[Senate Hearing 117-]
[From the U.S. Government Publishing Office]


 
  COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2022

                              ----------                              


                       WEDNESDAY, APRIL 28, 2021

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    The subcommittee met at 9:30 a.m., in room SD-192, Dirksen 
Senate Office Building, Hon. Jeanne Shaheen (Chairwoman) 
presiding.
    Present: Senators Shaheen, Van Hollen, Moran, Murkowski, 
Hagerty, Collins, and Braun.

                OFFICE OF THE U.S. TRADE REPRESENTATIVE

              OPENING STATEMENT OF SENATOR JEANNE SHAHEEN

    Senator Shaheen. Good morning, everyone. Welcome to today's 
Commerce, Justice and Science and Related Agencies Subcommittee 
Hearing to review the activities and fiscal year 2022 funding 
priorities of the Office of the U.S. Trade Representative.
    We're especially pleased today to have Ambassador Katherine 
Tai with us, our United States Trade Representative. I look 
forward to hearing what you have to say and to hearing the 
questions that we have. So, welcome. Congratulations on your 
historic nomination and unanimous confirmation. I know that I 
speak for everyone on the subcommittee when I say that we're 
excited to have you testify on the topics of importance to the 
country and to all of our constituents.
    The Office of U.S. Trade Representative is responsible for 
developing and coordinating U.S. international trade, 
commodity, and direct investment policy, and overseeing 
negotiations with other countries. And I think it's no 
exaggeration to say that these responsibilities affect every 
American in every facet of our lives, from protecting American 
workers, helping American businesses thrive, and enhancing 
national security, to building a world with clean air and 
water, while preventing catastrophic climate change.
    In order for USTR to succeed, Congress and, in particular, 
this subcommittee, must ensure it has sufficient resources to 
carry out its important mission. And to that end, the fiscal 
year 2021 Omnibus Spending Bill included $70 million for the 
Office of USTR. While the President's initial fiscal year 2022 
request did not include a top line proposal for USTR, we look 
forward to learning more today about your funding requests.
    And while we consider these funding needs, it's important 
to consider the new administration's trade policies and 
strategy. In 2018 and 2019, the previous administration imposed 
a series of wide-ranging import tariffs the likes of which this 
country has not seen in years.
    The repeated use of tariffs, the crudest form of trade 
instruments, and the predictable tit-for-tat retaliatory 
tariffs that followed wreaked havoc on global supply chains, 
and, by extension, on too many businesses and working people in 
my State of New Hampshire, and throughout the country.
    New Hampshire's a small business State, but it's also an 
exporting State. And in a previous life as Governor of the 
Granite State, I personally led the first overseas trade 
mission to Europe, and that was followed by several others to 
bring more investment into the State and to help businesses tap 
into new export markets. People in my State understand what's 
at stake in trade negotiations.
    One small business I've heard from is Walkin' Pets, a 35-
person pet supply company in Amherst, New Hampshire. The 
company signature product, a wheelchair for dogs, is produced 
in China, and is subject to tariffs. Now, the company believed 
that the tariff was a mistake on its business, so they retained 
a lawyer to help navigate the Byzantine exclusion process. 
Unfortunately, the company wasn't able to get an exclusion 
because of an imprecise classification.
    Now, after hiring a lawyer, and having braved the exclusion 
process, the company is still at square one, stuck with the 
tariff, and struggling to stay afloat.
    So, understandably, there is still a great deal of concern 
about the Section 301 tariffs especially now that, as of the 
end of calendar year, exclusions are no longer an option. I'm 
eager to learn more about your plans for Section 301 tariffs, 
and I'm pleased that in your confirmation hearing, you 
committed to further engagement of reunilateral action. You 
also committed to using all the tools at your disposal, not 
just more and more tariffs, to advance USTR's critical mission.
    In my view, taking a tough, but more thoughtful, approach 
will help level the playing field for American workers, while 
allowing the United States to once again set the rules of the 
road for global trade. Your successful negotiation of USMCA is 
proof positive that this is a winning playbook. Trade done 
right is a race to the top instead of a race to the bottom, as 
you know.
    Finally, let me conclude my opening statement by noting 
that I was very pleased that you used your first major policy 
address to embrace USTR's critical role in protecting our 
environment and addressing climate change. Trade policy, in my 
view, can't be divorced from environmental policy as our future 
prosperity is tied to tackling climate change.
    Ambassador Tai, we clearly have a lot to discuss this 
morning. I look forward to hearing your testimony, and the 
opportunity to engage with you and your thoughts about what we 
should be doing with respect to trade.
    So, thank you again for being here, and now I'd like to 
turn it over to my Ranking Member, Senator Moran, from Kansas, 
for his opening remarks. Senator.

