unbalanced economy leveraged by 

American Treasury holdings. 

Thank you for the opportunity to address the committee. We are, of course, available for direct testimony or to answer questions by members and staff. 

Attachment One—Trade Policy 

Consumption taxes could have a big impact on workers, industry and consumers. 

Enacting an I–VAT is far superior to a tariff. The more government costs are loaded 

onto an I–VAT the better. 

If the employer portion of Old-Age and Survivors Insurance, as well as all of disability and hospital insurance are decoupled from income and credited equally and 

personal retirement accounts are not used, there is no reason not to load them onto 

an I–VAT. This tax is zero rated at export and fully burdens imports. 

Seen another way, to not put as much taxation into VAT as possible is to enact an 

unconstitutional export tax. Adopting an I–VAT is superior to it’s weak sister, the 

Destination Based Cash Flow Tax that was contemplated for inclusion in the TCJA. 

It would have run afoul of WTO rules on taxing corporate income. I–VAT, which 

taxes both labor and profit, does not. 

The second tax applicable to trade is a Subtraction VAT or S–VAT. This tax is designed to benefit the families of workers through direct subsidies, such as an enlarged child tax credit, or indirect subsidies used by employers to provide health insurance or tuition reimbursement, even including direct medical care and elementary school tuition. As such, S–VAT cannot be border adjustable. Doing so would 

take away needed family benefits. As such, it is really part of compensation. While 

we could run all compensation through the public sector. 

The S–VAT could have a huge impact on long term trade policy, probably much 

more than trade treaties, if one of the deductions from the tax is purchase of employer voting stock (in equal dollar amounts for each worker). Over a fairly short 

period of time, much of American industry, if not employee-owned outright (and 

there are other policies to accelerate this, like ESOP conversion) will give workers 

enough of a share to greatly impact wages, management hiring and compensation 

and dealing with overseas subsidiaries and the supply chain—as well as impacting 

certain legal provisions that limit the fiduciary impact of management decision to 

improving short-term profitability (at least that is the excuse managers give for not 

privileging job retention). 
102 

Employee owners will find it in their own interest to give their overseas subsidiaries 

and their supply chain’s employees the same deal that they get as far as employee 

ownership plus an equivalent standard of living. The same pay is not necessary, 

currency markets will adjust once worker standards of living rise. Attachment Three 

further discusses employee ownership. 

Over time, ownership will change the economies of the nations we trade with, as 

working in employee-owned companies will become the market preference and force 

other firms to adopt similar policies (in much the same way that, even without a 

tax benefit for purchasing stock, employee-owned companies that become more 

democratic or even more socialistic, will force all other employers to adopt similar 

measures to compete for the best workers and professionals). 

In the long run, trade will no longer be an issue. Internal company dynamics will 

replace the need for trade agreements as capitalists lose the ability to pit the interest of one nation’s workers against the others. This approach is also the most effective way to deal with the advance of robotics. If the workers own the robots, wages 

are swapped for profits with the profits going where they will enhance consumption 

without such devices as a guaranteed income. 

Attachment Two—Tax Reform, Center for Fiscal Equity, March 24, 2023 

Synergy: The President’s Budget for 2024 proposes a 25% minimum tax on high 

incomes. Because most high income households make their money on capital gains, 

rather than salaries, an asset value-added tax replacing capital gains taxes (both 

long and short term) would be set to that rate. The top rate for a subtraction VAT 

surtax on high incomes (wages, dividends and interest paid) would be set to 25%, 

as would the top rate for income surtaxes paid by very high-income earners. 

Surtaxes collected by businesses would begin for any individual payee receiving 

$75,000 from any source at a 6.25% rate and top out at 25% at all such income over 

$375,000. At $450,000, individuals would pay an additional 6.25% on the next 

$75,000 with brackets increasing until a top rate of 25% on income over $750,000. 

This structure assures that no one games the system by changing how income is 

earned to lower their tax burden. 

Individual payroll taxes. A floor of $20,000 would be instituted for paying these 

taxes, with a ceiling of $75,000. This lower ceiling reduces the amount of benefits 

received in retirement for higher income individuals. The logic of the $20,000 floor 

reflects full-time work at a $10 per hour minimum wage offered by the Republican 

caucus in response to proposals for a $15 wage. The majority needs to take the deal. 

Doing so in relation to a floor on contributions makes adopting the minimum wage 

germane in the Senate for purposes of Reconciliation. The rate would be set at 

6.25%. 

Employer payroll taxes. Unless taxes are diverted to a personal retirement account holding voting and preferred stock in the employer, the employer levy would 

be replaced by a goods and receipts tax of 6.25%. Every worker who meets a minimum hour threshold would be credited for having paid into the system, regardless 

of wage level. All employees would be credited on an equal dollar basis, rather than 

as a match to their individual payroll tax. The tax rate would be adjusted to assure 

adequacy of benefits for all program beneficiaries. 

High-income Surtaxes. As above, taxes would be collected on all individual income taxes from salaries, income and dividends, which exclude business taxes filed 

separately, starting at $400,00 per year. This tax will fund net interest on the debt 

(which will no longer be rolled over into new borrowing), redemption of the Social 

Security Trust Fund, strategic, sea and non-continental U.S. military deployments, 

veterans’ health benefits as the result of battlefield injuries, including mental health 

and addiction and eventual debt reduction. 

Asset Value-Added Tax (A–VAT). A replacement for capital gains taxes and the 

estate tax. It will apply to asset sales, exercised options, inherited and gifted assets 

and the profits from short sales. Tax payments for option exercises, IPOs, inherited, 

gifted and donated assets will be marked to market, with prior tax payments for 

that asset eliminated so that the seller gets no benefit from them. In this perspective, it is the owner’s increase in value that is taxed. As with any sale of liquid or 

real assets, sales to a qualified broad-based Employee Stock Ownership Plan will 

be tax-free. These taxes will fund the same spending items as high income and subtraction VAT surtaxes. There will be no requirement to hold assets for a year to 

use this rate. This also implies that this tax will be levied on all eligible transactions. 
103 

The 3.8% ACA–SM tax will be repealed as a separate tax, with health care funding 

coming through a subtraction value-added tax levied on all employment and other 

gross profit. The 25% rate is meant to be a permanent compromise, as above. Any 

changes to this rate would be used to adjust subtraction VAT surtax and high income surtax rates accordingly. This rate would be negotiated on a world-wide basis 

to prevent venue seeking for stock trading. 

Subtraction Value-Added Tax (S–VAT). Corporate income taxes and collection of 

business and farm income taxes will be replaced by this tax, which is an employer 

paid Net Business Receipts Tax. S–VAT is a vehicle for tax benefits, including 

• Health insurance or direct care, including veterans’ health care for nonbattlefield injuries and long-term care. 

• Employer paid educational costs in lieu of taxes are provided as either 

employee-directed contributions to the public or private unionized school of their 

choice or direct tuition payments for employee children or for workers (including 

ESL and remedial skills). Wages will be paid to students to meet opportunity 

costs. 

• Most importantly, a refundable child tax credit at median income levels (with 

inflation adjustments) distributed with pay. 

Subsistence-level benefits force the poor into servile labor. Wages and benefits must 

be high enough to provide justice and human dignity. This allows the ending of 

state administered subsidy programs and discourages abortions, and as such enactment must be scored as a must pass in voting rankings by pro-life organizations 

(and feminist organizations as well). To assure child subsidies are distributed, S– 

VAT will not be border adjustable. 

As above, S–VAT surtaxes are collected on all income distributed over $75,000, with 

a beginning rate of 6.25%. replace income tax levies collected on the first surtaxes 

in the same range. Some will use corporations to avoid these taxes, but that corporation would then pay all invoice and subtraction VAT payments (which would 

distribute tax benefits). Distributions from such corporations will be considered salary, not dividends. 

Invoice Value-Added Tax (I–VAT). Border-adjustable taxes will appear on purchase invoices. The rate varies according to what is being financed. If Medicare for 

All does not contain offsets for employers who fund their own medical personnel or 

for personal retirement accounts, both of which would otherwise be funded by an 

S–VAT, then they would be funded by the I–VAT to take advantage of border 

adjustability. 

I–VAT forces everyone, from the working poor to the beneficiaries of inherited 

wealth, to pay taxes and share in the cost of government. As part of enactment, 

gross wages will be reduced to take into account the shift to S–VAT and I–VAT, 

however net income will be increased by the same percentage as the I–VAT. Inherited assets will be taxed under A–VAT when sold. Any inherited cash, or funds borrowed against the value of shares, will face the I–VAT when sold or the A–VAT if 

invested. 

I–VAT will fund domestic discretionary spending, equal dollar employer OASI contributions, and non-nuclear, non-deployed military spending, possibly on a regional 

basis. Regional I–VAT would both require a constitutional amendment to change the 

requirement that all excises be national and to discourage unnecessary spending, especially when allocated for electoral reasons rather than program needs. The latter 

could also be funded by the asset VAT (decreasing the rate by from 19.25% to 13%). 

Carbon Added Tax (C–AT). A Carbon tax with receipt visibility, which allows 

comparison shopping based on carbon content, even if it means a more expensive 

item with lower carbon is purchased. C–AT would also replace fuel taxes. It will 

fund transportation costs, including mass transit, and research into alternative 

fuels. This tax would not be border adjustable unless it is in other nations, however 

in this case the imposition of this tax at the border will be noted, with the U.S. tax 

applied to the overseas base. 

