[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                        COMMERCE SECRETARY ROSS

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 22, 2018

                               __________

                          Serial No. 115-FC09

                               __________

         Printed for the use of the Committee on Ways and Means
         
         
   
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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
33-808                    WASHINGTON : 2019                     
          
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                      COMMITTEE ON WAYS AND MEANS

                      KEVIN BRADY, Texas, Chairman

SAM JOHNSON, Texas                   RICHARD E. NEAL, Massachusetts
DEVIN NUNES, California              SANDER M. LEVIN, Michigan
DAVID G. REICHERT, Washington        JOHN LEWIS, Georgia
PETER J. ROSKAM, Illinois            LLOYD DOGGETT, Texas
VERN BUCHANAN, Florida               MIKE THOMPSON, California
ADRIAN SMITH, Nebraska               JOHN B. LARSON, Connecticut
LYNN JENKINS, Kansas                 EARL BLUMENAUER, Oregon
ERIK PAULSEN, Minnesota              RON KIND, Wisconsin
KENNY MARCHANT, Texas                BILL PASCRELL, JR., New Jersey
DIANE BLACK, Tennessee               JOSEPH CROWLEY, New York
TOM REED, New York                   DANNY DAVIS, Illinois
MIKE KELLY, Pennsylvania             LINDA SANCHEZ, California
JIM RENACCI, Ohio                    BRIAN HIGGINS, New York
PAT MEEHAN, Pennsylvania             TERRI SEWELL, Alabama
KRISTI NOEM, South Dakota            SUZAN DELBENE, Washington
GEORGE HOLDING, North Carolina       JUDY CHU, California
JASON SMITH, Missouri
TOM RICE, South Carolina
DAVID SCHWEIKERT, Arizona
JACKIE WALORSKI, Indiana
CARLOS CURBELO, Florida
MIKE BISHOP, Michigan
DARIN LAHOOD, Illinois

                     David Stewart, Staff Director

                 Brandon Casey, Minority Chief Counsel


                            C O N T E N T S

                               __________

                                                                   Page

Advisory of March 22, 2018, announcing the hearing...............     2

                                WITNESS

Honorable Wilbur L. Ross, Secretary, Department of Commerce......     6

                        QUESTIONS FOR THE RECORD

Questions from Ways and Means Committee Ranking Member Neal to 
  Secretary Ross.................................................    46
Questions from Trade Subcommittee Ranking Member Pascrell to 
  Secretary Ross.................................................    51
Questions from Representative Jenkins to Secretary Ross..........    54
Questions from Representative Paulsen to Secretary Ross..........    56
Questions from Representative Black to Secretary Ross............    63
Question from Representative Higgins to Secretary Ross...........    65
Question from Representative Sewell to Secretary Ross............    66
Questions from Representative Meehan to Secretary Ross...........    67
Questions from Representative Holding to Secretary Ross..........    70
Question from Representative Jason Smith to Secretary Ross.......    72
Questions from Representative Walorski to Secretary Ross.........    72
Questions from Representative Curbelo to Secretary Ross..........    77

                       SUBMISSIONS FOR THE RECORD

Alliance for Competitive Steel and Aluminum Trade (ACSAT)........    81
Acuity Brands, Incorporated......................................    83
American Fuel & Petrochemical Manufacturers (AFPM)...............    85
Air-Conditioning, Heating, & Refrigeration Institute (AHRI)......    91
Amgraph Packaging, Incorporated..................................    97
Morris, Manning & Martin, LLP, on behalf of Bekaert Corporation, 
  Kiswire America, and Tokusen USA...............................    99
Bemis Company, Incorporated......................................   104
Berry Global, Incorporated.......................................   106
Electronic Privacy Information Center (EPIC).....................   107
Flexible Packaging Association (FPA).............................   110
Associations Dealing with the Energy Sector and Pipelines 
  including the Association of Oil Pipe Lines (AOPL), Interstate 
  Natural Gas Association of America (INGAA), GPA Midstream 
  Association, Energy Equipment and Infrastructure Alliance 
  (EEIA), Natural Gas Supply Association (NGSA), Center for LNG 
  (CLNG), American Petroleum Institute (API), and the Independent 
  Petroleum Association of America (IPAA)........................   116
Learning Resources, Incorporated (LR)............................   118
MillerCoors......................................................   122
Precious Metals Association of North America (PMANA).............   127

 
                        COMMERCE SECRETARY ROSS

                              ----------                              


                        THURSDAY, MARCH 22, 2018

                     U.S. House of Representatives,
                               Committee on Ways and Means,
                                                    Washington, DC.

    The Committee met, pursuant to notice, at 9:04 a.m., in 
Room 1100, Longworth House Office Building, Hon. Kevin Brady 
[Chairman of the Committee] presiding.
    [The advisory announcing the hearing follows:]

                ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS

                                                CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Thursday, March 22, 2018
FC-09

                 Chairman Brady Announces Hearing with

                        Commerce Secretary Ross

    House Ways and Means Chairman Kevin Brady (R-TX), announced today 
that the Committee will hold a hearing with Secretary of Commerce 
Wilbur Ross on trade matters within Commerce's purview, particularly 
the section 232 determinations on steel and aluminum. The hearing will 
take place on Thursday, March 22, 2018, in room 1100 of the Longworth 
House Office Building, beginning at 9:00 a.m.

      
    In view of the limited time to hear the witness, oral testimony at 
this hearing will be from the invited witness only. However, any 
individual or organization may submit a written statement for 
consideration by the Committee and for inclusion in the printed record 
of the hearing.

      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
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you have followed the online instructions, submit all requested 
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with the formatting requirements listed below, by the close of business 
on Thursday, April 5, 2018. For questions, or if you encounter 
technical problems, please call (202) 225-3625.

      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
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    The Committee seeks to make its facilities accessible to persons 
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call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four 
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    Note: All Committee advisories and news releases are available at
    http://www.waysandmeans.house.gov/

                                 

    Chairman BRADY. The Committee will come to order. Good 
morning. Today our Committee is honored to welcome Commerce 
Secretary Wilbur Ross to testify on recent trade actions, 
particularly section 232 determinations on steel and aluminum.
    Mr. Secretary, thank you for joining us. And we look 
forward to your testimony, which is very timely, with tariffs 
set to take effect on aluminum and steel tomorrow.
    Congress takes our constitutionally-mandated oversight role 
over trade policy very seriously. I have had the opportunity to 
exchange views with you, with President Trump, and other 
Administration officials recently on our shared urgent priority 
of addressing global over-capacity in aluminum and steel.
    Several Members of this Committee addressed that point in 
our hearing with Ambassador Lighthizer yesterday. We applaud 
the President for his leadership in insisting that we address 
this problem, and we know you have a key role. We are committed 
to working closely with you and the President to make sure we 
hit the target by dealing with the root problem of China's 
persistent distortive policies, while minimizing collateral 
damage to our economy.
    Mr. Secretary, your vast experience in international 
business, and particularly in the steel sector, have prepared 
you well. You understand the complexity of modern supply chains 
we must take into account when considering how any enforcement 
action will affect every part of our economy.
    As you know 108 House Republicans joined Chairman Reichert 
and me in writing President Trump shortly before the 
Presidential proclamations were issued to urge him to take a 
targeted approach on any tariffs.
    We continue to highlight several priorities: Keeping 
tariffs targeted so they don't affect fairly traded products or 
products that don't pose a national security threat; using a 
process to allow U.S. companies to petition for and promptly 
obtain exclusions for imports unavailable from U.S. sources or 
that don't pose a national security threat; grandfathering 
existing contracts so we don't unfairly drive up costs of 
projects underway; reviewing tariffs on a short-term basis to 
consider if a different approach would better serve the U.S. 
national interest; and, of course, setting a termination date.
    I welcome the President's commitment to flexibility and 
cooperation to our allies that trade fairly. The exclusion of 
Canada and Mexico is an important first step in such 
flexibility, and one that we strongly support. We can't 
jeopardize our ability to incentivize other countries to 
cooperate on addressing our shared concerns with China. And we 
don't want to encourage other countries to restrict our 
American exports. Instead, we have to tailor these tariffs so 
Americans have certainty as they continue to trade fairly, sell 
American-made products to customers all over the world, and 
hire more workers here at home.
    I know you will be hearing from many Committee Members 
today about specific improvements they want to the product 
exclusion process to avoid risking jobs in their districts. In 
particular, as these tariffs go into effect tomorrow, I urge 
you to allow consolidation of petitions; retroactive 
application of exclusions to the date the petition was filed; 
and an exclusion period beyond the 1 year set out in your 
rules.
    I also oppose increasing tariffs on other products or 
countries as exclusions are made. These tariffs should be in 
place for the absolute minimum period, their effectiveness 
should be constantly studied. They should be sunset after a 
year. If they are not having the effect you intend, you should 
assess whether another policy would be more effective than 
continuing them.
    Tariffs are taxes, plain and simple, on American job 
traders and consumers. Their scope and their duration should 
never exceed what is needed to accomplish their goal.
    Along those lines I also want to address the potential for 
section 301 tariffs. I am just as frustrated--I think we all 
are--just as the Administration is, with China's blatant theft 
of America's intellectual property, and increasingly devious 
ways in which it steals or otherwise obtains our very best 
technology.
    But we need the right remedy, not one that punishes 
American family, workers, and small businesses by putting new 
taxes on the products they buy. We don't want to punish 
Americans for China's misbehavior. At the very least, I urge 
the Administration to provide a strong opportunity for public 
comment, so the effect of tariffs on our economy can be 
properly assessed. That would allow us to design our policies 
to hit the right target, China, not Americans, who are 
dependent on us to look out for them.
    In 2015 Congress passed strong new trade enforcement tools. 
I am very encouraged to see the President's dedication to 
strict enforcement of trade rules by putting into action these 
new enforcement tools passed by Congress, including by ensuring 
U.S. industries can benefit from trade remedy laws, and we can 
address circumvention and evasion of trade remedy orders.
    Secretary Ross, I look forward to continuing our work 
together on a pro-growth agenda that creates jobs and grows 
paychecks. We have already had great success in improving the 
lives of all Americans through tax cuts and balanced 
regulation. We have to build on this success with an ambitious 
pro-growth agenda that doesn't merely buy American; it allows 
us to sell American all throughout the world.
    Mr. Secretary, we look forward to your testimony.
    And I will yield to the distinguished Ranking Member, Mr. 
Neal, for the purposes of his opening statement.
    Mr. NEAL. Thank you, Mr. Chairman.
    Welcome, Secretary Ross. Today's hearing is an opportunity 
for us to hear from you directly about the steel and aluminum 
tariffs that are scheduled to go into effect tomorrow, and 
details about the processes for exclusions and exemptions that 
are still ongoing.
    We know that the steel and aluminum industries in the 
United States have been struggling for many years. We also know 
that the situation is the direct result, in many instances, of 
unfair practices from trading partners. China has been the most 
flagrant bad actor. Many of their steel and aluminum companies 
are really just extensions of the Chinese government that 
benefit from massive government subsidies.
    In 2000 China's steel capacity was just over 100 million 
tons, roughly the same as the United States. Today, it is 1.2 
billion tons, more than 10 times as high as U.S. capacity, and 
more than the total capacity of the United States, European 
Union, Japan, and Russia, combined.
    Chinese industrial policies have led to massive amounts of 
overcapacity in both steel and aluminum industries. Global 
markets have been flooded and the price of both commodities has 
dropped so low that firms playing by the rules can hardly 
compete. The situation has put our workers and firms in an 
unsustainable position. They deserve strong action and support 
from our government.
    In response to these issues, the Administration has 
announced that it will impose a 25 percent tariff on steel 
imports and a 10 percent tariff on aluminum products. These 
tariffs are set to take effect tomorrow. I understand why our 
steel and aluminum producers and workers are excited about the 
tariffs. The tariffs represent relief that they have been 
waiting for, in some instances, for years. We hope that it will 
allow them to rebuild, restart, and, indeed, rehire.
    I am also concerned, however, that the relief promised by 
the tariffs will be watered down to the point of not being 
effective. And I am concerned that the way this action was 
rolled out will discourage cooperation from the international 
partners that we need in the fight over China's capacities.
    We have a lot of questions about how the Administration 
will proceed in coming weeks and months. We posed many of them 
already to Ambassador Lighthizer yesterday, and we understand 
that you and your Department have a different role in these 
investigations and in the administration of the exemption and 
exclusion processes.
    We are particularly interested in when the country 
exemptions and product exclusion decisions will be made, and 
when and where and how they will be made effective.
    Once exemptions and exclusions are applied, we want to know 
how the tariffs will be able to provide the promised relief, 
and whether the tariff levels will be adjusted upward to 
account for exemptions and exclusions.
    I would also like to know what the Administration's plan is 
for monitoring whether the tariffs are working, and how the 
Administration would modify the relief to adjust for real world 
effects.
    We also would like to have you focus on what the 
Administration's vision is for how the steel and aluminum 
tariffs will contribute to a multilateral, coordinated strategy 
for counteracting the global overcapacity crisis and, 
certainly, how long the Administration envisions these tariffs 
would need to be in place to address the national security 
threat that your Department has found.
    I hope you can provide, Mr. Secretary, clarity on these 
issues over the course of our hearing this morning.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you. Without objection, other 
Members' opening statements will be made part of the record.
    Today's sole witness is Secretary Ross.
    Mr. Secretary, the Committee has received your written 
statement. It will be made part of the formal hearing record. 
You have reserved 5 minutes to deliver your oral remarks. Mr. 
Secretary, you are welcome. We are pleased and honored that you 
are here. You may begin when you are ready.