                OPENING STATEMENT OF SENATOR JERRY MORAN

    Senator Moran. Senator Shaheen, thank you very much for 
convening this hearing. Ambassador Tai, welcome and 
congratulations on your unanimous confirmation. I always 
wondered if I was nominated for something whether I could get 
my colleagues in total to vote for me, and I doubt that's the 
case, so congratulations. It's a significant accomplishment in 
this environment. And I certainly appreciate you being here. 
Thank you for the moment that we had to visit in the hallway.
    You're stepping into your role at USTR at a time in which 
trade policy and trade enforcement has arguably never been more 
important, and perhaps more challenging. The Trump 
administration pursued and effectuated an aggressive and 
sometimes untraditional trade strategy, and it now falls to you 
and others in the Biden administration to carry our trade 
policies forward.
    Due to their importance to my home State of Kansas, I'm 
very interested in USMCA, and the Phase One China Trade Deal. I 
always remind myself and my constituents that Kansas is 
dependent upon our exports, and our economic future rests with 
feeding and supplying the rest of the world. Trade and exports 
is how many Kansans make a living, and Mexico, Canada, China, 
and many other countries are very important to us, but those 
three are consistently at the top of our list.
    That's why I believe it's so important for us to ensure 
that these trading partners live up to their commitments 
codified in USMCA and in the Phase One Deal. This is the first 
USTR-specific hearing this subcommittee has held since these 
trade agreements were entered into, and I'm eager to receive an 
update from you about current compliance with those agreements.
    Ambassador, you're also inheriting the responsibility, as 
Senator Shaheen said, of managing a full suite of 301--Section 
301 investigations, including ongoing investigations into 
digital services, taxes, and overseeing active tariffs 
targeting billions of product. That is a significant challenge 
but a very important one for the outcome to our Kansas 
manufacturers and American manufacturers. In today's 
environment, a most common conversation I have with Kansans is 
about the expense of buying a home, and the expense of building 
a home, and the lack of supply chain in regard to lumber and 
steel.
    While those trade agreements are important, and tariffs 
Section 301 is a huge issue for you, I remain concerned about 
the harm that tariffs have caused to U.S. families, to 
businesses, farmers, manufacturers, and workers. This concern 
is what caused this subcommittee on a bipartisan basis to 
require--we did this during fiscal year 2019 Appropriations 
Bill--that USTR execute an exclusion process for all rounds of 
Section 301 China tariffs.
    I don't think that was a necessary expected outcome when 
the tariffs were put in place, but this subcommittee, in doing 
its work, insisted on an exclusion process, and we've lived 
with that exclusion process, its ups and downs, ever since. We 
continue to carry that requirement in all subsequent CGS 
appropriation bills, and I will continue to ensure that this 
direction is carried out as long as the China tariffs remain in 
place.
    I also believe that USTR ought to begin a process to 
consider renewing expired exclusions and restart the process 
for companies to apply for those exclusions. Ambassador Tai, 
you've already heard from me on this matter via a letter, and I 
look forward to working with you to ensure that businesses have 
continued opportunities to petition their government for relief 
from tariffs.
    In addition to the many legacy responsibilities that I've 
highlighted, I'm mindful that the Biden administration has also 
developed in its early stages of--and is in its early stages of 
pursuing its own trade strategies. As we consider USTR's 
funding needs for fiscal year 2022 during this hearing today, 
I'm looking forward to learning more about President Biden's 
trade strategies and priorities, and also a better 
understanding of what level of resources USTR requires to 
perform its growing responsibilities.
    To this end, Ambassador, I was surprised that the 
administration's, quote, ``skinny budget'' released on April 9 
contained no information about fiscal year 2022 request for 
USTR. I hope this omission is nothing more than a result of 
this year's budget development process, and not a reflection 
upon any suggestion that trade policy is going to take a back 
seat to other domestic administration priorities.
    USTR's mission and its pursuit of free and fair trade 
opportunities for U.S. businesses is a domestic priority, and I 
hope that the Biden administration continues to view it as 
such.
    Ambassador, I thank you for joining us this morning. I look 
forward to hearing your testimony today, and I, even more 