Attachment Three—Debt Ownership as Class Warfare, February 16, 2022 

Visibility into how the national debt, held by both the public and the government 

at the household level, sheds light on why Social Security, rather than payments 

for interest on the debt, are a concern of so many sponsored advocacy institutions 

across the political spectrum. 
104 

Direct household attribution can be made by calculating direct bond holdings, income provided by Social Security payments and secondary financial instruments 

backed with debt assets for each income quintile. 

Responsibility to repay the debt is attributed based on personal income tax collection. Payroll taxes create an asset for the payer, so they are not included in the calculation of who owes the debt. Using 2019 tax data and the national debt as of COB 

February 15th, 2022. the ratio is $19 of debt owed for every dollar of income tax 

paid. Note well that the adjusted gross income of the bottom 80% is just over that 

garnered by the top 10%. 

The bottom 80% of taxpaying units hold few, if any, public debt assets in the form 

of Treasury Bonds or Securities or in accounts holding such assets and only take 

home one-third of adjusted gross income. Their main national debt assets are held 

on their behalf by the Government. They are owed more debt than they owe through 

taxes. The next 10% (the middle class), hold more in terms of long term investments 

and mutual fund and bond assets. They hold a bit under a fifth of social insurance 

assets. 

The top 10% pay more than half of income taxes (the dividing line is about 97.5%— 

and has been for a while). Asset shares within the top 10% are estimated using the 

same breakdown as the entire population, that is, the top 1% hold 54% of Federal 

Reserve and Long Term Investment Assets and 77% of mutual funds and bonds as 

held by the top 10%. A similar fraction is used to estimate holdings by the top 

0.01%—which is consistent to how much income they receive (note that I did not 

say earn). 

This illustration shows who benefits the most from having a national debt, therefore 

who has the most to lose through default. The relative shares of debt ownership, 

however, are current as reflected in the 2019 Federal Reserve Survey. 

CONSUMER TECHNOLOGY ASSOCIATION

1919 S. Eads St. 

Arlington, VA 22202 

703–907–7600 

https://www.cta.tech/ 

In response to the March 23 and March 24 congressional hearings on the 2023 U.S. 

Trade Policy Agenda, the Consumer Technology Association (CTA)® respectfully 

submits this statement for the record on increasing the positive impact and ambition of U.S. trade policy. 

CTA represents the $505 billion U.S. consumer technology industry, which supports 

more than 18 million U.S. jobs. Our industry appreciates the Office of the U.S. 

Trade Representative’s (USTR’s) efforts to strengthen U.S. trade relationships with 

allies and key trading partners, deploy U.S. trade policy as a tool for supporting 

Ukraine against Russia, establish a worker-centric trade policy, and address important U.S. objectives like eliminating forced labor from supply chains. around the 

world. 

The Biden-Harris Administration has created a solid foundation. However, it must 

adopt a more proactive and market-opening U.S. trade policy that strengthens U.S. 

ties with its allies. Ahead of Ambassador Tai’s testimony and responses to ques-
105 

1https://www.usitc.gov/publications/332/pub5405.pdf?source=govdelivery&utm_medium= 

email&utm_source=govdelivery. 

tions, CTA urges USTR to work with the Congress and U.S. stakeholders on 

prioritizing the negotiation of free trade agreements and opening new markets to 

U.S. technology goods and services through tariff elimination. 

CTA’s statement offers recommendations to the Congress and the Administration to 

support American businesses and workers and create durable, beneficial, and resilient economic and trade ties with its allies. They also call for an honest reckoning 

of current policy that has caused more harm than good (e.g., the section 301 tariffs 

on imports from China). 

1. CTA Recommendations on a better trade policy to support U.S. technology, trade, and economic leadership in the face of competition with 

China 

Our relationship with China is complex: China is our third-largest trading partner, 

our second-largest debt holder, and a key source of inputs for CTA members. More, 

China is also a world power with whom we must maintain peaceful relations and 

cooperate on global challenges like climate change. 

At the same time, China is our main economic rival and has vowed to overtake us 

as the world technology leader. They routinely ignore and exploit international trade 

norms. They engage in sophisticated efforts to steal US intellectual property and national security secrets. They are a potential military threat to the United States and 

neighboring economies like Taiwan, and they aggressively repress their own people 

and ethnic minorities. 

U.S. policies toward China should recognize this nuanced ‘‘competition’’ dynamic 

with China, and disincentive Chinese bad behavior without unduly harming our 

businesses, consumers, or U.S. innovation. Our policies should: 

• Strengthen the international rule of law and the multilateral trading system, 

including through modernization of the World Trade Organization (WTO); 

• Avoid tariffs on imported goods from China or other markets. As the U.S. International Trade Commission demonstrated in its March 2023 authoritative report,1 tariffs are taxes paid by Americans that drive inflation and harm US 

businesses, not China; 

• Promote trade agreements and economic cooperation between the U.S. and our 

allies and democratic societies. We should contain trade misbehavior by the 

Chinese Communist Party (CCP) and state-owned or controlled enterprises by 

leading and participating in regional trade agreements networks like the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP); 

• Ensure that any export and investment restrictions are narrowly tailored to address national security issues, and do not unduly impact commercial export opportunities for U.S. businesses; 

• Avoid sweeping product and company bans unless they are the final resort to 

address legitimate national security threats to U.S. businesses or consumers; 

• Ensure any import restrictions based on forced labor practices in China or other 

markets are clear, transparent, and enable compliance by law-abiding American 

businesses; 

• Support and adhere to the rulings of the WTO and other bodies that maintain 

international trade rules and norms; and 

• Prioritize robust and sustained consultations with stakeholders on all trade and 

investment initiatives, negotiations, and proposed measures, consistent with 

U.S. agency obligations under the Administrative Procedure Act as appropriate. 

2. CTA Recommendations on a better trade policy to support U.S. friends 

and allies 

Our planet’s history tells us that friendship among nations is to be cherished and 

nurtured. Too often countries have not served as good friends to others, particularly 

in the area of international trade, when we prioritize competition over friendship. 

In our view, we should view trade friendships as a means of protecting the future 

of our children and successive generations, who will inherit our planet and the 

promise of humanity. 
106 

We must act to ensure not only their economic health but their freedom and liberty. 

If free market liberty-loving countries increasingly isolate themselves from each 

other via trade barriers, we are hurting our ability to compete both economically 

and in innovation. Free trade among friends and allies is important as it greatly 

benefits each nation and gives us the best chance at staying ahead of authoritarian 

governments. 

With these perspectives in mind, CTA launched a new white paper at CES 2023: 

‘‘Top Ten Ways for Turning Trade Friends into Trade Best Friends Forever (Trade 

BFFs).’’ (Footnote: https://cdn.cta.tech/cta/media/media/advocacy/pdfs/ 

tradebff.pdf) 

We hope these ideas, which we excerpt from the white paper below, spark a necessary conversation among democratic and liberty-loving nations on leaving the selfserving measures of the 20th century behind and forging a stronger and like-minded 

free trade future for our children and successive generations. And we welcome ideas 

from the Administration, the Congress, and our friends and allies on what it takes 

to be a ‘‘Trade BFF’’ in our era of fierce global competition. 

Trade BFFs should: 

1. Honor their commitments to each other. Friendships are built on trust, 

which means Trade BFFs should bind and enforce their commitments to each 

other (trade pinky promises) through comprehensive, binding, and enforceable 

free trade agreements (trade friendship bracelets). 

2. Have each other’s backs. You look out for someone by helping them—not 

putting up barriers to their success. True friendships embody selflessness— 

not selfishness. For example, they should promise to spare their Trade BFFs 

from disruptive and harmful unilateral enforcement actions, including tariffs 

and import prohibitions. 

3. Work together. Friends make each other better and push each other to live 

up to or surpass expectations. One way to do that is to collaborate on 

strengthening the World Trade Organization and on multilateral and regional 

trade and investment efforts. 

4. Share common values—and stick to them. We value freedom, democracy, 

and the power of the free market. We can maintain and promote market 

economies by avoiding policies that intentionally displace or injure foreign 

competitors and making any incentives available to their domestic industries 

also available to industries in their Trade BFFs. 

5. Compete hard—but fairly. Trade BFFs develop and implement regulations 

that allow companies located in their fellow Trade BFFs to compete fairly on 

a level playing field while encouraging a race to the top through high performance. 

6. Be empathetic and open to mutual, voluntary support. Trade BFFs take 

measures to encourage but not coerce industries located in their fellow Trade 

BFFs to trade with or invest in their economies. 

7. Invest in and support each other’s successes. If one friend is an expert 

or good at something, they use that skill or expertise to help their friends. 

Trade BFFs invest in and support each other’s successes, avoiding irritating 

and disruptive investment reviews or other restrictions on investment. 

8. Share openly with each other. Trade BFFs take steps to allow data to flow 

freely across borders. They prioritize transparency and participation by interested persons in policymaking, including in their fellow Trade BFFs. 

9. Join forces to fight for their shared futures. All countries sharing the 

values of democracy and liberty should work together and rip out trade barriers among like-minded friends. They can work together to confront trade 

bullies and provide more market access to each other in the face of bullying. 

They avoid policies that bully their fellow Trade BFFs. 

10. Communicate with each other clearly and often. One key to any friendship is an open and honest level of communication. For example, Trade BFFs 

talk to each other regularly about issues like IP protection and enforcement 

and new trade rules that benefit our people and planet. They avoid unilateral 

measures, which can have unintended consequences on their friendships, companies, workers, and people. 
107 

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3. CTA Recommendations on the Section 301 Tariffs on Imports from China 

On January 17, 2023, CTA submitted comprehensive comments to USTR 2 in response to its request for stakeholder input under the statutorily mandated ‘‘necessity review’’ at the 4-year anniversary of the imposition of the Section 301 tariffs 

on imports from China. CTA’s comments offered significant input on the negative 

economic impact of the tariffs, their ineffectiveness in meeting their stated and 

unstated objectives, and the possible alternatives to the tariffs that together or individually may be more effective in meeting those objectives. 