STATEMENT OF HONORABLE WILBUR L. ROSS, SECRETARY, DEPARTMENT OF 
                            COMMERCE

    Secretary ROSS. Thank you very much, Mr. Chairman, Mr. 
Ranking Member, and Members of the Committee. I thank you very 
much for the opportunity to speak with you today, and for your 
input as we implement bipartisan trade policies that protect 
and defend American families, American workers, and American 
businesses.
    This President has made it clear that his first priority is 
keeping the American people safe. He has also made it clear 
that he will not tolerate unfair trading practices that weaken 
our internal economy to the point where they threaten to impair 
our national security.
    I initiated the steel and aluminum 232 investigations in 
April 2017, and the President signed two memorandums that month 
directing me to proceed expeditiously to conduct these 
investigations and report my findings. I submitted my reports 
to the President in January. The reports found that high levels 
of import penetration are adversely impacting the economic 
welfare of our domestic steel and aluminum industries. We have 
seen plants closed or idle, with attendant loss of jobs, 
skilled workers, and research and development.
    The reports also found that global excess capacity is a 
circumstance that makes it likely that continued high level of 
imports would cause further closures. This all would place the 
United States at risk of being unable to produce sufficient 
steel and aluminum to meet demands for national defense and 
critical infrastructure in an emergency.
    For example, there is only one remaining U.S. producer of 
steel used in electric transformers, a type of critical 
infrastructure, and only one high-volume producer of armor 
plate used in military vehicles and ships. Similarly, there is 
only one high-volume producer of the high-purity aluminum 
needed for defense and aerospace applications.
    The problem is that products with national security and 
critical infrastructure applications account for only a small 
part of overall steel and aluminum consumption, and therefore 
are not enough on their own to sustain healthy, innovative 
steel and aluminum industries. Thus, I recommended that the 
President take one of several different actions to curb 
imports, and thus ensure the long-term viability of our 
Nation's steel and aluminum industries.
    On March 8th, President Trump exercised his authority under 
section 232 of the Trade Expansion Act of 1962, as amended, to 
impose a 25 percent tariff on steel imports, and a 10 percent 
tariff on aluminum imports. The tariff actions taken by the 
President are necessary to defend America's essential steel and 
aluminum industries against imports that harm our domestic 
industry to the point that they threaten to impair our national 
security.
    The President's 232 decisions are the result of a long and 
well thought-out inter-agency process led by the Commerce 
Department, where we studied the causes of the current 
circumstances and the impacts of our actions. On March 23rd, 
tomorrow, the U.S. Customs and Border Protection will begin 
implementing the tariffs.
    So where do we go from here? We have already announced a 
process whereby domestic industry can be excluded from the 
tariffs, based on national security concerns or a lack of 
domestic supply of a quality product. Our intention is to 
implement these tariffs in a way that minimizes undue negative 
effect on downstream industries, while also weighing the 
national security needs of our military and our critical 
infrastructure.
    The President has also announced that he is suspending the 
tariffs for products from Canada and Mexico pending 
negotiations that would yield satisfactory alternative means to 
address the threatened impairment to U.S. national security.
    We also intend to enter discussions with the EU on behalf 
of their member countries and any country wishing to make such 
an arrangement. The President also maintains further authority 
to alter the tariffs at any time, based on national security 
and other considerations.
    As I said in the beginning, our top priority is the 
security and safety of every American. And that will continue 
to guide us, going forward.
    That was just a brief overview, but I look forward to 
getting into more specific questions and more detail as I 
respond to your inquiries. Thank you.
    [The prepared statement of Secretary Ross follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Chairman BRADY. Thank you, Mr. Secretary, for your 
testimony. We will now proceed to questions. Due to the time 
constraints this morning, we have agreed to limit questions to 
3 minutes. And I will begin.
    Mr. Secretary, we have to get the exclusion process right 
for both products and countries. So we make sure our remedies 
are narrowly tailored and U.S. jobs aren't harmed. If these 
exclusions aren't provided in a workable and timely way, this 
could cost us U.S. jobs.
    So, in my district, there is a big impact on energy. And 
just one example, Grant Prideco is this great manufacturing 
success in my district in Navasota, Texas, population 7,500. 
They make premium drill pipe that is used in some of the most 
technically demanding oil field applications in the world.
    They send steel briquettes from Corpus Christi, Texas to 
Austria, which creates green tubes that meet exacting technical 
specifications that aren't available here from U.S. suppliers. 
Those steel tubes come back to Navasota, and those 500 workers 
thread them and improve them. They sell them, about 60 percent 
of them, to American energy companies so they can compete. And 
40 percent they compete with and sell around the world. They 
have fierce global competition.
    So Grant Prideco was planning to increase their workforce 
from 500 to 1,000 employees, as the energy market improves. But 
now those plans are on hold, due to these tariffs and the 
exclusion process. Worse, because they could, under a 25 
percent tariff, lose half of their sales and potentially face 
shrinking that workforce.
    So I did a town hall recently in their manufacturing plant. 
These are great workers who do an amazing job, and this plant 
is so important to that community. So if that--their product 
isn't excluded, what do I tell them? Do I----
    Secretary ROSS. Well----
    Chairman BRADY. Well, just a second. Do I tell them China 
is cheating, so you need to lose your job? That just doesn't 
seem right.
    I know you care about these manufacturing jobs. I know 
President Trump is just passionate about protecting those jobs. 
So will the exclusion process protect American workers like 
that?
    Secretary ROSS. I believe so. And, as you know, we have 
posted the basis for product exclusions on the Commerce 
website. We did that the other day, and we have already gotten 
in 100 or 200 inquiries, and are literally processing them as 
we sit here this morning.
    As to eligibility, any individual or organization that uses 
steel or aluminum products identified in the proclamations may 
submit requests for exclusion. Those parties must use the steel 
or aluminum articles in business activities in the United 
States, as was the case with the parties you identified in your 
opening remarks. And those could be construction, they could be 
manufacturing, or they could be supplying those products to end 
users.
    A foreign-owned entity with a facility here with U.S. 
employees is also eligible to petition for an exclusion. A 90-
day intergovernmental review period will encompass the 30-day 
comment period. And we hope not to take 90 days for the 
intergovernmental review.
    The way that the mechanics will work is there is a 30-day 
comment period followed by 15 days for agencies to have--to go 
through the interagency process and comment, and then up to 45 
days for Commerce to analyze and make a final determination. So 
we anticipate no more than 90 days, and hopefully a good deal 
less.
    If a product is excluded, the exclusion request will be 
made case by case, based on the information specific to the 
individual or organization. It may include a single or multiple 
foreign source. However, a total volume of imports will be 
authorized for a specific time period. We do have the 
discretion to make broader exclusions available to all 
importers of those particular products if we find the 
circumstances warrant it.
    We will be looking for a--in order to not grant an 
exclusion, we will be looking for demonstrated manufacturing 
capability meeting the technical parameters for the specific 
article in question. This could include idle capacity that is 
being brought back online as a committed thing--not as a 
prospect, not as a possibility, but as a commitment by the U.S. 
company, as well as we will include new expanded capabilities.
    The determination as to whether to accept or deny an 
exclusion will be made public, and on a rolling basis. There 
will also be a process for companies to file confidential 
information that will not be made public. There will be an 
appeal process if a company is denied an exclusion.
    So that is a brief summary of the basic terms of the 
product exclusion process. Yesterday you had Ambassador 
Lighthizer here. I believe that he gave you a real description 
as to how he visualizes the country exclusion process to be 
done. We also are playing a supportive role in that, so I could 
address that if you wanted.
    Chairman BRADY. Thank you. Mr. Secretary, you have the 
discretion, if a product is excluded, to make those tariffs 
retroactive so there is not a harm on those U.S. companies. 
Will you consider that as part of the process?
    Secretary ROSS. Yes, sir. We have actually made a formal 
request to the Customs and Border Protection that they do what 
we call an escrow account.
    Chairman BRADY. Yes.
    Secretary ROSS. This is quite commonplace between us and 
the Customs and Border Protection in the context of anti-
dumping and countervailing duties. So, while the volume here 
might be a little more, that is a process with which they are 
familiar. We think it is only fair, because it shouldn't be 
that, just because there is a 90-day process, any manufacturer 
who is granted relief should not be stuck for the tariff during 
that 90 days.
    Chairman BRADY. And I agree, Mr. Secretary. Thank you.
    Mr. Neal.
    Mr. NEAL. Thank you, Mr. Chairman.
    Mr. Secretary, details as to how the tariffs and exemptions 
for countries and exclusions for company-specific products and 
how they are to be determined is really going to be critical.
    Diversified Metals, as a Department of Defense supplier 
with a facility located in my constituency, has raised concerns 
about the impact of these tariffs on its business. Diversified 
Metals provides key alloys used by the U.S. Navy in its 
submarine program. The Navy has only approved one hot-rolled 
bar mill, which currently is located in England.
    It is important for you to know that there is currently a 
good deal of uncertainty and confusion as to how the tariffs 
will affect the Department of Defense contracts. Companies are 
concerned that they will be required to pay tariffs, even if 
the Department of Defense mandates that they source their steel 
or aluminum from a foreign facility.
    Now, this is where I think that there is an opportunity for 
more clarification, and it relates to multilateral strategy. 
How will the announced tariffs, after exclusions and 
exemptions, ultimately provide relief to U.S. workers and 
industries? And I think I am picking up on a point the Chairman 
made on that.
    And what is the Administration's vision for achieving a 
multilateral, coordinated strategy for counteracting the global 
over-capacity crisis that has harmed the steel and aluminum 
industries?
    Secretary ROSS. Well, those are several questions. I will 
try to respond to the ones that I can recall. And if my memory 
is faulty, perhaps you can remind me.
    As you have seen, the UK--and, for that matter, the whole 
EU--I believe you have seen the release that Commissioner 
Malmstrom from the European Commission and I put out jointly 
yesterday. We have had very constructive discussions not just 
on steel and aluminum, but on potentially a broader range of 
topics. And our hope is that, just as we are in the midst of 
negotiation with Canada and Mexico on steel and aluminum and on 
other topics, our hope is that, for the first time, this will 
bring collective action on the part of the world community to 
deal with the ultimate problem, which is the over-capacity, 
particularly in China, but not exclusively in China.
    So, we are hoping that there will be extensive 
negotiations, bilateral or multilateral, as a result of this.
    Mr. NEAL. Mr. Chairman, I just would emphasize as you 
close, the multilateral aspect of this is really going to be 
critical. Thank you. Thanks, Mr. Chairman.
    Chairman BRADY. Thank you, Mr. Neal.
    Mr. Johnson, you are recognized.
    Mr. JOHNSON. Thank you, Mr. Chairman.
    Secretary Ross, welcome.
    Secretary ROSS. Thank you, sir.
    Mr. JOHNSON. Let me begin by saying that I strongly oppose 
the tariffs on steel and aluminum imports. You know my home 
State of Texas leads all States when it comes to importing 
steel and aluminum products. So it is a big deal for Texas.
    As a combat veteran who fought in two wars, I am deeply 
troubled that section 232, which is intended to protect our 
national security, is being misused to advance a protectionist 
agenda.
    Mr. Secretary, there is simply nothing to suggest that the 
imports pose a risk to our national security. Instead, these 
tariffs pose a serious risk to our economy, they could trigger 
a trade war, and they may damage our relations with key allies.
    In the Department of Defense memo that Secretary Mattis 
sent to you, he said--and I quote--``DoD does not believe that 
the findings in the reports impact the ability of DoD programs 