importantly, look forward to working with you in a very solid 
and, hopefully, valuable way for both of us for years to come. 
Thank you very much.
    Senator Shaheen. Go ahead, Ambassador.
STATEMENT OF HON. KATHERINE TAI, AMBASSADOR, U.S. TRADE 
            REPRESENTATIVE
    Ms. Tai. Thank you, Chairwoman Shaheen, Ranking Member 
Moran, and Members of the subcommittee for inviting me to 
testify before you today. It is a great honor to be here, just 
as it is a great honor to return to USTR and lead the dedicated 
public servants who carry out this agency's important mission 
on behalf of the American people.
    We are working hard to support the Biden-Harris 
administration's efforts to end the pandemic and recover from 
the economic crisis. The American Rescue Plan, passed by 
Congress, has already helped get shots in arms and money in the 
pockets of millions of Americans.
    While we're seeing the economic benefits of that quick 
action, more needs to be done. Our goal is not a return to the 
economy we had before the pandemic, but to seize this 
opportunity to set America on a strong and clear path to a 
competitive future. That's why President Biden proposed the 
American Jobs Plan that would make bold investments and build a 
better foundation for decades of economic growth and good-
paying jobs for this generation of Americans and future 
generations.
    This is why USTR is developing and implementing what we are 
calling a worker-centered trade policy that complements and 
supports the domestic investments in the American Jobs Plan. 
The President's trade agenda will foster broad-based, equitable 
growth that increases innovation and enhances this country's 
competitive edge and--that's crafted with workers at the table.
    For the first time, we committed to using trade policy to 
address racial equity and to support underserved communities. 
Through thoughtful, sustained engagement and utilizing hard 
data, the Biden administration will develop a better 
understanding of how proposed trade policies affect all 
Americans as people and in their communities, especially 
communities of color. And we will consider those impacts as we 
make our policy decisions.
    As part of our whole of government approach, I recently 
outlined my vision for leveraging trade tools, and how USTR 
will enthusiastically embrace our responsibility to create 
opportunities to lead in creating new clean-energy technologies 
and new jobs, while averting an unfolding economic crisis and 
protecting our planet. We will meet this moment by working 
collaboratively with our trading partners, with Congress, 
underrepresented communities, and other key stakeholders to 
find creative solutions that create good-paying jobs and 
incentivize that race to the top.
    In my first conversations with my foreign counterparts, I 
have made clear that the United States will rebuild our 
international alliances and partnerships while reengaging 
global institutions.
    In just a few short months, USTR has already delivered 
results for American workers. In March, USTR announced a 4-
month suspension of tariffs with both the United Kingdom and 
the European Union related to our long-running WTO dispute over 
certain large civil aircraft subsidies. This was a bold step 
towards finally resolving the issues that have impacted the 
U.S. industry and its workers.
    Earlier this month, USTR helped to resolve a significant 
dispute between two South Korean companies that make electric 
vehicle batteries in America. This settlement builds confidence 
in these companies' reliability and responsibility as suppliers 
to the U.S. auto industry, and it puts our country in a 
stronger position to drive innovation and growth of clean 
energy technology envisioned in the American Jobs Plan. The 
settlement is the type of trade policy that I believe we need. 
It supports a larger strategy for creating jobs and investing 
in innovation and manufacturing leadership by bolstering 
sustainable renewable energy supply chains, levelling the 
playing field, and discouraging regulatory arbitrage.
    As we continue to pursue the President's trade agenda, we 
will promote and defend our values of democracy, human rights, 
and economic opportunity in service of producing a more 
inclusive prosperity. USTR will be directly involved in 
assembling what the President has termed a united front of U.S. 
allies, and I will carry the strength and creativity of this 
agency into every room that I enter.
    I want to close by thanking the talented public servants at 
USTR for their sacrifice and professionalism during this 
unprecedented time. They have been tested in ways that we could 
not have imagined, but they have continued to rise to the 
occasion with determination and integrity. I am so proud to 
represent them here today and appreciate the robust support of 
this subcommittee. Thank you, and I look forward to answering 
your questions.