In summary, CTA respectfully requested that USTR fully remove the HTS codes for 

consumer technology products and inputs in Annexes 1, 2, and 4 to this submission 

from Lists 1, 2, 3, and 4A. We urge USTR to avoid imposing tariffs on the HTS 

codes in Annexes 3 and 4 that are included on List 4B and on any consumer technology product or input not yet included on a Section 301 tariff list. Finally, CTA 

encouraged USTR complete the necessity review as quickly as possible and advocates for the initiation of comprehensive, transparent, and fair exclusions process 

with due process until the tariffs are removed. 

Additionally, CTA made the following key points in its comment: 

• The tariff actions are not now, and will never be, an effective tool for achieving 

the objectives of Section 301 to eliminate China’s problematic acts, policies and 

practices. 

• The tariff actions adversely affect the U.S. economy, including consumers. 

• The tariff actions make the U.S. technology sector, and particularly the thousands of startups and small businesses in the sector, less competitive at home 

and abroad. 

• It is counterproductive and inconsistent with other policies to maintain increased duty rates on consumer technology products and inputs. 

• It is paramount that USTR permanently remove consumer technology products 

and inputs from the Section 301 actions and not target them or use them as 

pawns in future actions. 

• Other actions would be more effective in addressing China’s problematic acts, 

policies, and practices. 

• USTR must be consistent in its policymaking and abide by its statutory procedural and transparency obligations during this review and any future use of its 

Section 301 authority. 

Conclusion 

CTA greatly appreciates the opportunity to submit these comments for the record. 

We look forward to continuing to work with the House Ways and Means and Senate 

Finance Committees and with the Administration to fight inflation, strengthen U.S. 

trade and economic ties with allies by opening new markets and negotiating high 

standard, binding and enforceable trade rules, and bolstering U.S. technology leadership and the innovation economy. 

ENGINE ADVOCACY

700 Pennsylvania Ave., SE 

Washington, DC 20003 

April 6, 2023 

U.S. Senate 

Committee on Finance 

Dirksen Senate Office Bldg. Rm. SD–219 

Washington, DC 20510–6200 

Dear Chairman Wyden, Ranking Member Crapo, and Honorable Members of the 

Committee on Finance: 

Engine is a non-profit technology policy, research, and advocacy organization that 

bridges the gap between policymakers and startups. Engine works with government 

and a community of thousands of high-technology, growth-oriented startups across 

the nation to support the development of technology entrepreneurship. Lowering 

barriers to trade unlocks markets for U.S. startups to expand, compete, and find 

success and is a vital part of promoting domestic technology entrepreneurship. Ac-
108 

1See, e.g., Table 3.1. U.S. Trade in ICT and Potentially ICT-Enabled Services, by Type of 

Service, Bureau of Economic Analysis (July 7, 2022), https://apps.bea.gov/iTable/iTable.cfm? 

reqid=62&step=9&isuri=1&6210=4#reqid=62&step=9&isuri=1&6210=4. 2See e.g., Comments of Engine Advocacy Regarding Foreign Trade Barriers to U.S. Exports 

for 2023 Reporting, Engine (October 28, 2022), https://engine.is/s/2022-Transatlantic-BusinessStatement-on-EU-US-Data-Privacy-Framework.pdf. 3See e.g., Hearing on The President’s 2023 Trade Policy Agenda: Hearing Before the Senate 

Committee on Finance, 118th Congress (2023) (Remarks of Senator Warren); Hearing on Opportunities and Challenges for Trade Policy in the Digital Economy: Hearing Before the Senate 

Subcommittee on International Trade, Customs, and Global Competitiveness, 117th Congress 

(2022) (remarks of Senator Warren); Cristiano Lima, Advocates urge U.S. not to offer ‘Big-Techfavored terms’ in trade talks, Washington Post (March 15, 2023), https://www.washington 

post.com/politics/2023/03/15/advocates-urge-us-not-offer-big-tech-favored-terms-trade-talks/; 

Webinar: Big Tech’s Ploy to Undermine AI Accountability, Privacy and Anti-Monopoly Policies 

with Senator Warren, Representative Schakowsky, and Representative Takano, Rethink Trade 

(March 16, 2023), https://rethinktrade.org/videos/webinar-big-techs-ploy-to-undermine-ai-accountability-privacy-and-anti-monopoly-policies-with-sen-warren-rep-schakowsky-and-reptakano/. 4See e.g., Sean Davis, New Transatlantic Data Deal Can Reopen EU Opportunities for 

Startups, Engine (April 20, 2022), https://engineadvocacyfoundation.medium.com/new-transatlantic-data-deal-can-reopen-eu-opportunities-for-startups-4a25e454572f; #StartupsEverywhere 

profile: Mikel Carmenes Cavia, Co-Founder and VP of Engineering, Onfleet, Engine (May 7, 

2021), https://www.engine.is/news/startupseverywhere-sanfrancisco-ca-onfleet. 5See generally Privacy Shield Participants, https://www.privacyshield.gov/list. 6Lauren Koop, The EU’s Digital Services Act is one step closer to becoming law. How will 

it impact U.S. startups?, Engine (July 28, 2022), https://engineadvocacyfoundation.medium. 

com/the-eus-digital-services-act-is-one-step-closer-to-becoming-law-how-will-it-impact-u-s-startups 

-7be702180582; Daphne Keller, The EU’s new Digital Services Act and the Rest of the World, 

Verfassungsblog (November 7, 2022), https://verfassungsblog.de/dsa-rest-of-world/ (Explaining 

the comparative impacts of the DSA on small entities: ‘‘The other predictable global harm will 

be to competition. The DSA burdens even very small platforms with obligations that today’s incumbents never shouldered, or else took on only much later in their development. Facebook, for 

example, first released a transparency report in 2013, when it was worth $139 billion. It first 

allowed users to appeal removals of photos, videos, and posts (but not comments) in 2018, when 

the company was worth $374 billion and had some 35,000 employees. Newer market entrants 

cordingly, we appreciate the Committee holding a hearing to examine the President’s Trade Agenda. 

The Internet and digitization of world economies has enabled startups to reach markets beyond their borders. Through digital trade, startups are able to further the 

outsized contributions they make to domestic economic growth and job creation. And 

startups help others reach markets abroad too, whether they be artists, farmers, 

manufacturers, or others. As digital trade has grown,1 barriers to digital trade have 

grown along with it. Startups encounter these barriers as they grow and scale beyond U.S. borders to serve users and clients abroad, and such barriers dictate where 

startups can feasibly reach users.2 Startups accordingly need policymakers to pursue smart digital trade policies to lower barriers to entry, facilitate cross-border 

transfers of data, and promote uniform regulatory environments across jurisdictions. 

Policymakers on the Committee and at the Office of the U.S. Trade Representative 

must recognize and harness the benefits of smart digital trade policies that enable 

startups to succeed by ensuring these provisions are included in current negotiations. Unfortunately, digital trade policies that lower trade barriers for U.S. businesses appear to be facing increasing skepticism from U.S. policymakers and others 

that claim forward-thinking digital trade policies only serve large incumbent companies.3 Reducing barriers to digital trade helps all U.S. businesses, including ‘‘big 

tech,’’ but it arguably stands to help startups the most. 

Take, for instance, the invalidation of Privacy Shield in 2020, which created barriers 

to cross-border data transfers between the U.S. and Europe. This impacted all 

transatlantic businesses, but large companies were able to turn to other methods 

for transferring data, like Standard Contractual Clauses, while startups faced more 

existential business disruptions, increased costs, and lost clients.4 Indeed, small 

businesses and startups comprised the overwhelming majority of companies that relied on free flows of data through Privacy Shield.5

Similarly, the EU’s Digital Services Act will impact all content-hosting companies 

operating or looking to operate in Europe. Large U.S. technology companies will face 

significant new obligations under the law, but none of them are likely to exit the 

EU market or significantly revise plans to operate there. U.S. startups on the other 

hand will encounter elevated barriers to entering the EU market, significant new 

obligations, and compliance costs.6
109 

will take on similar obligations at a much earlier stage: once they reach just Ö10 million and 

fifty employees.’’). 7See, e.g., Fact Sheet: President Biden Signs Executive Order to Implement the European 

Union-U.S. Data Privacy Framework, White House (October 7, 2022), https://www.whitehouse 

.gov/briefing-room/statements-releases/2022/10/07/fact-sheet-president-biden-signs-executiveorder-to-implement-the-european-union-u-s-data-privacy-framework/ (on resolving transatlantic 

data transfer issues); Chamber of Progress (@ProgressChamber), Twitter (December 8, 2021) 

(Remarks of Secretary Raimondo on the DSA: ‘‘We have serious concerns that these proposals 

will disproportionately impact U.S.-based tech firms and their ability to adequately serve EU 

customers and uphold security and privacy standards.’’). 8See, e.g., Tools to Compete: Lower Costs, More Resources, and the Symbiosis of the Tech Ecosystem, Engine and CCIA Research Center (January 2023), https://static1.squarespace.com/ 

static/571681753c44d835a440c8b5/t/63d2b8d5bec96f502264fd1f/1674754266044/FINAL_CCIA 

-Engine_Tools-To-Compete.pdf. 