to acquire steel or aluminum necessary to meet national defense 
requirements.''
    Mr. Chairman, I would like to submit that memo for the 
record.
    Chairman BRADY. Without objection.
    [The submission for the Record of Hon. Sam Johnson 
follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Mr. JOHNSON. Thank you.
    Mr. Secretary, in light of this statement from the 
Secretary of Defense, why did you and the Administration ignore 
the view of Secretary Mattis and still go ahead with the 
tariffs?
    Secretary ROSS. Thank you, sir. The letter has many more 
words than were described in the brief excerpt you made from 
it. Let me read the part of it that is in the second paragraph: 
``Regarding the December 15, 2017, reports on steel and 
aluminum, Department of Defense believes that the systematic 
effect of unfair trade practices to intentionally erode our 
innovation and manufacturing industrial base poses a risk to 
our national security. As such, DoD concurs with the Department 
of Commerce's conclusion that imports of foreign steel and 
aluminum based on unfair trading practices impair the national 
security.''
    Then he goes on to say about the immediate request that--
the difference in the paragraph you read and the paragraph I 
read is simply this: The threshold under section 232 is whether 
or not the imports threaten the national security. The 
threshold is not that it actually impinges right now on 
national security, sir. And that is why the Department of 
Defense specifically said it concurred with our conclusion.
    Chairman BRADY. The time has expired. Thank you, Mr. 
Johnson.
    Mr. Levin, you are recognized.
    Mr. LEVIN. Welcome, Mr. Secretary. Welcome. I want to 
review quickly what seems clear. There has been a steel glut, 
also aluminum. China, the main source of it. China has used 
steel and aluminum as an export platform. State-owned 
enterprises, subsidization, has been the failure of action in 
this country and abroad.
    As far as I know, there has not been a single hearing since 
the Republicans took over on steel. We wrote letters urging 
action and the Administration in the past also settled for 
talk.
    Anti-dumping and countervailing duty--I went to Geneva to 
save them years ago. They were saved, but they are not enough.
    So the main victim has been the United States, our 
companies, our workers. And there has been an impact--
potentially, at least--on national security.
    So I want to press you. What, in view of these clear facts, 
including inaction by so many of our colleagues on the 
Republican side, what is the strategy? What is the main 
objective? Is it the tariffs, or is it the tariffs to force 
global action?
    I assume it isn't NAFTA. As we have discussed, you have to 
step up to the plate on NAFTA, and they are allowing Mexico to 
use suppressed wages as a weapon to attract industry.
    So briefly, with all these exceptions, is it a global 
response that is your aim, essentially?
    Secretary ROSS. It is, indeed. The reason that we need to 
take this kind of action is several. As you may be aware, in 
the normal course of events, the Commerce Department imposes 
anti-dumping and countervailing duty actions on a variety of 
products from a variety of countries. We, in fact, have 424 
such orders outstanding right now, half of which, 212, relate 
to steel. And of the 87 pending investigations, 38 also refer 
to steel. A lot of the steel actions have been directly against 
China.
    And the end result of that is not quite what you might have 
expected. Our direct imports from China have gone way down. 
They are a fraction of what they were before all of these 
actions were put in. But it is a little bit of a whack-a-mole 
situation in that it suddenly appears from another country, 
with or without some further transformation. And it appears, 
either directly, or it appears because their over-production 
dislodges domestic production from its own domestic market, and 
that material is dumped independently by the other country into 
world markets.
    Chairman BRADY. Mr.----
    Mr. LEVIN. So it is a global response that you are after?
    Secretary ROSS. Yes, it is. Yes, it is.
    Mr. LEVIN. Thank you.
    Chairman BRADY. Thank you. Mr. Levin, time has expired.
    Mr. Reichert, you are recognized.
    Mr. REICHERT. Thank you, Mr. Chairman.
    I thank you for being here, Mr. Secretary. I appreciate you 
taking time to be with us today. I also appreciate the fact 
that you have in your statement mentioned that you have 
considered the undue negative effects downstream. But I know 
you are hearing and I am hearing that businesses continue to be 
worried about the negative impact of these tariffs on their 
bottom line, and the timing and complexity of the exclusion 
process.
    And there is another issue, too. In sharing information as 
they apply for the exclusions, they are concerned about 
proprietary information that they are going to be sharing on 
their applications that are too sensitive to share publicly.
    Consumers are also worried, as you know. Families are 
worried, who buy everyday goods and--that require steel and 
aluminum, because they are anticipating that costs are going to 
go up.
    So there are a lot of issues I know that you are 
considering.
    These tariffs also set up the potential for retaliation by 
our trading partners. And while I am especially concerned about 
Washington State, I am concerned about the entire country. 
While I agree that we must combat unfair trade practices, we 
need to take a targeted approach and work in a partnership with 
the global community on a solution.
    And I want to touch on the question that Mr. Neal touched 
on and give you the last minute and 30 seconds to hopefully go 
into more detail. How does the Administration plan to 
strengthen that relationship with countries now who are going 
to be imposed with these tariffs that are not real pleased 
about this process to create a coalition that is working 
together to address the--really, the big problem is the tariffs 
or--China over steel and aluminum.
    So what is your plan, globally?
    Secretary ROSS. Well, first, on the confidentiality 
question, we do have our normal process. Any company that 
wishes to submit proprietary information, it will be treated as 
such and will not be disclosed publicly. So that is a normal 
thing in AD and CVD that will apply equally here.
    Second, as I believe Ambassador Lighthizer probably alluded 
to yesterday, part of the discussion that we will be having 
with countries for their exclusion is the very topic what will 
they do to be cooperating with us against the global 
overcapacity problem.
    The problem is enormously severe. I will give you two data 
points. China's excess capacity exceeds our total capacity. 
China produces in 1 month about as much steel as we produce in 
a year. So it is way, way out of proportion, when you consider 
that they are the second-largest economy, but vastly the 
dominant producer of steel in the entire world.
    Chairman BRADY. Mr. Secretary----
    Secretary ROSS. So it is a global problem, and it is also 
illustrated as a global problem by the fact that, of our steel 
orders, they are not all against China. They are against 34 
different countries. So it is----
    Chairman BRADY. Mr. Secretary, I apologize. The 3 minutes 
goes so fast and we have so many Members who want to question.
    Secretary ROSS. Sorry.
    Chairman BRADY. Thank you.
    Mr. Doggett, you are recognized.
    Mr. DOGGETT. Thank you very much, Mr. Secretary. If I 
understand correctly, you presented President Trump with three 
alternatives to implement this policy on aluminum. One of them 
was global, one of them was targeted. Is that correct?
    Secretary ROSS. Yes, that is.
    Mr. DOGGETT. Okay----
    Secretary ROSS. The targeted one encompassed just China, 
Hong Kong, Russia, Venezuela, and Vietnam.
    Mr. DOGGETT. Right. And if that alternative had been 
adopted, Russia, for example, would be paying three times as 
much tariff as it will under the approach that was accepted.
    Secretary ROSS. Yes. The targeted approach, had it been 
adopted in its original form----
    Mr. DOGGETT. And that is----
    Secretary ROSS [continuing]. Would have put very high 
tariffs on a very----
    Mr. DOGGETT. Although five countries----
    Secretary ROSS [continuing]. Small number of countries.
    Mr. DOGGETT. And that really goes to a broader concern that 
I have. That would have permitted other countries, our allies, 
to maintain the quota of aluminum that they had last year.
    Secretary ROSS. Yes, sir.
    Mr. DOGGETT. Instead, President Trump rejected that 
alternative that would have imposed higher tariffs on Russia 
and these other four countries. Russia, of course, has the 
second-largest aluminum producer in the world. That is headed 
by someone who has repeatedly been denied visas to come to the 
United States because of his connections to criminal 
organizations.
    And I just have to, frankly and respectfully, question your 
comment that the President made clear that his first priority 
is to keep America safe. I don't see anything indicating that 
he is particularly interested in keeping our country safe from 
Russia. Indeed, I have to concur with the comments that I am 
sure you are familiar with that Barry McCaffrey, a decorated 
four-star United States Army General, combat veteran from 
Vietnam, recipient of three Purple Hearts, said within the last 
few days: ``Reluctantly, I have concluded that President Trump 
is a serious threat to U.S. national security. He is refusing 
to protect vital U.S. interests from active Russia attacks. It 
is apparent that he is, for some unknown reason, under the sway 
of Mr. Putin.''
    Now, I know you don't agree with that, but we have had--
since he made that very powerful statement from someone who is 
clearly an American patriot, we have had President Trump 
respond to the attempted murder in Great Britain and to the 
continued Russian assault on our election system by calling and 
congratulating President Putin. He has insulted people all over 
this country, but the one person he has never a bad word about, 
a questionable word about, is Vladimir Putin.
    And it appears that Mr. McCaffrey, General McCaffrey, has 
summed it up rather well, and that, if anything, the approach 
taken with these aluminum and steel tariffs is very consistent 
with the approach of always coddling Russia and never calling 
it out for its attempt to steal our democracy.
    Chairman BRADY. Thank you. The gentleman's time has 
expired.
    Mr. Roskam, you are recognized.
    Mr. ROSKAM. Thank you, Secretary Ross. Getting back to the 
232 process, it is my understanding that the product exclusion 
request only allows an exclusion for one product at a time, 
even if the only difference in that product is size, such as 
the different diameters of steel wire.
    I represent suburban Chicago, and we have a lot of small 
manufacturers. And they will have--you know, one company, as 
you know, will have hundreds and hundreds of products. How do 
you contemplate that? That seems foolish, as it is presented 
now. I would assume that there is more to this story, and that 
you are not requiring a company to submit hundreds of 
petitions.
    Similarly, maybe you could also answer this. Surely there 
is a way for industry groups to join together, you know, just 
in terms of expediting this. Could you speak to that?
    Secretary ROSS. Right. Well, first of all, we can grant 
blanket requests, in that if it is pretty obvious from the 
request that we have received that a particular item is 
generally regarded as being unavailable, we can grant blanket 
requests.
    Now, that won't be the rule, but there will be situations 
where we will. And we could do that based on the submission of 
an individual company. So in the normal course, we think that a 
lot of the requests will be extremely specific products that 
are peculiar to a particular end use, and maybe one or two 
companies needing the material. Ones that have broader impact 
we do have the ability to deal with in a broader way.
    But we need specificity, because in order to tell Customs 
and Border Protection how to implement, we need the Harmonized 
Code number of the individual product. That is the only way 
that they can track it. So while I would have preferred a 
somewhat less bureaucratic system, it is not an alternative 
that we really have. It is the only mechanical way that we can 
implement.
    Mr. ROSKAM. I think that is something to take in. I mean, 
the burden locally will be enormous if that is not spoken to 
and remedied in some way. I am sure that is not lost on you, 
but there were ashen-faced looks around the room recently at a 
company that I was visiting not long ago when they were 
thinking about this process. And it just seemed completely 
overwhelming.
    I have made my point; I yield back.
    Secretary ROSS. Well, it is the best we could do, sir.
    Chairman BRADY. Thank you. To balance this out, we are 
going to go to two-to-one questioning.
    Mr. Buchanan, you are recognized.
    Mr. BUCHANAN. Thank you, Mr. Chairman, and thank you, Mr. 
Ross, for being here today. And thank you for your leadership.
    Let me ask you, talking about other topics, Florida, it is 
about a $12 billion industry in terms of the economic impacts--
fruits and vegetables. I talked to a grower yesterday. You 
know, in the last 2 years--I know we put an agreement in place 
on anti-dumping. I think we are looking at another one. It has 
impacted us, our business. The industry is down 22 percent. 
Yes, we are down 22 percent, Mexico is up 14. That's a 34-point 
spread. It has a huge impact, I will tell you, on jobs and a 
lot of businesses throughout Florida. Fruits and vegetables, 
but I am--in terms of tomatoes in my region, it is one of the 
largest--we are one of the largest growers in that. And many of 
them are going to have to close up--or that is what they claim, 