    [The statement follows:]
   Prepared Statement of Hon. Katherine Tai, Ambassador, U.S. Trade 
                             Representative
    Thank you Chairwoman Shaheen, Ranking Member Moran, and Members of 
the Committee for inviting me to testify before you today.
    It is a great honor to return to USTR and lead the dedicated public 
servants who carry out the agency's important mission on behalf of the 
American people.
    We are working hard to support the Biden-Harris administration's 
efforts to end the pandemic and recover from the economic crisis. The 
American Rescue Plan passed by Congress has already helped get shots in 
arms and money in the pockets of millions of Americans.
    While we're seeing the economic benefits of that quick action, more 
needs to be done. Our goal is not a return to the economy we had before 
the pandemic, but to seize the opportunity to set America on a strong 
and clear path to a competitive future. That's why President Biden 
proposed the American Jobs Plan that would make bold investments and 
build a better foundation for decades of economic growth and good-
paying jobs for this generation of Americans and future generations.
    This is why USTR is developing and implementing a worker-centered 
trade policy that complements and supports the domestic investments in 
the American Jobs Plan. The President's Trade agenda will foster broad-
based, equitable growth that increases innovation and enhances the 
country's competitive edge and that's crafted with workers at the 
table.
    For the first time, we committed to using trade policy to address 
racial equity and support underserved communities. Through thoughtful, 
sustained engagement and utilizing data, the Biden administration will 
develop a better understanding of how proposed trade policies affect 
all Americans as people and their communities, especially communities 
of color. And we will consider those impacts as we make policy 
decisions.
    As part of our ``whole-of-government approach,'' I recently 
outlined my vision for leveraging trade tools and how USTR will 
enthusiastically embrace our responsibility to create opportunities to 
lead in creating new clean energy technologies and new jobs while 
averting an unfolding economic crisis and protecting our planet. We 
will meet the moment by working collaboratively with our trading 
partners, Congress, underrepresented communities and other key 
stakeholders to find creative solutions that create good-paying jobs 
and incentivize a race to the top.
    In my first conversations with my foreign counterparts, I have made 
clear that the United States will rebuild our international alliances 
and partnerships while re-engaging global institutions.
    In just a few short months, USTR has already delivered results for 
American workers. In March, USTR announced a four-month suspension of 
tariffs with both the United Kingdom and the European Union related to 
the long-running World Trade Organization (WTO) dispute over certain 
large civil aircraft subsidies. This was a bold step towards finally 
resolving the issues that have impacted the U.S. industry and its 
workers.
    Earlier this month, USTR helped resolve a significant dispute 
between two South Korean companies that make electric vehicle batteries 
in America. The settlement builds confidence in these companies' 
reliability and responsibility as suppliers to the U.S. auto industry. 
And it puts our country in a stronger position to drive innovation and 
growth of clean energy technology envisioned in the American Jobs Plan. 
The settlement is the type of trade policy I believe we need: it 
supports a larger strategy for creating jobs and investing in 
innovation and manufacturing leadership by bolstering sustainable 
renewable energy supply chains, leveling the playing field, 
discouraging regulatory arbitrage.
    As we continue to pursue the President's trade agenda, we will 
promote and defend our values of, democracy, human rights, and economic 
opportunity in service of producing a more inclusive prosperity. USTR 
will be directly involved in assembling what the President has termed 
``a united front of U.S. allies.'' And I will carry the strength and 
creativity of this agency into every room I enter.
Conclusion
    I want to close by thanking the talented public servants at USTR 
for their sacrifice and professionalism during this unprecedented time. 
They have been tested in ways we could not have imagined, but they have 
continued to rise to the occasion with determination and integrity. I 
am proud to represent them today and appreciate the robust support of 
this committee.
    Thank you, and I look forward to answering your questions.