In each of these examples, U.S. policymakers have intervened to try to reach solutions with their EU counterparts.7 This work advances the interests of U.S. startups 

and should not be foregone merely because it also helps or is supported by ‘‘big 

tech.’’ Likewise, trade frameworks that are currently being pursued and negotiated 

must advance the interests of U.S. startups, including through strong digital trade 

provisions. 

Smart digital trade policy that promotes a free, open, and global Internet is needed 

to lower and keep low barriers to trade for startups. The recent U.S.-Mexico-Canada 

and U.S.-Japan Agreements enshrined commonsense digital frameworks and provide a template for smart digital trade policy that should be built upon in future 

trade negotiations, including the Indo-Pacific Economic Framework, for example. Inspired by these agreements, digital trade policy should embrace the following principles, which can support the success of U.S. startups looking to expand into foreign 

markets and engage customers abroad: 

Facilitate cross-border data flows. 

The Internet is inherently borderless and allows startups to reach foreign markets with little additional investment. Conversely, policies that restrict how and 

when data can be transferred across borders erect barriers to trade and increase 

costs that startups with limited resources have difficulty overcoming compared 

to their larger rivals. 

Provide proportionate, tailored, and certain intermediary liability frameworks. 

Balanced intermediary liability frameworks, like those found in the U.S. law 

(i.e., 47 U.S.C. § 230 and 17 U.S.C. § 512), provide the legal certainty needed for 

startups with business models that rely on user content—whether it’s comments, photos, reviews, etc.—to grow and thrive. Around the world, however, 

common methods for governing intermediaries are taking root that undermine 

a startup-friendly environment and create new uncertainties and costs for U.S. 

companies. Laws that subject startups to the same standards as their much 

larger competitors, require the appointment of local representatives, impose 

tight content takedown timelines, require automated filtering, require the removal of content that is not otherwise illegal, and threaten heavy fines create 

barriers to entry for startups and reduce the number of foreign markets reasonably available to them. 

Foster innovation and regulatory consistency. 

Extraterritorial regulations adopted in other jurisdictions, including around 

data privacy and emerging technologies, can limit innovation opportunities and 

market access for American startups. Because they often apply any time a business encounters a user in or from that jurisdiction, startups with relatively few 

users there are likely to forgo serving that jurisdiction because of the regulatory 

structure. U.S. policymakers should work through the appropriate fora to ensure American startups encounter a consistent and level playing field. 

Avoid technology sector-specific levies. 

While startups are rarely subject to digital services taxes (DSTs) themselves, 

they rely on the services of larger companies who are, to build their products 

and reach customers.8 DSTs increase the price of these services, putting 

startups at a disadvantage in jurisdictions with them. Working through multinational fora to reach a global solution promises the best step toward a uniform 
110 

9See, e.g., Jennifer Weinhart, Global tax deal continues to face hurdles, Engine (May 24, 

2022), https://engineadvocacyfoundation.medium.com/global-tax-deal-continues-to-face-hurdlescbe2ddf71cd1. 10See, e.g., Statement for the Record of PILOT Inc. regarding hearing on Opportunities and 

Challenges for Trade Policy in the Digital Economy held November 30, 2022, PILOT, Inc. (December 14, 2022), https://static1.squarespace.com/static/571681753c44d835a440c8b5/t/639b26 

7a1041a9585ced9704/1671112314829/Statement+for+the+record+-+Ben+Brooks%2C+PILOT. 

pdf. 

tax environment, and Congress must do its part to advance the solutions arising 

from these negotiations.9

Prohibit duties on digital transactions. 

The WTO moratorium on e-commerce is critical to fostering digital trade, and 

it is especially important for startups. Since 1998, member countries have 

agreed to not impose customs duties on electronic transmissions, but some countries have recently expressed interest in limiting or ending the moratorium. 

As U.S. startups have previously told Congress,10 smart digital trade policies are 

‘‘critical to bolster the global competitiveness of U.S. startups,’’ are necessary ‘‘to 

‘unlock’ America’s renowned startup ecosystem,’’ and will further ‘‘the deployment 

of software and services around the world.’’ U.S. trade policymakers must heed the 

advice of startups and pursue strong digital trade provisions in current and future 

negotiations and defend the ability of U.S. startups to provide their services to end 

users around the globe. 

Engine appreciates the opportunity to submit this statement for the hearing record 

and the Committee’s attention to digital trade issues important to startups. We look 

forward to being a resource for the committee on these and other issues in the future. 

Sincerely, 

Engine 

FLEXIBLE PACKAGING ASSOCIATION

185 Admiral Cochrane Drive, Suite 105 

Annapolis, MD 21401 

Tel (410) 694–0800 

Fax (410) 694–0900 

www.flexpack.org 

Statement of Alison Keane, Esq., IOM, CAE, President and CEO 

My name is Alison Keane, and I am the President and CEO of the Flexible Packaging Association (FPA). FPA, which is the voice of U.S. manufacturers of flexible 

packaging and their suppliers, continues to be troubled by the President’s Trade 

Policy, specifically with regard to aluminum foil tariffs. 

At a time when sterile packaging for food, health and hygiene, and medical equipment is more important than ever, and as U.S. manufacturers are continuing to suffer from the worst economy in decades, the Administration should be looking at 

ways to alleviate supply chain burdens, not increase them. The flexible packaging 

industry is once again unfairly targeted with unwarranted trade actions on aluminum foil that not only threatens food, pharmaceutical, and medical security in the 

U.S.; but will also negatively impact domestic jobs and increase prices during a time 

of unprecedented inflation. A ‘‘self-initiated’’ case by the Department of Commerce 

(DOC) against suppliers of aluminum foil from South Korea and Thailand threatens 

manufacturers of flexible packaging with unwarranted duties on necessary aluminum foil for food, pharmaceuticals, and medical device packaging. On March 16, 

2023, The U.S. Department of Commerce issued a preliminarily determination that 

imports of aluminum foil from South Korea and Thailand, using inputs manufactured in China, are circumventing the antidumping duty (AD) and countervailing 

duty (CVD) orders on aluminum foil from China. 

Flexible packaging represents $39 billion in annual sales in the U.S. and is the second largest and one of the fastest growing segments of the packaging industry. The 

industry employs approximately 85,000 workers in the United States and is deemed 

an Essential Critical Infrastructure Workforce by the Department of Homeland Security. Flexible packaging is produced from paper, plastic, film, aluminum foil, or 

any combination of these materials, and includes bags, pouches, labels, liners, 

wraps, rollstock, and other flexible products. Concerning the tariff impacts, alu-
111 

minum foil is used for packaging as it provides the barrier protection needed from 

oxygen, light, moisture, and bacteria that food, health and hygiene, and medical 

supplies need to ensure stable shelf life, freshness, and sterility. 

Additional duties are not appropriate as the thin gauge foil used in these applications cannot be supplied by U.S. manufacturers. In 2017, the U.S. Governmentimposed duties on aluminum products coming from China, including aluminum foil. 

In 2018, yet another administrative action was taken under Section 232 of the 

Trade Expansion Act and additional worldwide tariffs were imposed on aluminum 

products, including foil. Now, the DOC’s preliminary determination of additional 

fees on imports of aluminum foil from S. Korea and Thailand is even more destructive, as the foil targeted by these duties and tariffs is not manufactured in the U.S. 

in the quantities needed, and flexible packaging manufacturers have no choice but 

to import it. In fact, the DOC already stipulated this truth by granting hundreds 

of exemptions to these manufacturers from the Section 232 tariffs. 

The Section 232 investigation on aluminum, which resulted in the 10% tariff on aluminum, including foils produced from that aluminum, was initiated under the Trade 

Expansion Act of 1962, and was to determine what, if any, effects imports of aluminum have on national security. FPA is not aware of any impacts aluminum foil 

imports for use in the packaging industry has on U.S. national security and the Department of Commerce Report entitled ‘‘Effects of Aluminum Imports on the National Security,’’ (report) did not specify any. Nevertheless, the tariffs were imposed 

and these import restrictions have had a significant negative impact on the flexible 

packaging industry and its employment in the U.S. 

While FPA supported the adoption of exclusions from the tariffs where aluminum 

articles are not produced in the U.S. ‘‘in a sufficient and reasonably available 

amount or of satisfactory quality,’’ the process for exclusions is arduous and slow, 

and in some cases, results in conflicting approvals and denials. Additionally, manufacturers must apply for the exclusion annually, regardless of whether or not there 

has been a change in circumstances. In the case of fine gauge aluminum foil used 

by flexible packaging manufacturers, the domestic supply of the product has only 

gotten scarcer. Despite the Section 232 tariffs, as well as the significant Anti-dumping and Countervailing (AD/CVD) duties placed on Chinese aluminum foil imports, 

one of the only companies in the U.S. supplying light gauge foil chose to close its 

doors. 

As FPA stated in numerous letters and in its testimony to the Department, there 

was never sufficient supply in the U.S. of aluminum foil for flexible packaging to 

begin with, which is why imports were necessary. Instead of production moving back 

to the U.S., it simply moved out of China to other parts of the world. Flexible packaging manufacturers have in some cases moved away from foil, substituting nonfoil barrier structures, which also does nothing to assist the aluminum industry in 

the United States. Given that there is not enough supply or quality of the foil to 

meet flexible packaging manufacturers need in the U.S. As a result, the exclusionary process is the only avenue with which to secure aluminum foil for the packaging that requires its use, especially at this time of national emergency when the 

public’s health and safety are more important than ever. 

Aluminum foil is critical to the flexible packaging industry, as it creates the ideal 

barrier to bacteria, odor, sunlight, and contamination and is essential to protect the 

domestic food, health, and medical product supply. Many of these products are ones 

that consumers use or purchase every day, whether in grocery stores, pet stores, retail stores, or restaurants, but also found in doctors’ offices, hospitals, pharmacies, 

and universities. 