anyway.
    I was interested in your thoughts about what we are doing 
on anti-dumping. I know we are talking about steel and 
aluminum, my colleagues, but I am interested in this aspect of 
it while we have you here today. And I will mention we have the 
same growing season as Mexico, so we are very concerned as we 
work through this NAFTA deal.
    Secretary ROSS. Right. Well, as you know, before moving to 
Washington, I was a Florida resident, and I met extensively 
with the tomato growers and other growers there.
    And it was partly at my suggestion that we included in the 
NAFTA talks the question about seasonality of measurement, as 
opposed to just annual measurement of the import situation of 
those products. I don't know that that has been resolved yet in 
the NAFTA discussions, but we are keenly aware of the problem 
of seasonality, and the potential that that has to lead to 
very, very disruptive end results for the growers. So we are 
focusing on it.
    Mr. BUCHANAN. Are you working on an additional anti-dumping 
requirement or something? Do you know where that might be? I 
know something got put in place a couple of years ago, but 
people are concerned what was put in place is not working. And 
under the current negotiation, is that something that is being 
considered?
    Secretary ROSS. Yes, at the request of the growers in the 
States, particularly the Florida growers, we have initiated a 
reset of discussions of the present arrangement with the 
Mexicans.
    Mr. BUCHANAN. Thank you, I yield back.
    Secretary ROSS. And that is underway as we sit here.
    Mr. BUCHANAN. Thank you.
    Chairman BRADY. Thank you.
    Mr. Kind, you are recognized.
    Mr. KIND. Thank you, Mr. Chairman.
    Mr. Secretary, thanks for being here with us today. I am 
sure we are going to learn more--I am over here.
    Secretary ROSS. Oh, sorry.
    Mr. KIND. I am sure we are going to learn more about the 
Administration's 301 decision against China later today, when 
you make that announcement. And there is no question China has 
not been a good actor in many of the rules of trade.
    My problem, however, has been the unilateral approach. I am 
not convinced that China, when they are mis-practicing trade 
and not abiding by the rules, is only doing that to 
discriminate against U.S. interests or U.S. companies. This is 
on a global basis. And there is an opportunity for you, this 
Administration, to work with us to try to build a multilateral 
coalition to isolate China, which I think would have a more 
meaningful impact, from China's perspective, rather than just 
this Administration, this country taking action. So I encourage 
you to explore that with us and work with us in order to do 
that.
    But back to the 232 national security decision on steel and 
aluminum, you know, many of us have been concerned about the 
whole process from the beginning, that it was ill-considered, 
chaotic, confusing, the classic case of shoot, fire, aim. Now 
we are trying to backfill exemptions for products and for 
countries that are still ill-defined and confusing.
    The one thing businesses in America hate most is 
uncertainty. Many of them are complaining that the process is 
going to be very narrow and tedious. Our friends and allies 
that this may apply to are scratching their heads, wondering 
why they potentially could be singled out.
    And, again, it is the unilateral basis that this 
Administration has decided to pursue with trade policy that is 
very troubling. We do need friends and allies around the globe. 
We need to be a leader in developing a rules-based global 
trading system. Leading, rather than following or isolating, as 
the case may be.
    As an example, on 232 and the national security reason, I 
and Representative Mike Coffman sent you, along with 44 other 
bipartisan Members of Congress, a letter last year talking 
about certain aluminum that has absolutely no national security 
application to be exempted. The rolled can sheet, the primary 
aluminum, I even had a conversation with you following up with 
a letter, and I feel we didn't get an adequate response, even 
though it is currently on the list.
    And if this is the type of feedback or the type of 
partnership that we are going to get from the Administration, 
coming to us asking for a 3-year extension on TPA is going to 
be a pretty heavy lift because of the lack of responsiveness.
    And if we are going to go down this road of invoking 232 
for national security implications, especially with products 
that have absolutely no application, what is to prevent other 
countries from invoking their own national security reasons to 
exclude our exports?
    I mean, I have heard arguments from Europe all the time to 
justify trade barriers to our agriculture products because of 
the food security system that they were trying to protect. And 
this is an area of the world that knew massive starvation 
during two world wars. So that is problematic, that other 
nations now will see a door open to them to invoke national 
security to erect protectionist measures. And it is something 
many of us are deeply concerned about.
    Secretary ROSS. Well, I----
    Chairman BRADY. Thank you.
    Mr. Secretary, I apologize. Time is expired.
    Mr. Smith, you are recognized.
    Mr. SMITH OF NEBRASKA. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here. I represent the 
number-one agriculture district in the Nation, so it certainly 
stands to reason that I would share the concerns of my 
constituents on the tariffs, and the various impacts that may 
take place.
    As you know, Secretary Perdue has said--or he mentioned 
that agriculture and ag products are always the tip of the 
spear in any type of retaliatory action. And I--let me just 
suggest that our agriculture economy is certainly not in a 
position to absorb any spears at this point, given the 
sensitive nature of and kind of the downturn in the ag economy 
that has been in place for longer than we would prefer, 
certainly.
    Can you reflect a bit on assurances you can give us that 
the Administration has considered rural communities, rural 
economies, and their--and our interests in considering what 
impact the tariff moves might have?
    Secretary ROSS. Well, as you know, I work very, very 
closely with Secretary Perdue, and worked very hard on getting 
the beef exports going again to China, worked very hard on 
trying to open up some of those markets in South America, and 
worked hard to deal with the sugar problem from Mexico. So it 
is not that there is any lack of focus on trying to help 
agriculture.
    I will also mention, in the context of the question of your 
colleague from Florida, the work that we have done trying to 
work on the seasonal, as opposed to annual, measurement of 
agricultural imports.
    We have also put a lot of pressure on about sanitary and 
phytosanitary non-science-based constraints that other 
countries put on our products.
    So it really wouldn't be fair to say that the 
Administration has neglected agriculture. Agriculture has been 
a very important part of our activity----
    Mr. SMITH OF NEBRASKA. Sure, and I would reflect--I mean, I 
would agree that the Administration, I think, has worked hard 
for agriculture. I am wondering if there is any sort of 
analysis that exists that could point to that recent action or 
actions to come which will not actually harm or set us back on 
some of the advances we have made more recently?
    Secretary ROSS. Right. Well, in terms of retaliation, there 
is no way to forecast exactly what a given party would do. But 
what I would say is--the rest of the world cannot feed itself. 
We have--we all know that. They really need imports from those 
countries like the United States that are very good at 
agriculture.
    What that means, if a country tried to impose restrictions 
on a particular crop from the United States, it probably would 
raise their own cost, because there isn't a country in the 
world who pays us one penny more for any of our produce than 
the lowest price that it could get from somewhere else. Nobody 
does us a favor.
    Chairman BRADY. Thank you. The time has expired.
    Mr. SMITH OF NEBRASKA. Thank you.
    Chairman BRADY. Ms. Jenkins, you are recognized.
    Ms. JENKINS. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for being here this morning.
    Last spring, in a similar hearing to this one, I voiced my 
concern to Ambassador Lighthizer about using national security 
as a basis for trade restrictions, since this action could lead 
to retaliation if another nation follows suit and restricts its 
imports of U.S. products, like sorghum and soybeans, using the 
same rationale.
    While it is a good step to implement an exemption process 
that many Members here requested for our allies and trading 
partners following the proposed steel and aluminum tariffs, my 
concerns have only grown, especially since other nations are 
indeed preparing a retaliation list targeting farm products.
    Secretary ROSS. Right.
    Ms. JENKINS. Now, Mr. Secretary, you have made comments 
recently about farm families and ranchers who--I quote--
``scream and yell when their nerves get rattled by the 
Administration,'' and you mentioned that they even go so far as 
to write to their Member of Congress. You may not be aware, 
however, that the State of Kansas just last week declared a 
statewide drought emergency for all 105 counties, or that 
blizzards roll through at a moment's notice, or that we have 
had multiple years of large wildfires, some which have blazed 
an area many times larger than the entire District of Columbia.
    Kansans depend on selling their products abroad. The value 
of all Kansas ag exports total $3.7 billion, even with a State 
with a population of fewer than 3 million Kansans. Ag 
represents 7 of the top 10 exported products from our State. 
This includes wheat, which is one of the second-most valuable 
international exports from Kansas, trailing only our plane 
manufacturing. And prior to NAFTA, Mexico imported an average 
of 11.5 million bushels of wheat from the United States. After 
NAFTA, we have seen a nearly tenfold increase to 110 million 
bushels.
    And on the national scale, half of the wheat grown in the 
United States is exported, so half of growers' market is 
foreign consumers.
    So my constituents' livelihoods depend on both Mother 
Nature and foreign markets. So I am just curious. Why do you 
think American farmers and the ag industry are so nervous when 
it comes to NAFTA or sudden tariffs? And do you know how many 
American agriculture heartland--how much they depend on these 
exports?
    Secretary ROSS. I will answer very briefly. First of all, 
there is no sign that any of these other countries have 
practiced restraint before we invoke national security. They 
are doing what they wish to do. Every other country that I am 
aware of is much more highly protectionist than the United 
States. They all talk free trade, and they all practice very 
protectionist activities.
    Chairman BRADY. Mr. Secretary, the--I am sorry. Again, the 
3 minutes goes quickly. The time is expired.
    Mr. Pascrell.
    Mr. PASCRELL. Thanks for coming today, Mr. Secretary. When 
you look at any chart of how close we are linked with China, it 
becomes quite obvious. The G20 countries, they--with China as 
the top five export destination, this is something we can't 
ignore. When you look at the relationship between the--our S&P 
500 and the Shanghai Stock Exchange composite, they are not 
going to get rid of us and we are not going to get rid of them.
    We know that the central problem here, in many countries 
besides China, is subsidizing their production.
    Secretary ROSS. Right.
    Mr. PASCRELL. No question about it. And we have to zero in 
on that. I think you would agree with that.
    Secretary ROSS. Yes, I do.
    Mr. PASCRELL. The over-capacity and the flood of cheap 
imports from countries sometimes like China needs to be 
addressed very, very closely.
    I and many Democrats in Congress have a strong record on 
calling out China for their trade cheating. It is on the 
record. And we have passed bills to hold them accountable on 
currency and on steel dumping. Republicans have not done much 
of anything up to now to confront this issue. In fact, what we 
have done is paid corporations and subsidized the corporations 
to get out of the country. It is written in our budgets. That 
is unacceptable.
    They, the Republicans, passed a tax bill that promotes off-
shoring. So we are talking out of both sides of our mouths 
here. We want to defend the American worker, and at the same 
time we are making it easier for companies and corporations to 
move. I don't think that this works at all.
    I strongly support enforcement of U.S. trade laws. There 
has been a lot of discussion about how the 232 steel and 
aluminum tariffs that the President imposed may start a trade 
war. No one wins a trade war. But I know one thing. Under 
article 1, section 8, this Congress and the very people in this 
room should have the most to say about what direction we go in 
in trade. It is very, very clear.
    Can you please explain whether these tariffs could trigger 
a trade war, as you perceive it?
    Secretary ROSS. Well, as I indicated before, there is no 
indication that the other countries have practiced any 
restraint before we did the action that we are about to take. 
Whether they will respond and, if they do, in what form, no one 
really knows. But I don't think that, whether we call it 
national security or something else, is going to have any 
impact whatsoever on the nature of their response. They are 
going to respond in whatever they think will be the most 
politically hurtful way to us.
    Mr. PASCRELL. Thank you, Mr. Secretary, for your 
forthrightness.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you, Mr. Pascrell.
    Mr. Paulsen, you are recognized.
    Mr. PAULSEN. Mr. Chairman, just to follow up on my 
colleague, Sam Johnson, when he had his interaction with you, 
if you read further on the memo--the Secretary of Defense--it 
is very clear that the Department of Defense is concerned about 
the approach that is being taken here. It says, ``Therefore, 
DoD does not believe that the findings in the reports impact 
the ability of DoD programs to acquire the steel or aluminum 
necessary to meet national defense requirements. DoD continues 
to be concerned about the negative impact on our key allies 
regarding the recommended options within the reports.''
    But let me go this way, Mr. Chairman and Mr. Secretary. 
Look, I don't believe this is the right approach to implement 
these tariffs. I can't stress enough, though, the importance of 
making sure we are limiting the impact of these tariffs on 
metal-consuming companies and their workers who, you know, in 
the end could be very less competitive globally by higher 
prices. And having an exclusion process that is fair, and 
grandfathering in existing contracts, is critical.
    I am hearing from small manufacturers in my State of 
Minnesota. I have Harvey Vogel Manufacturing Company. They are 
located in Minnesota. They specialize in metal stamping and 
fabrication. And they say they are already seeing pretty big 
price increases from their suppliers because of the threats of 
these tariffs coming into place.
    And they also say their customers now are worried about 
what the future holds. And for them, they are a company that 
says the tariffs are now even probably the top trade issue, 
aside from the uncertainty that they have had around NAFTA. We 
are a border State and we have a lot of trade with Canada and 
Mexico, obviously.
    And then, as I mentioned yesterday when Ambassador 
Lighthizer was here, R&M Manufacturing, which is also a 
Minnesota small business, they have set contracts. They clearly 
say they will not be able to re-negotiate with their larger 
customers, regardless of material costs, which are going up.
    So I just have a strong concern about lost manufacturing 
jobs, just as happened historically, if history is our guide, 
back in the early 2000s, when this was done before.
    But, Mr. Secretary, can you just briefly dive into this a 
little bit about--and explain maybe? Has the Department really 
analyzed the broader supply chain economic effects that the 
tariffs could have in terms of job loss downstream in other 
industries, or on consumer prices, in general?
    Secretary ROSS. Yes, we have. In fact, we handed out, I 
believe, to each of the Committee Members a series of charts 
showing the interaction between steel prices and aluminum 
prices, historically, on auto production, on recreational 
vehicles, on construction, on a whole variety of industries.
    And we also have done our own analysis and have studied 
analytical reports by various other parties and have come to 
the conclusion that there, in the aggregate, will not be 
material damage inflicted. Indeed, this is a very small segment 
of the economy. The total tariffs that we were originally 
talking about before any exclusions for countries or products 
is less than one-half of 1 percent of the economy.
    Chairman BRADY. Mr. Marchant, you are recognized.
    Mr. MARCHANT. Thank you, Mr. Chairman. Thank you for being 
here, Secretary Ross. There have been quite a few press reports 
about the pending section 301 action. And I was hoping that you 
could shed some light on the process within the Commerce 
Department with regard to that investigation.
    Secretary ROSS. The Commerce Department supplied a lot of 
the analytical materials, as well as specific comments on 
specific aspects of the 301 to Ambassador Lighthizer. The U.S. 
Trade Rep, as you are aware, is the lead on 301 investigations. 
But we put in endless hours on various of these specific 
remedies that you will hear being announced, and participated 
extremely actively in the inter-agency process with Ambassador 
Lighthizer and with other parts of the Administration.
    Mr. MARCHANT. So has Commerce conducted an analysis of the 
supply chains that will be affected by those tariffs?
    Secretary ROSS. By the 301s? Yes, sir.
    Mr. MARCHANT. And----
    Secretary ROSS. We have looked at--and you will hear when 
the announcement is made--I think you will get a flavor for 
what it is--the remedies that are being sought. And then we can 
have a very fulsome discussion.
    Mr. MARCHANT. Okay. So we will be--at some point we will be 
able to get those studies.
    Secretary ROSS. Well, at some point the tariff--the 301 
action will be announced, and it wouldn't be very surprising if 
this Committee and others would request that we come and 
explain it.
    Mr. MARCHANT. Did the analysis include an evaluation of 
available capacity in other markets?
    Secretary ROSS. Well, I can't answer that in detail without 
getting ahead of the President and his announcement. But I can 
promise you there is a huge amount of analysis that went into 
it.
    Mr. MARCHANT. I am assuming that Commerce believes that the 
proposed tariffs will have the effect of pressuring China to 
change its policies.
    Secretary ROSS. Our--the hope always in tariff imposition 
is to modify people's behavior, yes.
    Mr. MARCHANT. Okay. Thank you, Mr. Secretary.
    Chairman BRADY. Thank you, Mr. Marchant.
    Mr. Higgins, you are recognized.
    Mr. HIGGINS. Thank you, sir. The United States produces 
two-thirds of the steel it uses. Steel production today is no 
longer labor-intensive, it is capital-intensive. It is through 
innovation. Steel is being made that is cheaper, lighter, 
stronger, and cleaner. China produces only about 2 percent of 
the steel used in the United States. So I think this debate is 
a small piece of a much larger problem.
    Mr. Secretary, you are known throughout all the financial 
journals as being a big global thinker. You are one of the most 
influential global thinkers in America. And when you look at 
the United States-Chinese economic relationship, it is a $600 
billion relationship, annually. There are 275 Chinese students 
who are studying in America, 25,000 American students studying 
in China.
    Last year, Chinese investment in the United States for the 
first time exceeded United States investment in China. China is 
number one in patent production, which is an important 
indicator of future economic growth. But it is a place that 
America held for over a century. We got overtaken by China. We 
got overtaken by China.
    China is moving from a manufacturing assembly economy to a 
knowledge-based economy.
    People here are always whining about China, Democrats and 
Republicans. They cheat on their currency, they treat their 
people poorly, they have a horrible human rights record. Their 
water and air quality is deplorable. But you know what they do? 
They invest in the growth of their own economy.
    China just invested or is investing $1 trillion to open up 
the Chinese economy to 60 countries in Europe, in Africa, in 
Asia, and Latin America, $1 trillion. They are positioning 
themselves for future economic growth. We have an 
infrastructure bill that is $200 billion over 10 years. It is 
equivalent to the amount that American taxpayers financed for 
the rebuilding of Iraq and Afghanistan.
    Sir, you have a global vision. Please admonish this 
President and this Administration to do better to position the 
United States to compete, because the United States can compete 
effectively with any country in the world, so long as there is 
a level playing field. What are your thoughts?
    Secretary ROSS. It is not quite correct, sir, to say that 
Chinese exports of steel and aluminum are as limited as you 
indicated. As I mentioned before, they dislocate a lot of 
production from other countries to us. They also veil the 
exports to us through transshipment with or without 
additional----
    Mr. HIGGINS. Respectfully, sir, it is still a small part of 
a much larger problem. But I respect your----
    Secretary ROSS. Well, it is. The problem is huge. And the 
232 actions are only part of a mosaic for dealing with it. You 
will hear more about China--a lot more--in the 301.
    Chairman BRADY. Time has expired.
    Mr. HIGGINS. I yield back, thank you.
    Chairman BRADY. Mrs. Black, you are recognized.
    Mrs. BLACK. Thank you, Mr. Chairman.
    And thank you for being here, Mr. Secretary. So much has 
already been said about China, we all feel that way, that we 
must--it is past time that we must do something about their 
operation and the way in which they operate, unfairly 
subsidizing state-owned enterprises and throwing barriers up 
for American products.
    And so I want to go back again to what has already been 
talked a little bit about, and that was--or talked a lot about, 
and that is the tariffs on steel and aluminum. In particular, 
in my district, Electrolux has a plant in the district of 
Springfield, which produces kitchen products. And this is a 
rural part of Tennessee. The plant employs over 2,500 full-time 
employees, which are drawn from all over the area. And the type 
of manufacturing plant--jobs that this plant provides really 
are sought not only by communities here in our country, but 
also all over the world. So, in short, this plant is very 
important to Springfield and the region that I represent in 
Tennessee.
    Earlier this year, Electrolux had announced that they were 
investing $250 million into a Springfield plant. That $250 
million represents a huge investment in our community. They 
now, because of their concerns over the steel, have held up 
that investment and are not moving forward.
    So my question is what can I say to them, what can I say to 
the leaders of Electrolux to help to allay the fears that they 
have so they will once again invest in the community? And what 
should be the process that I tell them, moving forward, could 
help them allay those fears?
    Secretary ROSS. Well, I certainly agree with you that fear 
of the unknown is one of the worst fears that people can have. 
And uncertainty about environment, the regulatory environment, 
the tariff environment, is a huge concern to business people.
    I think when you see the actual details of the President's 
announcement, both on 232s and on the 301s, then you will be 
able to see a much more clear picture of what is actually going 
to happen. And I think it will clear the air a lot.
    Mrs. BLACK. Well, that makes me feel a lot better because I 
can tell you in these little rural communities it is very 
important. And 2,500 full-time jobs is a huge loss in our 
community.
    Secretary ROSS. Surely.
    Mrs. BLACK. Thank you, and I yield back the remainder of my 
time.
    Chairman BRADY. Thank you.
    Mr. Kelly, you are recognized.
    Mr. KELLY. Thank you, Mr. Chairman.
    Mr. Ross, thank you so much for being here. In addition to 
that, thank you for stepping out of a very successful and 
comfortable life to come and serve your country. This is 
incredible. Listen, I have great respect for everybody on the 
dais, but there is nobody that has more depth and experience 
and knowledge when it comes to steel and aluminum than you do.
    One of the questions I do have for you--you referenced in 
your opening remarks electrical steel, and we are down to one 
producer of electrical steel in the country. I am very close to 
that, and I mean within a half-mile of AK Steel. We produce the 
finest electrical steel in the world and have thousands of 
employees.
    And the question comes up that, while that--the last 
producer, in the product codes--and this is where I am trying 
to understand them. You can help me with this, I am sure. You 
know, AK is really--they are very supportive of the 232 remedy 
that the President put in place, but they feel it has submitted 
several product codes that are basically just allowing 
electrical steel to be stacked, wound, and slit, and that 
allows foreign producers to easily circumvent the 232 remedy. 
So I know you are aware of these things, I just call it to your 
attention. We would love to work with you on that.
    The other point that I think we need to make is in 
addition--many of us support the action the President took to 
give Canada and Mexico special treatment. However, we can't 
allow them or any future exempt country, for that matter, to 
become a conduit for transshipment.
    One of the other things--I know you are going to answer, we 
have so little time to talk--thank you. I have sat here for 8 
years and listened to everybody talk about what we should be 
doing about this trade imbalance. You and the Administration 
are the only ones that have actually done something. So actions 
speak louder than words. Thanks for what you are doing. And I 
really welcome any type of work we can do together to protect 
that plant and make sure that we have electrical steel produced 
in this country.
    Secretary ROSS. Thank you. As you are aware, AK supports 
our program.
    Mr. KELLY. Absolutely, yes. I am. The only question I think 
they have is on the stack steel, the electrical steel stack----
    Secretary ROSS. Yes.
    Mr. KELLY [continuing]. That can be slit and wound and 
somehow put into the core of transformers.
    Secretary ROSS. And that raises a good question. One of our 
intentions is, as we locate potential sources of circumvention, 
to bring separate actions against those. Because, as you know, 
we have waged a lot of wars against circumvention already.
    I am well aware it isn't just the steel, it is the end 
product----
    Mr. KELLY. Right.
    Secretary ROSS [continuing]. Of the transformers that can 
be the big problem, and subcomponents within it. And I promise 
you we will not ignore that.
    Mr. KELLY. Okay. And anything we can do to help, please let 
me know. And I will give you the data that AK has given me, but 
you probably had it long before I did.
    But thank you so much for your service. Again, this is very 
refreshing to have somebody that actually knows something about 