Additional duties on aluminum foil will negatively impact consumers and the economy by: 

• Threatening Food and Medical Product Security: When it comes to packaging for medical devices, food, and healthcare, sterility is critical—literally a 

matter of life and death. There is no ideal substitution for the barrier protection 

aluminum foil provides. Additional costs on these goods will increase supply 

chain disruptions and could result in a scarcity of these products. 

• Negatively Impacting the U.S. Domestic Jobs: Many U.S. converting jobs 

have already gone offshore with the imposition of the Chinese and Section 232 

duties and tariffs. If additional fees are imposed on foil from S. Korea and Thailand, more jobs and manufacturing will move out of the U.S. as foreign suppliers of finished goods do not have to pay the tariffs. 
112 

• Increasing Prices During a Time of Unprecedented Inflation: The loss of 

jobs to the American economy will not be the only negative consequence; the 

costs of goods and the increase in prices for consumers for products used daily, 

during this time of unprecedented inflation will be damaging. Products include 

food and beverage applications such as yogurt, ingredients, juices, pet food, and 

candy; health applications, such as over the counter drugs and nutraceuticals 

and COVID–19 testing kits; and medical device packaging, such as absorbable 

sutures and surgery kits. 

The Flexible Packaging Association (FPA) and its members support efforts to protect 

domestic manufacturing and ensure national security. As such, the Administration 

should not continue to unfairly target domestic flexible packaging manufacturers. 

Imposing new duties on imports of aluminum foil is simply not the answer. Everybody loses in unfair trade cases, especially the American consumer. Just as in the 

initial Chinese foil case, new duties and costs to domestic flexible packaging manufacturers are not going to result in any benefit to domestic aluminum foil producers. 

However, the consequences will be huge for food and medical product insecurity, 

loss of jobs, and ever-increasing prices on the goods consumers use every day. 

NATIONAL FOREIGN TRADE COUNCIL

1225 New York Ave., NW, Suite 650B 

Washington, DC 20005 

Phone: 202–887–0278 

Fax: 202–452–8160 

https://www.nftc.org/ 

U.S. Senate 

Committee on Finance 

INTRODUCTION 

The National Foreign Trade Council (‘‘NFTC’’) is pleased to provide the statement 

below on behalf of the Tariff Reform Coalition as part of the Senate Finance Committee hearing record for its hearing on the President’s 2023 Trade Agenda. 

About the Tariff Reform Coalition 

The Tariff Reform Coalition (‘‘the Coalition’’) is a broad-based coalition of more than 

100 companies and associations, (whose member companies number at 1,000+) led 

by NFTC, which is dedicated to working with the Administration and Congress to 

ensure greater oversight and review of the Executive Branch’s use of tariff authority. The Coalition brings together a broad array, large and small, of U.S. manufacturers, retailers, agricultural and food producers, and other supply chain stakeholders who have been adversely affected by the increasing use of tariffs in pursuit 

of various policy objectives. We welcome the opportunity to provide input on the impacts caused by the tariffs imposed under section 232 of the Trade Expansion Act 

of 1962 (19 U.S.C. 1862) (‘‘Section 232 tariffs’’) and section 301 of the Trade Act of 

1974 (19 U.S.C. 2411 et seq.) (‘‘Section 301 tariffs’’). 

About NFTC 

NFTC is a broad-based business association for leadership, expertise, and influence 

on international tax and trade policy issues. We believe trade and tax policies 

should foster fair access to the opportunities of the global economy and advance 

global commerce for good. 

SECTION 232 AND 301 TARIFFS HARM U.S. CONSUMERS AND PRODUCERS, ARE INEFFECTIVE AND SHOULD BE ELIMINATED 

A. Section 232 and 301 Tariffs Raise Prices 

Since March 23, 2018, additional tariffs of 25% and 10% have been imposed on certain imports of steel and aluminum, respectively under Section 232, which allows 

the President to take actions to adjust imports of goods if the Department of Commerce (‘‘Commerce’’) finds that imports threaten U.S. national security. 

Beginning in July of 2018, the prior Administration imposed tariffs in tranches on 

a series of Chinese-origin goods under Section 301, ranging from 7.5% (List 4a) up 

to 25% (Lists 1, 2, and 3). Section 301 authorizes the President to impose tariffs 

or take other trade actions when the United States Trade Representative (‘‘USTR’’) 

finds that a trade partner is engaging in unfair trade practices. In this case, USTR 

found that China had been engaging in industrial policy which has resulted in the 
113 

1Press Release, Statement By U.S. Trade Representative Robert Lighthizer on Section 301 Action, July 10, 2018, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/ 

july/statement-us-trade-representative. 2 U.S. Customs and Border Protection, Trade Statistics, https://www.cbp.gov/newsroom/ 

stats/trade, Trade Remedy Enforcement. 3Swayne, Matthew, ‘‘Cancer costs U.S. more than $156 billion, with drugs a leading expense,’’ 

Penn State College of Medicine (October 6, 2021), https://www.psu.edu/news/research/story/ 

cancer-costs-us-more-156-billion-drugs-leading-expense/. 4https://datalab.usaspending.gov/americas-finance-guide/spending/categories/. 

5https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal). 6Forbes, The Real-Time Billionaires List, https://www.forbes.com/real-time-billionaires/ 

#7a3171783d78. 7Tom Lee and Jacqueline Varas, ‘‘The Total Cost of US Tariffs,’’ American Action Forum (May 

10, 2022) (‘‘AAF’’), https://www.americanactionforum.org/research/the-total-cost-of-tariffs/. 8 U.S. International Trade Commission, ‘‘Certain Effects of Section 232 and 301 Tariffs Reduced Imports and Increased Prices and Production in Many U.S. Industries,’’ Inv. 332–591, 

Press Release (March 15, 2023), https://usitc.gov/press_room/news_release/2023/ 

er0315_63679.htm (ITC 232–301 Investigation). 9Michael Shultz, et al. ‘‘U.S. Consumer and Economic Impacts of US Automotive Trade Policies.’’ Center for Automotive Research, February 2019, https://www.cargroup.org/publication/ 

trade-briefing-u-s-consumer-economic-impacts-of-u-s-automotive-trade-policies/?gclid=CjwKCAjw 

o_KXBhAaEiwA2RZ8hHoDteEBuInJuS1-rbqIrMi2EJ20IYXhNpOLwNPHNKJVhiOdmHswHRo 

CnDIQAvD_BwE. 

transfer and theft of intellectual property and technology to the detriment of the 

U.S. economy.1

Between March 23, 2018, and March 8, 2023, U.S. Customs and Border Protection 

(‘‘CBP) collected over $188 billion in duties assessed under Sections 232 and 301.2

Category Amount 

Aluminum 232 $3.62 billion 

Steel 232 $12.05 billion 

China 301 $173.07 billion 

Total $188.74 billion 

By way of comparison, the combined tariff cost imposed under Sections 232 and 301 

exceeds: 

• The annual cost of care for the 15 most prevalent types of cancer in the U.S. 

($156.2 billion);3

• Total U.S. Federal spending on transportation in 2021 ($154.8 billion);4

• The annual gross domestic product of Morocco ($133 billion);5 and 

• The net worth of Bill Gates ($115.1 billion).6

According to one estimate, the combined cost of the 232 and 301 tariffs amounts to 

an estimated $50 billion additional tax on U.S. consumers each year.7 A recent 

study of the economic impacts of the 232 and 301 tariffs by the U.S. International 

Trade Commission (USITC) found that U.S. importers bore nearly the full cost of 

these tariffs because import prices increased at the same rate as the tariffs. The 

USITC estimated that prices increased by about 1 percent for each 1 percent increase in the tariffs under Sections 232 and 301.8

The Section 232 and Section 301 tariffs have also impacted key U.S. industry sectors: 

• The American beverage industry has paid nearly $1.9 billion in Section 232 aluminum tariffs since 2018; 

• U.S. consumer technology companies paid approximately $43 billion in Section 

301 tariffs between June 2018 and November 2022; 

• Ford and General Motors disclosed that the 232 tariffs in just the first year 

they were in effect cost each company an estimated $1 billion (or $700 for each 

vehicle produced in North America);9

• U.S. chemical manufacturers paid $8.5 billion in Section 301 tariffs between 

June 2018 and December 2021; and 
114 

10Lance Lambert, ‘‘Steel prices are up 200%. When will the bubble pop?’’, Fortune (July 8, 

2021), https://fortune.com/2021/07/08/steel-prices-2021-going-up-bubble/. 11 ITC 232–301 Investigation, Press Release. 

• U.S. apparel and related goods manufacturers paid $5 billion in Section 301 tariffs between 2019 and April 2022. 

The Section 232 and Section 301 tariffs have distorted the market for products subject to the tariffs and increased the price of goods for consumers in the U.S. The 

price effect arises in part from the cost of duties themselves, which, as the data 

above shows, is significant. But prices of goods produced in the U.S. and third markets have risen as well. 

Coalition members report record-high steel prices that have more than doubled 

since 2018 when the Section 232 tariffs were imposed.10 Indeed, the 232 tariffs have 

even generated price effects for domestic steel as the protection afforded by the 25% 

tariff has allowed U.S. steel producers to increase prices well above those found in 

other markets. Manufacturers in some industries report that prices are increasing 

at such substantial rates they must purchase steel based on the price at delivery, 

not the price available at purchase. 