this product and what is going on in the world, as opposed to 
people who run for office who don't have a clue of what is 
happening. Thank you.
    Secretary ROSS. Thank you, sir.
    Chairman BRADY. Ms. DelBene, you are recognized.
    Ms. DELBENE. Thank you, Mr. Secretary, for being with us 
today. I have an aluminum smelter in my district that almost 
had to close, so I am definitely well aware of the issues of 
Chinese over-capacity and how that has depressed global--the 
global market and prices and undercut American workers and 
businesses.
    It is clear that something needs to be done to address the 
problem of over-capacity. But, as many of my colleagues have 
noted, it is extremely important that any action the 
Administration takes is targeted specifically to the source of 
the problem--in this case, definitely China.
    In order to truly address the problem of Chinese over-
capacity, we need to work with our allies like the EU, Japan, 
and Korea, and use multilateral fora such as the G20, the G7, 
and the OECD, to develop a coordinated strategy. Do you agree 
with that?
    Secretary ROSS. I believe we do have a coordinated 
strategy. I believe I have tried to describe it. The exclusion 
process is intended to do the fine-tuning that is necessary to 
make sure that we minimize any unintended consequences.
    Ms. DELBENE. But you met with Commissioner Malmstrom from 
the EU recently. And would they feel like there is a 
coordinated strategy happening?
    Secretary ROSS. Yes. I think the actions we have taken will 
produce coordination with other countries. You probably saw the 
press release that she and I put out after our meeting and the 
one that we put out the day before, jointly with my counterpart 
from Germany. We think that the EU, in a whole variety of 
different ways, is part of the problem.
    Steel that comes in in the form of an automobile from 
Germany is every bit as much a problem as steel that comes in 
as steel.
    Ms. DELBENE. A couple of quick questions. I have a 
technical question for you. The President ultimately decided on 
tariffs at 25 percent for steel and 10 percent for aluminum. 
Will the Administration be updating those numbers, based on the 
number of country and product exclusions that might come out, 
and the impact that those have?
    Secretary ROSS. As it becomes more clear what is the extent 
of exclusions, both country and exemptions and product 
exclusions, we will present to him the consequences of those 
exclusions for the steel and aluminum industries, and he will 
decide whether it warrants imposing further tariffs on the 
countries that are still hit and on the products that are still 
hit.
    Ms. DELBENE. Thank you. And one quick question. Will there 
also be an exclusion process on 301, similar to 232?
    Secretary ROSS. I really don't want to get ahead of the 
President on 301. He will be making an announcement in the 
relatively near future, very near future. And that is the time 
when we should have discussion.
    Ms. DELBENE. Thank you.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you, Ms. DelBene.
    Mr. Renacci, you are recognized.
    Mr. RENACCI. Thank you, Mr. Chairman, and Secretary Ross, 
thank you for being here and for your testimony today. I would 
like to tell you about one of the many great companies in my 
district and their specific concern.
    The MK Morse Company is a family business that consumes 
steel in its manufacturing of saw blades. All of the 
manufacturing is done in Canton, Ohio, by their 485 employees. 
When possible, they source their raw materials domestically 
because of freight costs, currency risk, lead time, and their 
commitment to U.S. manufacturing. However, in many cases they 
must rely on foreign sources for their high-speed, steel-edged 
wire, steel strip back, or carbon steel strip, and hardened and 
tempered steel.
    Morse is one of the few saw blade manufacturing companies 
remaining in the United States, but they do not produce enough 
volume to attract the interest of U.S. steel companies. So they 
are required to source some of their steel from our foreign 
allies, whose steel mills focus on the saw blade industry, and 
therefore are capable of producing materials to exacting 
quality requirements.
    Secretary Ross, my question for you is President Trump's 
steel proclamation includes reference to chapters 72 and 73 of 
the Harmonized Code, which are steel only. Saw blades are in 
chapter 82, and are not referenced. This is why Morse believes 
their competitors manufacturing outside the country will not 
incur the tariff when they export their steel-based product to 
the United States. And, frankly, I am concerned that companies 
and positions similar to Morse may be incentivized to move 
their manufacturing operations outside the country.
    So, in your conversation with U.S. manufacturers, how are 
you addressing the effect that these downstream implications 
could have on U.S. manufacturers?
    Also, what steps might the United States take to prevent 
the potential issue from becoming a real problem?
    And, finally, is there any message you would like to relay 
to all the concerned manufacturers back in Ohio who make up the 
State's largest sector by GDP?
    Secretary ROSS. Well, as you know, I have been in a variety 
of manufacturing businesses during my private-sector life. So I 
am keenly aware of the problems at the various different levels 
of the chain of supply. And those that are in the kind of 
circumstance that you describe probably are the ideal 
candidates, in concept, for exclusion.
    I also mentioned that we are mindful that taking product to 
another level of manufacture is one of the favorite ways that 
people circumvent our activities. We intend to deal with those 
in separate proceedings, anti-dumping and CVD proceedings.
    So this is not the last that you will hear about our 
solutions to the steel and aluminum problems, or any other 
problem.
    Mr. RENACCI. Well, thank you, Secretary Ross. And I, too, 
want to thank you for stepping out of the private sector and 
taking the position you are in. Thank you for your service.
    Secretary ROSS. Thank you, sir.
    Chairman BRADY. Thank you.
    Mr. Meehan, you are recognized.
    Mr. MEEHAN. Thank you, Mr. Chairman.
    Mr. Secretary, I give you credit for taking on the issue of 
Chinese dumping. But, of course, the implications of how you do 
that affect a lot of American-based businesses. American Keg is 
a developer of steel kegs, or aluminum kegs, the last in the 
United States. It competes against foreign imports. The problem 
is that its finished goods are not subject to tariffs, it is 
just the raw materials coming in. So they are now at a 
competitive disadvantage.
    I was intrigued by your comment about an automobile that 
comes in with finished steel or manufactured steel as another 
way of getting into the country. Are we going to be able to 
deal with companies that are going to be impacted like this, 
like American Keg, who will--are looking at laying off workers 
because a foreign keg can come in now at a disproportionate, 
you know, cost?
    And let me ask, as well--one more that is just 
industrywide. I have Ball Manufacturing, another steel company 
in my district that uses the sheet aluminum to make beer cans. 
Now, they will be one of a number of companies, but that 
industry alone could be looking at 1,500 applications to you 
just for can manufacturers.
    How can we simplify it so we can do it by industries or 
things like that, so that you have the capacity to be able to 
contemplate these and help create a level playing field for 
all?
    Secretary ROSS. Well, as I mentioned in response to an 
earlier question, we have to go by Harmonized Codes, because 
that is the only way the Customs and Border Protection can 
implement. So, unfortunately, we have to go number by number. 
And, literally, some of these codes are 10 digits long. But 
that is what they need for their computer system to be able to 
implement.
    On the specific question of----
    Mr. MEEHAN. Well, can trade associations and others talk 
for similarly situated businesses, so a determination could be 
made that then could be applicable to other kinds of similar 
businesses?
    Secretary ROSS. Well, as I mentioned, if we get an 
individual request from an individual company that is truly 
representative of an industrywide problem, we can deal with it 
on a broader basis. The powers delegated under the proclamation 
are quite broad.
    As to beverage cans themselves, as you are aware, it is my 
view that these tariffs, even forgetting the exclusions and 
exemptions, will have a trivial effect, a fraction of one penny 
on a can of Campbell's soup, on a can of Budweiser, on a can of 
Coca Cola. And it is similarly small increments on many other 
things.
    So that doesn't answer all the problems, but I think we 
need to put it into perspective. The total metal content of a 
can is two or three pennies, depending on the can size and the 
particular material used. So putting a tariff on a portion of 
that, it really is relatively small in the overall scheme of 
things.
    Chairman BRADY. Thank you, Mr. Meehan.
    Ms. Chu, you are recognized.
    Ms. CHU. Secretary Ross, I am going to drastically change 
the topic here, and ask a question that has been asked of my 
office nearly every day, and that is about the census.
    The Census Bureau, of course, is under your purview, but it 
has been reported that the Department of Commerce is 
considering asking--adding a citizenship question to the 2020 
Census. And there is a lot of worry by immigrant stakeholders 
that adding this question will create a lot of fear, that many 
immigrants will fail to respond to the entire questionnaire, 
fearing that their legal status will come under scrutiny. There 
are many that argue that the numbers reported from the census 
will be more inaccurate, and that it will be more difficult to 
provide benefits and resources for low-income communities who 
are afraid to be counted.
    In fact, I have heard from many entities, including the LA 
County Board of Supervisors who unanimously wrote to Congress, 
urging opposition to the inclusion of the citizenship question, 
highlighting that LA County already faces great challenges in 
counting minorities, immigrants, and hard-to-survey 
populations.
    And in the 2010 Census, more than 113,000 Latino children 
in California and 47,000 Latino children in LA County were not 
counted, according to one survey that was done.
    So these inaccuracies make it hard and difficult for our 
government to administer important Federal safety net programs, 
such as WIC, SNAP, and TANF. Can you tell me whether the 
Department of Commerce plans to include the citizenship 
question in the 2020 Census?
    Secretary ROSS. The Department of Justice, as you know, 
initiated the request for inclusion of the citizenship 
question. We have been talking on the phone and received 
written correspondence from quite a lot of parties on both 
sides of that question. There are many, many subquestions about 
accuracy, about suppression of responses that we are taking 
into account.
    We have not made a final decision as yet, because it is a 
very important and very complicated question. We will make a 
decision by March 31st, which is the date on which we are 
required to report to the Congress the final questions for the 
2020 decennial census.
    Ms. CHU. And I understand that this question has not been 
tested, which is usually the tradition with the Census Bureau 
also. I wanted to know whether you have factored in the 
additional cost of adding this question, this untested 
question.
    Secretary ROSS. The cost is one of the considerations. The 
comparison with the American Community Survey and annual 
sampling, which does ask the question, is another 
consideration. There are probably 15 or 20 different, very 
complicated issues involved in the request. Because it is from 
the Department of Justice, we are taking it very seriously, and 
we will issue a fulsome documentation of whatever conclusion we 
finally come to.
    Chairman BRADY. Thank you. Mr. Secretary and Members, we 
have 2 minutes left in the first of four votes. This is an 
important hearing. We will reconvene, Mr. Secretary, 
immediately after votes. Thank you for your patience.
    The Committee stands recessed until immediately after 
votes.
    [Recess.]
    Chairman BRADY. The Committee will come to order.
    Thank you, Mr. Secretary, for your patience during the vote 
series. We will resume with the questioning by Mrs. Noem.
    You are recognized.
    Mrs. NOEM. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for taking the time to be with us today.
    In South Dakota we have a lot of pride in handling tough 
situations. We are pretty remote, so our transportation costs 
are pretty high. We consume a lot of energy, because we don't 
have a lot of options. And we also deal with a lot of tough 
weather. And so we know, when it comes to agriculture, which is 
our number-one industry in this State, that it provides 20 
percent of our State's jobs. And it explains why so many of my 
constituents are really concerned about the tariffs in section 
232, and what retaliatory measures could be taken against our 
American goods.
    But, Mr. Secretary, their biggest concern--because I am a 
lifelong farmer and rancher, and so these are my people and my 
family and my community members, everybody across the State--
what concerns them is what appears to be a lack of concern on 
your part about what these measures--how they could impact the 
ag economy.
    And just this last week you said that we should judge 
results, instead of looking at theories. But I want to point to 
an example which proves that my constituents aren't just scared 
of theories.
    On January 22nd the Administration announced new tariffs on 
washing machines and solar panel technology. Then, on February 
4th, less than 2 weeks later, after the Administration's 
announcement, China launched an anti-dumping and anti-subsidy 
investigation into imports on American sorghum.
    Also, the Wall Street Journal reported yesterday that China 
is already targeting soybean and live hog exports for their 
next action. And it is not just happening with China. The 
European Union also is featuring agriculture in its draft 
retaliation measure list for the section 232 tariffs.
    And with soybeans being 27 percent of my State's economy, 
we also know that it is $1.3 billion of exports out of South 
Dakota in 2016, but Brazil and Argentina, they had less than 15 
percent of the export market worldwide back in 1980. Now they 
have over half. We know they are ready and standing, waiting to 
take up any kind of market space that opens up. And that is 
what the big concern is for a lot of my producers.
    So with all of these new tariffs that are being put into 
place, I would really like to know whether or not there is a 
lot of time being spent by the Administration, by you, and by 
your individuals that are--serve under you on what kind of 
impacts this could have on agriculture, considering we are 
already in a devastating commodity market, we are already 
facing huge challenges in agriculture. And now, if we have some 
of these measures going forward from other countries, I don't 
know if we will survive.
    Secretary ROSS. Well, we are well aware of the potential 
problem. It is something we are giving great consideration to. 
And you will be hearing a little bit later today more about the 
actual exemptions, the exemption process for countries from 
232, and you will be hearing later today more details about the 
301. So pretty soon some of those questions will be answered.
    Mrs. NOEM. Okay. I would encourage you to keep agriculture 
in the forefront of your consideration, considering----
    Secretary ROSS. We certainly are----
    Mrs. NOEM [continuing]. They are in such tough times.
    Secretary ROSS [continuing]. And if I lapse at all in 
thinking about it, Sonny Perdue is very aggressive at making 
sure I pay attention.
    Mrs. NOEM. Thank you. I appreciate that, and I yield back.
    Chairman BRADY. Thank you.
    Mr. Holding, you are recognized.
    Mr. HOLDING. Mr. Secretary, thank you for being here, and 
thank you for your service.
    We all know there are products that are unfairly traded, 
and the Administration is right to target those unfairly traded 
products. On the other hand, there are products that are traded 
fairly, and which pose no national security risk. And I would 
hope the process is as efficient as possible in exempting these 
products. And I commend the Administration for trying to tackle 
unfairly-traded goods, but we need to be careful in that 
fairly-traded goods aren't caught up in the mix and subject to 
increased tariffs.
    And there was one particular instance on a product that you 
and I have spoken about before. We get some specialty steel 
from the United Kingdom that is used in our nuclear submarine 
program. And even though the 232 investigation was initiated 
under a national security argument, this is a case, this UK 
steel nuclear submarine case, where it would actually, I 
believe, harm our national security to have that product 
subjected to higher tariffs.
    So, I just call upon you to comment on this case. I believe 
you are familiar with the factory in the United Kingdom that 
produces this specialized steel, and I believe you are aware of 
how it is used in our submarine program. And if you can, 
comment how the process that you have envisioned, that you are 
laying out, could possibly apply to a situation like this.
    Secretary ROSS. I am quite familiar with the steel 
situation in the UK. As you may be aware, when I was in the 
private sector I tried to buy the company----
    Mr. HOLDING. Yes, sir.
    Secretary ROSS. I am quite familiar with its product line.
    I think you are also aware I issued a joint press release 
with Commissioner Malmstrom yesterday outlining that we had had 
very constructive discussions, and I am optimistic that the EU 
will turn out to be a negotiated solution. And you will hear 
more about that a little later on today.
    Mr. HOLDING. Well, I thank you. And the--I appreciate the--
working with the EU. And I would also like you to keep in mind 
that once the United Kingdom leaves the EU, that it will be our 
finest and best bilateral relationship on every level, from 
economic to military.
    Secretary ROSS. Well, we are keenly aware of the special 
relationship between the United Kingdom and the United States, 
and it is not my intention to do anything to disadvantage them 
in the context of Brexit.
    Mr. HOLDING. Thank you, Mr. Secretary.
    Chairman BRADY. Thank you.
    Mr. Smith, you are recognized.
    Mr. SMITH OF MISSOURI. Thank you, Mr. Chairman.
    Secretary Ross, thank you for being here, and thank you for 
your thorough--your great deal of work on the 232 
investigations.
    As you may remember, I was with you back in the spring of 
last year, when the President signed the Executive order to 
look into the 232 investigations for aluminum. And after 
looking through your report, it followed through with what I 
had been asking for a couple years. And the Obama 
Administration refused to even look at it.
    In 2000, as your report also noted, we had 22 aluminum 
smelters, 22. And just here recently, we have two fully 
operational ones, and only one of those uses the high purity 
aluminum that is needed for our defense, for our naval vessels, 
for our aircraft, to protect Americans. And that is what your 
report provided, and I appreciate that.
    But I also want to tell you that, the day after that, our 
President issued these protections. I was able to stand in the 
Bootheel of Missouri, where an aluminum smelter had closed in 
March of 2016, and where we lost hundreds of jobs because they 
couldn't compete with the illegal practices of China, to 
announce that, because of the President's actions and other 
actions, 450 new jobs--with the possibility of up to 900--in a 
district that the median household income is $40,000, and the 
jobs will average $64,000 a year.
    So thank you, Secretary Ross, for doing what is right.
    And I don't want to operate like some other Members of 
Congress by broadcasting my biggest concerns of how other 
countries may retaliate against us. That is the worst possible 
thing that we can do. But what I will ask you to do is to look 
into some countries, such as India, where they over-subsidize 
their agriculture products, like rice and other grains, that 
definitely is to the detriment of our farmers. I believe in 
free trade, but it has to be fair trade. And in order to make 
sure we have free trade, we have to punish those people who are 
in breach of contracts.
    And I appreciate your Administration in working forward, 
and I just want to say thank you. I am not going to target you, 
I just want to say thank you, Secretary Ross.
    Secretary ROSS. Well, thank you. I am pretty familiar with 
the Indian situation. I had an office there for 6 or 8 years in 
Mumbai. So I understand quite a bit about India.
    Chairman BRADY. Thank you.
    Mr. Rice, you are recognized.
    Mr. RICE. Mr. Secretary, again, thank you for being here 
today. And thank you, sir, for taking on this job. Your 
experience and your intelligence in pursuing this is certainly 
to the benefit of our country and to the American middle class.
    You see, I focus on American competitiveness and on the 
middle class. And it is obvious, when you look at the numbers, 
that the American middle class has shrunk, and makes about the 
same amount of money today as they did in 1990. And I think 
that a lot of that problem is because we allowed our country to 
become a competitive--our tax code. We have worked on that. Our 
trade policy, and you are working on that. And so I applaud you 
for it.
    I know there are people who are concerned about the effects 
of these tariffs, and they should be. And it is complicated. 
But I am glad you have taken it on, because nobody denies that 
the American middle class hasn't suffered because of unfair 
trade practices.
    So I just wanted to give you the floor to talk about how 
you think, in the big picture, that this will affect the 
American middle class. I have two steel mills in my district. 
One of them closed, and they are reopening partially because of 
these proposed tariffs. And I have other people who are 
affected in other ways. Uncertainty, as you said, is a big 
fear. So it is important to clear that up. I wanted to give you 
the floor to talk about those things and how you think this 
will affect the American middle class.
    Secretary ROSS. Well, a lot of the purpose of our trade 
practices has been to encourage companies to stay in the United 
States or come back, or foreign companies to come in. And when 
I was in Davos, the finance ministers of a number of the 
European countries were actually complaining about our new tax 
thing, saying they think maybe it is an unfair trade practice 
that we are cutting our taxes.
    And I said, ``Well, maybe you should follow suit.'' And it 
was not well greeted, because the particular ministers were not 
of a mind to cut taxes.
    The Administration is doing everything it can to reassure 
and to assure current American manufacturers. And I am 
heartened by the fact that, while there was a lot of 
controversy over the solar panel 301 decision, reality is 
plants are reopening here, the sky has not fallen, and we have 
to take some risks in order to change the terrible practices 
from before.
    Many of these other countries have been able to victimize 
us for too many years, and it is taking a little while to 
adjust to the fact that it is not the same relationship 
anymore.
    Chairman BRADY. Time has expired.
    Mr. Schweikert, you are recognized.
    Mr. SCHWEIKERT. Thank you, Mr. Chairman.
    Mr. Secretary, the joys of trying to do this in 3 minutes. 
So my first item is just an inherent concern--and you see it in 
the Wall Street Journal and others--is that as tariffs move 
toward the bulk commodity side, that the fabrication side gets 
done offshore. And being from Arizona, where we do lots of very 
specialized fabrication for aerospace, for technology, allay my 
concerns.
    Secretary ROSS. Right. Well, I handed out some charts to 
the Committee showing the trends in commodity prices of steel 
and aluminum versus output in the consuming industries. And I 
think you will see there is relatively little correlation 
between the two.
    Mr. SCHWEIKERT. Mr. Secretary, in having looked at the 
charts, I respect the concept saying, hey, the input cost did 
not change much, but that does not change the incentive for the 
country that we believe is cheating by central planned over-
capacity, or what it may--saying, fine, we will just do the 
finished product here, instead of shipping the bulk product.
    I mean, it is a legitimate concern. I would love to just 
find a much more elegant way to allay that concern that 
cheating doesn't change to we will just finish the product and 
send it to you that way.
    Secretary ROSS. Right. Well, as I mentioned in response to 
a question earlier, we are fully prepared, if someone 
circumvents this by upgrading the product to a higher state of 
manufacture, we will bring trade actions against it. We have 
been very vigilant against circumvention.
    Mr. SCHWEIKERT. And you just moved to my--in a brilliant 
way, my second question. We are party to a number of bilateral 
trade organizations, some that have authority over a pursuit of 
over-capacity, you know, industrial policy, and we have 
international agreements to dial that back and penalize that. 
We have the WTO.
    What is happening in our bilateral trade agreements also as 
coupled with what we are doing unilaterally?
    Secretary ROSS. Well, the WTO--there is the global steel 
forum that has now met, I think, something like seven times. 
But, unfortunately, as is so often the case with big public 
fora, it has become a debating society without reaching any 
conclusion. We think that, historically, a lot of time has been 
wasted debating, rather than acting. This Administration will 
be activist.
    Mr. SCHWEIKERT. I will beg of you, even though it--the 
system doesn't completely allow it--maximize transparency to 
avoid disruptions and--in pricing and commodities. And my fear 
is I spend a lot of time looking at futures, and I have seen a 
lot of weird things. Whether it be individual profiteering, it 
does create a cascade effect----
    Secretary ROSS. Right.
    Mr. SCHWEIKERT [continuing]. Throughout the--we will call 
it the specialized fabricators.
    Secretary ROSS. Well, the last way to help the steel and 
aluminum industries would be to destroy their customers. So we 
are very, very mindful of that.
    Mr. SCHWEIKERT. Thank you, Mr. Secretary.
    Chairman BRADY. Thank you. Time has expired.
    Mrs. Walorski, you are recognized.
    Mrs. WALORSKI. Thank you, Mr. Chairman. It is an honor, Mr. 
Secretary, to have you here. I want to talk about the graph 
that you referenced earlier. And I am grateful that you 
included the RV industry in this.
    You say this chart says that the RV industry will be fine. 
With all due respect, this chart cannot speak. But the RV 
manufacturers in my district can. What they and other 
manufacturers in my district have been telling me over the last 
year is that, while tariffs take effect tomorrow, the mere 
threat of tariffs has been felt already.
    One RV manufacturer told me the same model is 8.5 percent 
more expensive, compared to last year. A trailer manufacturer 
has had to raise prices 25 to 30 percent. He told me on the 
phone, ``I am livid. We are getting destroyed.'' He said the 
tariffs haven't started, but they have been felt.
    I can tell you how many manufacturers have told me about 
steel and aluminum shortages already. I can't tell you how many 