In addition, the 232 tariffs have artificially increased the price of all aluminum sold 

in the U.S. market because of the unique way in which aluminum prices are set. 

Aluminum contracts are priced based on a benchmark known as the ‘‘Midwest Premium’’ price. Since the 232 duties on aluminum were put in place, the Midwest Premium price has been set as a ‘‘duty paid’’ price. That means all aluminum contracts 

in the U.S. are priced assuming the 232 duty applies—even if the imported material 

was covered by an exclusion or tariff rate quota (‘‘TRQ’’). The duty paid Midwest 

Premium price also applies even when a substantial portion of the aluminum product was sourced from scrap or recycled material. 

It is also worth noting there have been price effects (e.g., pass-through of higher material costs to intermediate users (e.g., auto, beverage, and appliance manufacturers, 

etc.) and higher costs for consumers) from the 232 duties even for imports from 

countries no longer subject to the tariffs. 

Price increases have also affected goods subject to Section 301 tariffs. While harder 

to quantify, companies have reported cost increases even when they have relocated 

production outside of China. Shifting production to new suppliers is often affected 

by reduced economies of scale, higher qualification and conformity assessment costs, 

duplicate tooling costs, production capacity limitations, and additional logistics 

costs, all of which increase prices to consumers. 

In sum, prices have risen across the board in response to the 232 and 301 duties 

and those price increases are causing significant, negative effects felt by many Coalition members and U.S. consumers. 

B. Price Increases Harm U.S. Manufacturing Competitiveness 

The price increases associated with the 232 and 301 tariffs are making U.S.- 

produced goods less competitive than products from other markets. Manufacturers 

outside the U.S. can source primary steel and aluminum products at prices set on 

the global market, which (as explained above) are much more favorable than those 

available in the U.S. Compounding this competitive disadvantage is the fact that 

232 tariffs do not apply to imported downstream products. That leaves U.S. manufacturers of a wide range of metal products doubly exposed to competitive disadvantage: their raw material prices are higher and foreign-made end products can be 

sold in the U.S. without any impact from the 232 tariffs. Indeed, the ITC 232–301 

Investigation confirmed that the Section 232 duties ‘‘reduced production in downstream industries in the United States that use steel and aluminum products as inputs because of increased prices.’’11

Several Coalition members noted lost sales to producers in third markets because 

of higher materials costs in the U.S. and that once customers have qualified suppliers outside the U.S. they rarely come back. Another member stated that the Section 301 tariffs are encouraging U.S. manufacturers in their sector to move production to third countries where they can purchase Chinese inputs at a lower cost and 

sell the final, assembled products and more value-added inputs back into the United 

States. 

By imposing additional costs on U.S. manufacturers, the 232 and 301 tariffs are distorting the market and picking winners and losers. While primary metals producers 

may be enjoying higher prices under the 232 tariffs, it is coming at the expense of 
115 

12 ‘‘Steel Profits Gain, But Steel Users Pay, Under Trump’s Protectionism,’’ Peterson Institute 

for International Economics, December 2018, https://www.piie.com/blogs/trade-and-investmentpolicy-watch/steel-profits-gain-steel-users-pay-under-trumps#:∼:text=Steel%20Profits%20Gain%2C 

%20but%20Steel%20Users%20Pay%2C%20under%20Trump’s%20Protectionism,-Gary%20Clyde% 

20Hufbauer&text=At%20the%20center%20of%20President,on%20nearly%20all%20steel%20im 

ports (‘‘PIIE Report’’). 

downstream industries. According to one study, for each new steel producer job, 

steel firms earned $270,000 of additional pre-tax profits but steel users paid an 

extra $650,000 for each job created.12

C. Other Economic Impacts of the 232 and 301 Tariffs 

In addition to price increases and competitiveness challenges, the 232 and 301 tariffs have had a range of other impacts that adversely affect Coalition members. 

Availability: Among the most frequent concerns raised is the impact 232 tariffs 

have had on the availability of products subject to the tariffs. For purposes of obtaining an exclusion from the 232 duties, the Commerce Department defines a steel 

or aluminum product as ‘‘reasonably available’’ if a domestic producer can deliver 

the product within 8 weeks. However, current delivery time quotes for many steel 

materials are 16–20 weeks with some products not promised for delivery until 2023. 

Moreover, steel is not a monolithic market and for every type of steel in the market, 

there is a different profile of global production and a different level of capacity globally and within the U.S. As a result, the availability of products varies widely across 

different product lines. 

For certain types of products, such as food-grade stainless steel, the lack of availability has been particularly acute. As demand for steel and aluminum grows, at 

least one Coalition member is predicting that it will become much more difficult to 

obtain specialty steel products as U.S. mills and service centers focus on supplying 

significant quantities of non-specialty steel to larger industry sectors like the automotive and aerospace industries. 

Finding available supply is particularly difficult for small, family-owned businesses, 

which report that domestic steel suppliers often are unwilling to quote or fulfill orders because they do not meet minimum order requirements. Small companies—particularly those in underserved areas—are less able to hold significant quantities of 

material in inventory and do not have the resources to invest extensive time and 

money required to find suppliers who will fulfill their orders. In many instances, domestic producers have told Commerce they are capable of producing a particular 

product when opposing an exclusion request only to refuse to sell the material in 

a small quantity when it is subsequently requested. 

Alternative Sourcing: Changing suppliers when materials are not available is not 

as easy as it may seem. The process for changing raw material suppliers varies depending on the type of product and end use. In the Section 232 context, some aluminum extruders use as many as 250 unique profiles (extrusion shapes) in their 

manufacturing process. To move the dies that are used to extrude those aluminum 

profiles would cost at least $7,500 per die alone. For products that are highly regulated for safety reasons, the raw material supplier is routinely specified in the contract based on testing performed to the customer’s requirements. During the term 

of a contract, raw material suppliers typically cannot be changed without agreement 

from the customer and any potential new supplier must undergo a qualification testing and approval process that can take 12–18 months. 

For Section 301 tariffs, some Chinese-origin inputs may be available from other 

markets but Coalition members have invested in complex supply chains that have 

taken years to develop and maintain. Requiring U.S. manufacturers to rebuild these 

supply chains drains vital resources and will take many years to source around 

these tariffs. Moreover, realigning supply chains is not without its own costs. Where 

alternative sources of supply can be found, often the total cost (price, quantity, quality) is higher than the price available in China, even when the 301 tariff is added 

to the Chinese good. Furthermore, goods subject to safety approvals like UL standards would be subject to retesting and relisting when the country of origin changed, 

which is an extraordinary expense that most companies, especially small businesses, 

cannot afford. As a result, many U.S. companies decided to pay the 301 tariffs, especially during the pandemic, rather than face the higher costs and uncertainty of realigning their supply chains. 

More, with the expiry of the Generalized System of Preferences (GSP) program, U.S. 

companies now must pay higher tariffs to import from developing country markets 
116 

13 Alberto Osnago, Roberta Piermartini and Nadia Rocha, ‘‘Trade Policy Uncertainty as a Barrier to Trade,’’ WTO Working Paper ERSD–2015–05 (May 26, 2015), https://www.wto.org/ 

english/res_e/reser_e/ersd201505_e.pdf. 14 AAF, Table 5. 15Stephen Morgan, et al., January 2022. ‘‘The Economic Impacts of Retaliatory Tariffs on U.S. 

Agriculture,’’ ERR–304, U.S. Department of Agriculture, Economic Research Service (January 

2022), https://www.ers.usda.gov/publications/pub-details/?pubid=102979. 16 Id. 17 19 U.S.C. § 1862(c). 

that could be good alternatives to China. In fact, some companies found that even 

with the Section 301 tariffs in place, it was still less expensive to import from 

China. The Coalition for GSP has detailed instances where sourcing moved back to 

China AFTER GSP expiry. 

Exclusions: The Commerce Department’s Section 232 Tariff Exclusion Process cannot mitigate the economic harm to U.S. steel- and aluminum-using manufacturers 

caused by the 232 tariffs. The exclusion process is supposed to allow companies to 

obtain exclusions to the tariffs if the product they need is not available in the U.S. 

in the quantities, quality, or form needed. However, the process has been broken 

from the start. It is lengthy and cumbersome and regardless of the numerous comments provided to the Commerce Department on ways to improve the process, it 

continues to favor domestic producers over consumers. Many Coalition members report an overall lack of transparency, predictability, and responsiveness to requests 

for information about why an exclusion request was not granted (in some instances 

despite having been previously granted and renewed). Commerce also counts imports covered by a duty exclusion against any available absolute quota volume or 

TRQ quantity until the allowed quantity is exhausted. In effect, importers are unable to use an exclusion unless the absolute quota or TRQ has already been filled. 

This requirement greatly limits the utility of the duty exclusion and should be terminated. 

The 301 exclusions, when they were available, also generated significant internal 

and external costs for companies requesting an exclusion. These costs included administrative costs of filing the request, reviewing the requests that were granted to 

ensure they could be applied to the relevant goods, and broker costs for filing for 

duty refunds. Unfortunately, the 301 exclusions on the vast majority of products 

have expired and are no longer available to provide any relief from the duties, even 

though USTR had previously agreed the products were not available in the United 

States. 

Uncertainty: The uncertainty that has surrounded the Section 232 and 301 since 

their inception adds to the expense of the tariffs and their ultimate costs to consumers. Businesses prioritize certainty because it allows them to adequately assess 

and account for risk. A growing body of economic literature has found there are real 

economic costs associated with trade policy uncertainty equivalent to a level of tariffs between 1.7 and 8.7 percentage points.13 When considered in the context of the 

$500 million in trade subject to the 301 duties the ‘‘uncertainty cost’’ would amount 

to between $9.35 and $47.85 million annually. The uncertainty cost reflects money 

companies are not investing in innovation, research, wages, skill-building and many 

other critical areas. 