manufacturers who already source their steel and aluminum 
domestically, who we shouldn't want to hurt, but have seen the 
price of their inputs increase, anyway.
    Again, the tariffs start tomorrow, but they have already 
been felt in these industries. I have heard from manufacturer 
sources from--I have heard from manufacturers that source from 
abroad not because they want to, it is because they are forced 
to. The domestic suppliers simply refuse to make the input for 
their specifications. Whatever happened to the customer is 
always right?
    Well, those business owners are now worried that the very 
same supplier that refused to make their product to specs in 
the last year now only needs to say that they could make it to 
prevent an exclusion, hurting these industries further.
    Here is the thing. The RVs, boats, and trailers 
manufactured in my district are price-sensitive. An 8.5 percent 
increase in the price of an RV is real money to real people. A 
couple looking at that increase may say, ``Well, we are going 
to wait,'' or, ``We will simply go spend the money on something 
else.'' For pontoon boats, a $.10 increase in aluminum 
increases the boat cost by $750. So a company that normally 
sells 2,000 pontoons would only be able to sell 400 with that 
increase, and pontoons are already on the EU retaliation list.
    Elkhart County saw 20 percent unemployment during the 
financial crisis. It was devastating for workers, families, 
companies, and communities. But they have rebounded. And 
unemployment is around 2 percent right now. But they are 
worried that the momentum that they worked so hard to claw back 
is about to be reversed.
    What your chart does show, Mr. Secretary, is that steel and 
aluminum prices have spiked in the last year, and what RV 
manufacturers are telling me that means for them is that where 
they once expected 10 percent growth this year, they are now 
hoping for flat growth.
    So I appreciate your charts that are trying to educate me 
on what is happening in my district, but I am telling you that 
simply is not the case.
    Secretary ROSS. I think it is unfortunate that there has 
been a lot of speculation on the part of people withholding 
inventory, people jacking up prices. If you look at the price 
movement, it actually is well in excess of any possible impact 
that the tariffs might have. So there has been a lot of 
speculation going on.
    I think you will see things adjusting, once people 
understand what the real situation is. I think it is very 
unfortunate that speculators tried to take advantage of the 
consuming industries during recent months.
    Mrs. WALORSKI. This is about jobs in my district. And we 
have seen the price increases in the last year. So what starts 
tomorrow I would have to see proven wrong pretty quickly, 
because this is a danger to jobs.
    Chairman BRADY. Thank you. All time has expired.
    Mrs. WALORSKI. Thank you, Mr. Chairman.
    Chairman BRADY. You bet.
    Mr. LaHood, you are recognized.
    Mr. LAHOOD. Thank you, Mr. Chairman, and welcome, Secretary 
Ross.
    I have to tell you, Secretary Ross, I disagree with your--
the Administration's approach when it comes to trade and 
tariffs. And what is a bit frustrating is last year we passed 
once-in-a-lifetime tax reform. We hadn't done that in 31 years. 
It is having real effects on the economy. You look at 
regulatory relief, and in almost every sector of our economy we 
have had tremendous regulatory relief.
    And then I look at what the Administration is doing on 
trade, the tariffs, what is going on with NAFTA, the fact that 
we are 14 months into this Administration and we don't have one 
bilateral trade agreement. We talked about having a lot of 
those. And I think we are shooting ourselves in the foot when 
it comes to the economy as it begins to take off, with the low 
unemployment we have in this country.
    So I tell you that. And then I will just tell you a little 
bit about the district that I represent. Agriculture is the 
number-one industry in the State of Illinois. Many of the 
constituents in my district supported the President. Many in 
rural America did. And I look at what is going to happen 
because of your policies when it comes to trade, comes to 
tariffs. And the word that comes up all the time with my 
farmers is retaliation.
    You look at what has happened in the past. And the largest 
importer to China of soybeans is the United States. And that 
is--farmers are worried about that, and that retaliation. What 
can you tell my farmers to assure them that they are going to 
be okay?
    Secretary ROSS. Well, I think the real fear is the fear of 
the unknown. They all know that there is a potential 
vulnerability. I believe that the actual outcome of all this 
will be far less severe than things that people are worried 
about.
    The substitution of products from other countries into 
China, for example, displacing us will, for the most part, 
reopen those markets to American exports. So it will not be a 
one-to-one match, and it will not necessarily be simultaneous. 
But it is not an easy thing to substitute.
    I promise you, if China thought they could get the material 
as cheaply from Brazil or Argentina, they would be doing it 
right now.
    Mr. LAHOOD. And let me just switch subjects. I want to 
quote something from the Tax Foundation. The title of this 
article is ``Lessons from the 2002 Bush Steel Tariffs.'' ``The 
effects of higher steel prices, largely a result of steel 
tariffs, led to the loss of nearly 200,000 jobs in the steel 
consuming sector, a loss larger than the total unemployment of 
187,000 in the steel-producing sector at the time.'' Can you 
comment on that?
    Secretary ROSS. Yes. Those jobs that were lost were mostly 
lost in the months before the steel tariffs were put in by 
President Bush. So it is an inaccurate total, it is not due to 
that.
    Second, a large portion of the reasons why the steel 
industry didn't gain more jobs is we worked a new contract with 
the Steel Workers Union. We cut 32 job descriptions down to 5. 
We made changes in work rules, so that people could be running 
more efficiently.
    I would be happy on another occasion to go into much 
greater detail, but the ITC in fact found that the ultimate 
effect of steel range is somewhere between 65 million positive 
to the economy and 135 negative, and that it was such small 
numbers relative to the economy that you really couldn't 
pinpoint the difference.
    Chairman BRADY. The gentleman's----
    Secretary ROSS. So those alarmist things that you have seen 
in the paper do not have statistical support.
    Mr. LAHOOD. I look forward to----
    Chairman BRADY. All time has expired.
    Mr. LAHOOD [continuing]. A followup conversation. Thank 
you, Mr. Secretary.
    Chairman BRADY. Thank you, Mr. LaHood.
    Mr. Bishop, you are recognized.
    Mr. BISHOP. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for your time today.
    You faced a myriad of questions and issues. I would like to 
take this opportunity, as a Michigander, to sound the alarm on 
behalf of the American manufacturing industry.
    I represent Michigan. Our tool and die makers face every 
day Chinese tool and die makers who continually dump their 
product and undercut American prices, and now dominate the 
market for tools used by American automakers to produce major 
body sheet metal stamping. These companies in Michigan are 
desperate. They face extinction.
    And they personally told me the problem with competing 
China is more than just low wages. The Chinese government 
subsidizes stamping and die shops in many other ways. They have 
export credits, which refund up to 30 percent of the cost of 
tools. Their government builds elaborate, state-of-the-art tool 
and die shops filled with modern machinery and equipment before 
the company even moves in, and then they never ask for 
repayment. The government also subsidizes all kinds of training 
and--for their die makers. As a result of all of this, the 
business is going away.
    Prices for Chinese--Chinese prices are so low that American 
suppliers cannot afford to buy their major dies from anywhere 
else. Since no work exists here, in the United States, the 
industry has lost approximately 70 percent of the companies, 
and 80 percent of its skilled jobs.
    One Michigan company, before the Chinese onslaught, advises 
me that they employed 350 people--this is a major company, one 
of the last remaining--they now only have 127 employees left in 
the arsenal of democracy.
    There is clearly a long-term component to Chinese strategy. 
The--when China controls the cost and delivery of the tools 
needed to produce major automotive parts, they will exert 
control over the world's production of major equipment, tools, 
automotive supplies, even defense equipment. So this issue is 
far bigger than the economy. It goes all the way to national 
defense.
    I know we only have 3 minutes, but I would be remiss in not 
raising this issue to your attention. I hope that I can work 
with you and your Department to address this issue on behalf of 
not just the American automakers, but on behalf of our country, 
who are--we are caught flat-footed right now in a world that is 
stealing our manufacturing industry. And it behooves all of us 
to do whatever we can to work together to find a solution.
    So thank you for being here, and any thoughts you might 
have in your--sorry--you have only 24 seconds. I appreciate it.
    Secretary ROSS. Thank you very much. We are trying very 
hard to fix these problems. And the tragedy is that they 
weren't dealt with sooner. It would have been a lot easier to 
do it sooner, because these malefactors have been spoiled by 
getting away with it for far too long. We intend to stop that.
    Mr. BISHOP. Thank you, sir.
    I yield back.
    Chairman BRADY. Thank you.
    Mr. Curbelo, you are recognized.
    Mr. CURBELO. Thank you, Mr. Chairman.
    Mr. Secretary, thank you so much for your time here today. 
I want to commend the Administration's efforts to hold the 
Chinese accountable. I think it is clear to everyone that they 
undermine our economy, they undermine our workers. And holding 
them accountable is certainly the right thing to do.
    I would also ask the Administration to try to do right by 
our friends and allies throughout the world: The Europeans; 
here in the Americas, the Argentinians are concerned. These are 
countries that are trying to do right by the United States and 
by their own people, and I strongly encourage you to do 
everything you can to accommodate them so that we can continue 
building those important alliances and friendships.
    And I agree, I think trade is best conducted--business is 
best conducted with people with whom we share values. And I 
think, as long as the Administration's policy fits that idea, I 
think it can be successful. But there are some very obvious 
risks that you have heard repeated here numerous times today.
    I want to bring a separate issue, but one that is very 
important to the farmer community in my district. South Florida 
is home to the largest ag--is one of the largest ag-producing 
areas in the State of Florida. The warm weather in South 
Florida allows our farmers to grow crops there, year-round.
    Despite a long-standing suspension agreement designed under 
U.S. trade laws to eliminate the injurious effect of the dump 
imports, Mexican tomatoes, Mr. Secretary, continue to surge 
into the U.S. market, impacting the domestic tomato industry. 
Lack of enforcement and circumvention of these agreements since 
put in place in 1996 has intensified, as within that period--
one of the most recent suspension agreements alone--2014 to 
2016, imports from Mexico have risen 21.5 percent, while U.S. 
production has fallen 14 percent.
    This comes on the heels of a 303 percent increase in 
Mexican tomato imports over the last 25 years, with Mexico 
supplanting the United States as a dominant supplier in the 
U.S. market, all with supposed anti-dumping trade remedies in 
place. This is threatening the future of Florida and the larger 
domestic tomato industry.
    So, Mr. Secretary, I understand you were negotiating for a 
new anti-dumping suspension agreement with Mexican tomato 
exporters. Can you assure the Committee that you will work with 
the U.S. tomato industry to get an agreement that will 
eliminate the injury dumped Mexican tomatoes are inflicting on 
the domestic tomato industry?
    Secretary ROSS. Well, I have spent a lot of time, as you 
know, with the Tomato Growers Association in Florida, and at 
their request we reopened, with the consent of the Mexicans, 
the suspension agreement. It really has not worked the way that 
it was intended to. And that is, unfortunately, true of many of 
the trade agreements this country has had. We are trying to fix 
it.
    Mr. CURBELO. Thank you, Mr. Secretary. I yield back.
    Chairman BRADY. The gentleman yields back.
    Mr. Secretary, clearly, there is a pretty consistent 
message here: Support for cracking down on China's theft of 
intellectual property and our technology, and strong support to 
make sure that American workers and families aren't punished 
for China's misbehavior. Your exclusion process is key to that. 
We encourage you to use all your resources and thoughtfulness 
in applying that exclusion process in a good, positive way.
    I also want to echo what other Members have said, which is 
we thank you for your service, your experience, your insight. 
It will make you the perfect person for this discussion at this 
time.
    With that, I would like to note Members of the Committee 
have 2 weeks to submit written questions to be answered later 
in writing. Those questions and your answers, Mr. Secretary, 
will be made part of the formal hearing record.
    With that, the Committee stands adjourned.
    [Whereupon, at 11:43 a.m., the Committee was adjourned.]
    [Questions for the Record follow:]
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