Retaliation: In addition to raising costs for U.S. consumers, the Section 301 and 

232 tariffs resulted in significant retaliation against U.S. exports by other governments. Canada, China, the European Union, India, Mexico, and Turkey imposed retaliatory tariffs ranging from 4 to 70 percent on many U.S. exports.14 The retaliatory tariffs increased the price of U.S. exports in these markets relative to alternatives that were either domestically produced or imported from other international 

sources. In the agriculture sector alone, the retaliatory tariffs led to a reduction in 

U.S. agricultural exports to retaliating partners of more than $27 billion from the 

time the tariffs were imposed in 2018 through the end of 2019.15 China accounted 

for approximately 95 percent of these losses ($25.7 billion).16

D. Economic Effects That Have Not Materialized 

It is also important to note the anticipated direct economic effects that have not materialized as a result of the 232 and 301 tariffs. Under Section 232 an action taken 

by the President ‘‘must be taken to adjust the imports of the article and its derivatives so that such imports will not threaten to impair the national security.’’17 Similarly, Section 301 provides that USTR is authorized to take action, including imposing tariffs, ‘‘to obtain the elimination of’’ the ‘‘act, policy, or practice’’ that was the 
117 

18 19 U.S.C. § 2411(a). 19PIIE report. 20St. Louis Federal Reserve Bank, ‘‘Employment for Manufacturing: Iron and Steel Mills and 

Ferroalloy Production (NAICS 3311) in the United States,’’ FRED (accessed August 23, 2022), 

https://fred.stlouisfed.org/series/IPUEN3311W200000000. 21Sebastian Smith, ‘‘Biden Undecided on China Tariffs Ahead of Xi Call: W. House,’’ Barron’s 

(July 26, 2022), https://www.barrons.com/news/biden-undecided-on-china-tariffs-ahead-of-xicall-w-house-01658867406. 22Gary Hufbauer, Megan Hogan, and Yilin Wang. ‘‘For Inflation Relief, the United States 

Should Look to Trade Liberalization,’’ Peterson Institute for International Economics (May 

2022), https://www.piie.com/publications/policy-briefs/inflation-relief-united-states-should-looktrade-liberalization#:∼:text=For%20inflation%20relief%2C%20the%20United%20States%20should 

%20look%20to%20trade%20liberalization,-Gary%20Clyde%20Hufbauer&text=With%20US%20in 

flation%20running%20at,calls%20anticompetitive%20behavior%20by%20corporations. 

subject of the investigation.18 There is no evidence that either the 232 or 301 tariffs 

are actually solving the problems they were adopted to address. 

Steel producers have not significantly increased domestic production to ensure a reliable supply in a national security emergency. The ITC 232–301 Investigation reported an increase in domestic steel production of only 1.9 percent. Indeed, for certain categories of steel, domestic steel producers are shutting down, rather than expanding production. For example, the number of tin mill production lines in the U.S. 

continues to fall as U.S. Steel has idled its Gary Works mill and plans to close its 

Pittsburg, CA facility at the end of the year. Similarly, the domestic steel and aluminum industries are not seeing significant new job creation—by one estimate only 

8,700 jobs have been created or saved as a result of the tariffs.19 Further, the Federal Reserve’s comprehensive estimate of U.S. steel and aluminum jobs remains 

lower than the pre-tariff baseline.20 Moreover, imposing additional tariffs on U.S. 

imports does nothing to address the problem of global overcapacity. 

A similar fact pattern emerges with respect to the Section 301 tariffs. The additional duties imposed on imports from China have had no identifiable effect on persuading China to abandon the kinds of intellectual property rights (‘‘IPR’’) theft and 

forced technology transfer practices that were identified in USTR’s Section 301 report. Moreover, there is no indication that the cost of the tariffs is affecting the Chinese government or Chinese companies. Rather, the burden of these tariffs is falling 

on US businesses and their customers who are effectively being punished for China’s bad behavior. 

If Chinese government IPR and technology theft is the crux of the problem targeted 

by the Section 301 investigation, then the remedy should focus on limiting export 

opportunities for those Chinese-origin products that have benefited from the government’s actions (e.g., through Section 337 actions to prohibit imports of those products). Instead, the Section 301 tariffs apply to nearly all products sourced from 

China. 

By virtually any measure the 232 and 301 tariffs have failed to achieve their stated 

purpose. 

CONCLUSION 

Coalition members believe that neither the 232 nor 301 tariffs have been effective 

at achieving their intended objective and the President should eliminate them. At 

least some officials in the Biden Administration agree, calling the tariffs ‘‘poorly designed’’ and confirming they have increased costs for American families and small 

businesses.21 One study showing that trade liberalization could deliver a one-time 

reduction in consumer price index (CPI) inflation of around 1.3 percentage points 

amounting to $797 per US household.22

Congress has provided for the automatic termination of Section 301 actions at the 

end of 4 years absent a determination that continuing them is still necessary. USTR 

has initiated the statutory review of the 301 tariffs, but the process and timetable 

for reaching a decision have dragged on for nearly a year. The Administration 

should accelerate this review and take bold action to end the 301 tariffs as soon as 

possible. 

Unlike Section 301, there is no statutory process for ending or even reviewing the 

232 tariffs. Absent efforts by both the government and U.S. steel and aluminum producers to increase the domestic supply of products needed for national security pur-
118 

1 Continental Congress 1774, 1:26. 

poses, the continuation of the 232 duties simply amounts to a subsidy to domestic 

producers provided by consumers and U.S. manufacturers of downstream products. 

Sincerely, 

Tiffany Smith 

Chair, Tariff Reform Coalition and 

Vice President of Global Trade Policy, NFTC 

NATHAN’S PAPERS, LLC 

12725 SW Millikan Way, Suite 307 

Beaverton, OR 97005 

Phone: (541) 936–2896 

https://nathanspapers.com/ 

March 21, 2023 

The Hon. Ron Wyden The Hon. Jason Smith 

Chairman Chairman 

U.S. Senate U.S. House 

Committee on Finance Committee on Ways and Means 

219 Dirksen SOB 1139 Longworth HOB 

Washington, DC 20510 Washington, DC 20515 

The Hon. Mike Crapo The Hon. Richard Neal 

Ranking Member Ranking Member 

U.S. Senate U.S. House 

Committee on Finance Committee on Ways and Means 

219 Dirksen SOB 1139 Longworth HOB 

Washington, DC 20510 Washington, DC 20515 

Re: Hearing on the Biden Administration’s 2023 Trade Policy Agenda with 

United States Trade Representative, Ambassador Katherine Tai 

Dear Chairmen Wyden and Smith, and Ranking Members Crapo and Neal: 

Please accept this letter as a written public submission from Nathan’s Papers, LLC 

for the record for the U.S. Senate Committee on Finance and U.S. House Committee 

on Ways and Means, Hearing on the Biden Administration’s Trade Policy Agenda 

with United States Trade Representative, Ambassador Katherine Tai. 

Nathan’s Papers is an Oregon-based company dedicated to researching and writing 

and planning events under the header In CONGRESSTM about the American 

Founding and governance. We are particularly focused on the foundations of American governing that were established in the years 1774 and 1775 prior to declaring 

independence. The critical actions that took place during this time period were the 

key elements that were necessary to put in place before the United Colonies could 

issue the Declaration of Independence. They were primarily related to trade, fiscal 

policy and establishing a treasury, setting up a system of defense, establishing lines 

of communication via a postal service, and international diplomacy. 

This comment highlights the initial debates on trade from the First Continental 

Congress in 1774 and early days of the Second Continental Congress. We feel this 

important context can help inform the 118th Congress’s work in collaboration with 

President Joe Biden’s Administration on a trade policy agenda that will strengthen 

the United States’ opportunities for international commerce in a highly competitive 

environment. 

The future of American trade has been a top concern since the inception of Congress. The First Continental Congress included Delegates from twelve of the British 

colonies in North America that met in Philadelphia, Pennsylvania to discuss the 

growing tensions between the Colonies and the British government prior to the start 

of the kinetic phase of the American Revolution. The Congress convened on September 5, 1774 and adjourned on October 26, 1774. On September 6, 1774, the Congress created two committees—one to draw up rules and the other to ‘‘examine and 

report the several Statutes, which affect the trade and Manufactures of the colonies.’’1

The early debates on trade are illustrated through the diaries of the Delegates to 

the Congress, particularly Massachusetts Delegate and eventual first Vice-President 

and second President of the United States, John Adams. Delegates struggled with 
119 

2 ‘‘[Notes of Debates in the Continental Congress, 28 September 1774] ,’’ Founders Online, National Archives, https://founders.archives.gov/documents/Adams/01-02-02-0004-0006-0031. 

[Original source: The Adams Papers, Diary and Autobiography of John Adams, vol. 2, 1771– 

1781, ed. L. H. Butterfield. Cambridge, MA: Harvard University Press, 1961, pp. 141–144.] 3 Id. 

4 ‘‘1774 Thursday. October 13th,’’ Founders Online, National Archives, https://founders.archives.gov/documents/Adams/01-02-02-0004-0007-0014. [Original source: The Adams Papers, Diary and Autobiography of John Adams, vol. 2, 1771–1781, ed. L. H. Butterfield. Cambridge, MA: Harvard University Press, 1961, pp. 151–152.] 5 James Duane’s Notes for a Speech in Congress. Letters of Delegates to Congress, 1774–1789. 

1:189–191. Washington, DC: Library of Congress, 1976–2000. 6 Continental Congress 1774, 1:75–80. 

7 ‘‘[Notes of Debates, Continued] October 5th,’’ Founders Online, National Archives, https:// 

founders.archives.gov/documents/Adams/01-02-02-0005-0004-0002. [Original source: The 

Adams Papers, Diary and Autobiography of John Adams, vol. 2, 1771–1781, ed. L. H. 

Butterfield. Cambridge, MA: Harvard University Press, 1961, pp. 192–194.] 8 ‘‘[Notes of Debates, Continued] October 12th,’’ Founders Online, National Archives, https:// 

founders.archives.gov/documents/Adams/01-02-02-0005-0004-0006. [Original source: The 

Adams Papers, Diary and Autobiography of John Adams, vol. 2, 1771–1781, ed. L. H. 

Butterfield. Cambridge, MA: Harvard University Press, 1961, pp. 204–208.] 9 Continental Congress 1775, 3:314–15. 

10 ‘‘From John Adams to Joseph Ward, 14 November 1775,’’ Founders Online, National Archives, https://founders.archives.gov/documents/Adams/06-03-02-0159. [Original source: The 

Adams Papers, Papers of John Adams, vol. 3, May 1775–January 1776, ed. Robert J. Taylor. 

Cambridge, MA: Harvard University Press, 1979, pp. 296–297.] 

the disproportionate impact that a trade embargo would have on various colonies 

and whether the British government should have the authority to regulate the Colonies’ trade. The question then became if not the British government who should regulate trade?2 It was in the interest of trade that Delegates conceived the idea of an 

American legislature.3

The Colonies were split on whether they should cede the power to regulate trade 

during the First Continental Congress. Five colonies supported it, 5 were against 

it, and the Massachusetts and Rhode Island Delegates divided.4 Delegate James 

Duane from New York outlined the reasons for allowing Great Britain to regulate 

trade. He noted it would be a gesture of peace and remove any concerns the Colonies sought independence. Those opposed to the regulation argued that the Colonies 

would be giving up a right and the British government may abuse the authority for 

taxation and oppression or as justification for assuming power in all matters.5

The Colonies ultimately decided to enter the Continental Association, the precursor 

to the Declaration of Independence. They agreed to implement a non-importation, 

consumption, and exportation agreement against goods from Great Britain that 

would begin in December 1775.6 They also agreed to stop consuming certain luxury 

items and begin encouraging internal governance and manufacturing so that the 

Colonies would be less dependent on British goods. The Continental Association recognized the need to start putting processes in place so that the Colonies could begin 

to self-govern. The Delegates were not yet prepared to declare independence, but 

this formal association document expressed their intent to stand firm with the people of the Massachusetts Bay colony, which was under military government and extreme economic restrictions in retaliation for the Boston Tea Party, among other 

things, and not back down from their demands for fair and just treatment. 

As the December embargo date approached, the Second Continental Congress reignited the trade debate. It convened on May 10, 1775 and would stay in session 

until the ratification of the Articles of Confederation in 1781. Wearied from prosecuting the war by printing a new paper currency called the ‘‘Continental Dollar,’’ 

several Delegates advocated for trade. John Adams wrote in his notes ‘‘The Q. is 

whether we must have Trade or not. We cant do without Trade. We must have 

Trade.’’7 Trade would support the credit worthiness of the Continental Dollar.8 Despite this sentiment, the Congress voted to suspend all trade until March 1776.9

John Adams indicated that he hoped this would allow more time to build defenses.10

The Congress was also in the process of building out a naval fleet. 

Thank you for your consideration. 

Sincerely, 

Lynn White 
120 

PITTS ENTERPRISES INC. 5734 Pittsview Highway 

Pittsview, AL 36871 334–855–4754 https://pittstrailers.com/ 

Hon. Ron Wyden, Chairman 

Hon. Mike Crapo, Ranking Member 

U.S. Senate 

Committee on Finance 

Dirksen Senate Office Bldg. 

Washington, DC 20510–6200 

Re: Urgent Help to Protect our Company and the American Supply 

Chain from an Attack by a Chinese State-Owned Competitor 

Dear Senators Wyden and Crapo: 

As an American businessman who is personally affected by an attack by a massive 

Chinese State-Owned entity, CIMC Intermodal Equipment—a unit of COSCO, I respectfully and urgently request your help to save our company. 

I work for Pitts Enterprises, an American employee-owned and operated manufacturer based in Alabama. We are a significant supplier of truck trailer chassis (i.e., 

cargo container-sized truck chassis) through our facilities in Alabama and with our 

manufacturing partner in Vietnam. However, our business has been stopped for 

over six months due to a meritless Customs and Border Protection (CBP) import 

evasion investigation, under the Enforce and Protect Act (EAPA) of 2015, against 

Pitts instigated by a massive Chinese State-Owned entity. This stoppage has cost 

us over $270,000,000.00 in sales and stopped shipping over 10,000 finished chassis 

to ports in America, all of which are needed to ensure the smooth and timely transport of American imports and exports. I am writing today in a desperate attempt 

to save the company I work for and to right a terrible wrong that has happened 

to us. 

This same Chinese State-Owned company was found guilty of dumping by selling 

significantly below production cost and receiving Chinese government subsidies to 

put all American manufacturers out of business. Our accuser reports directly to the 

State Council of China, the highest level of China’s government. 

Our Chinese government-controlled accuser is using a distorted reading of the antidumping order from Commerce as their basis for the allegations. We are confident 

that this is a distorted reading as we have written support from the entire Coalition 

of American Chassis manufacturers, the companies along with ours that came together with us to maintain America’s chassis manufacturing base, so that America 

does not become totally dependent on China for this critical equipment as we already are for ocean containers. The intent and purpose of the AD and CVD orders 

in this case for which we successfully petitioned was to stop the predatory business 

practices of a Chinese State-controlled organization so as to protect American businesses. China has historically killed American businesses through low pricing, driving out the competition, and having us at their mercy. Make no mistake; if this is 

not corrected, it will kill our company, our 275 American jobs, and the families they 

support, including my own. 

As stated, we worked to implement the anti-dumping rules, the same ones being 

used against us by our Chinese government-controlled accuser. These rules were developed to stop the importation of Chinese subsidized chassis and prevent our accuser from skirting/circumventing these orders by manufacturing chassis in China 

and bringing them in subassemblies/multiple parts for final assembly in the U.S. 

Why, in God’s name, would we spend hundreds of thousands of dollars to convince 

our government to impose trade rules that we purportedly violated ourselves? This 

misrepresentation of this ruling has caused CBP to investigate our company, and 

we are cooperating with the CBP investigation. This cooperation includes hosting 

a delegation of ten people from CBP to visit our partner’s factory in the preferred 

trading nation of Vietnam, where it was demonstrated that all claims against Pitts 

are unfounded and that our products are outside of the scope of the AD and CVD 

order or evasion process. 

Our products are not within the scope of the evasion process because Pitts products 

are manufactured in Vietnam. Pitts has provided countless pages of proof, including 

the video found at this link: https://drive.google.com/file/d/13KKf5q1i-424LvXw 

2eKqFreBif6-cP5L/view?usp=drive_web. The video shows over 100 steps to produce 

the chassis manufacturing for the Port of Charleston. This same port, with over 
121 

2,300 of these chassis sitting on their port, is now on customs hold. These chassis 

are needed badly, and I dare to estimate the cost to their port and state. 

The manufacturing process demonstrated in the video is used to produce the chassis 

we have offered for use in many ports. Clearly, these chassis are manufactured from 

raw steel to complete marine chassis in the Vietnam factory, making them not covered merchandise subject to the anti-dumping duties. 

Last week, on March 15, DOC accepted our request to clarify the scope of the antidumping order on chassis. Notably, DOC initiated this scope proceeding after requesting and receiving evidence that the components used in Vietnam are not subassemblies subject to the anti-dumping order. We are confident that DOC will confirm this clarification based on the mountains of evidence available to the Federal 

government. 

Yet CBP continues with its EAPA investigation (1) despite the fact that DOC has 

primary authority over the anti-dumping and countervailing duty laws, (2) despite 

the clearly erroneous interpretation of the anti-dumping order scope language alleged by our Chinese government-controlled accuser, which was the basis for the initiation of the EAPA investigation, and (3) despite DOC’s initiation of the scope proceeding. 

This is critical, and I respectfully ask for your consideration and support. I am certain that the rules set by DOC to stop the dumping of Chinese products were never 

meant to cripple an American company and its American customers, and thusly the 

American supply chain. Yet if CBP does not recognize the primacy of DOC in matters of interpreting the scope of anti-dumping orders, our Chinese governmentcontrolled accuser will indeed cripple us by using American trade laws against 

Americans. The EAPA procedure needs both immediate and long-term corrections 

to end what is happening to us and prevent it from being inflicted on others. 

My company and I are ready and willing to cooperate with the Committee in any 

way and look forward to hearing from you. 

Sincerely, 

Ed Gill 

Vice President—Sales 

Dorsey Intermodal 

Kingwood, TX 77345 

317–376–2088 

ed@dorseyintermodal.com 

cc: Jeff Pitts—Owner and CEO, Pitts Enterprises 

JP Pierson—President, Pitts Trailers and Dorsey Intermodal 

Senator John Cornyn 

Senator Ted Cruz 

Senator Tim Scott 

Senator Tommy Tuberville 

Senator Katie Britt 

Senator Cory Booker 

Senator Robert Menendez 

Senator Raphael Warnock 

Representative Mike Rogers 

Representative Bill Pascrell 

Æ