    Senator Shaheen. Thank you very much. I just want to, at 
the start, remind everyone that this is a hybrid hearing and 
that some of our colleagues may be joining remotely. So we're 
going to do our best to try and keep people informed of the 
order of questioning, but, as we know, that doesn't always go 
the way we hope. So, that's just a warning that--I'm going to 
ask Senator Moran to go first. He has a mark-up and another 
committee in a few minutes, and I know he wanted to ask some 
questions before he has to leave. So, Senator Moran.
    Senator Moran. Ambassador--Chairman, thank you for your 
courtesies. And Ambassador, I will return. I hope the mark-up 
of two bills of mine is non-controversial, and I'll be back 
shortly, because I do want to hear what you say in response to 
other Members' questions.
    Let me start with something you mentioned in your opening 
statement. I applaud you, Ambassador, for the goal of resolving 
the number of long-running trade disputes. Kansas is an 
aviation State. Those large aircraft--civil aircraft 
manufacturers call Kansas home, and we are very encouraged by 
the announcement that the tariffs related to WTO's dispute 
would be paused for a period of 4 months in order to create 
space for a negotiated settlement. We're about a month into 
that pause. Can you provide me with an update of the status of 
those discussions and the likelihood that an agreement would be 
reached during that 4-month period?
    Ms. Tai. I would love to engage with you on this question, 
Senator Moran. We are about a month into the 4-month period. I 
am very serious when I say that it is time for us to resolve 
these disputes. They've been going on for 16 years, and as you 
know, these disputes aren't born on the day that we file them. 
They come out of a couple years of incubation, as well, so, 
these are 20-year-old disputes.
    They're disputes between the United States and the European 
Union. We're both strong manufacturers in this industry, and 
we're both facing increasing competition from other parts of 
the world. We need to figure out how to resolve our differences 
in order for us to come together to meet the challenges that we 
have today, and that we will have tomorrow. And so, I am very 
committed, USTR is committed to making the most of this 4-month 
period to close out a chapter of our relationship and our 
tensions with the European Union.
    I have been in touch with my counterparts in both the 
United Kingdom and the European Union. Our teams are in touch. 
I am, at this point, very motivated and hopeful that we will 
get the traction that we need with our trading partners, and 
very much hope that they see this opportunity as I do, as one 
that we really need to seize to prove to ourselves and to the 
rest of the world that we can move on because we have to.
    Senator Moran. I'll take that answer as you are working 
hard to accomplish that goal, and you are hopeful to achieve 
that during that 4-month period. I wish you well.
    Ambassador, I don't know of any score card that's out there 
in regard to China's compliance with Phase One. How would you 
rate or grade the Phase One Agreement compliance? What has 
happened and what hasn't happened?
    Ms. Tai. Well, that's a very important question, and one 
that I know there's a lot of interest up here in the Senate, in 
the House, on the Hill, in general with stakeholders in our 
entire economy, and certainly one of the questions that is at 
the forefront of my mind coming in as U.S. Trade 
Representative.
    I would like to just take a step back and look at the 
contours of this U.S.-China trade and economic agreement. It 
has a number of parts. There's a lot of focus on the purchase 
commitments that China made as part of this agreement. There 
are also a set of rules related to intellectual property, 
financial services, services access, biotech approvals that 
China also committed to, and we are drilling down at USTR using 
the usual discipline that we have to look at the overall 
compliance picture, and to examine China's performance under 
this agreement in all of its component parts.
    What I would share with you right now, Senator Moran, 
because we are still in the middle of this review, is that the 
picture is more nuanced than you might think by just looking at 
the trade data. And so, I look forward to coming back to you 
with a better picture, and with a more clear sense for where we 
need to drive harder with our Chinese counterpart.
    Senator Moran. I think that's a fair answer for this point 
in your tenure at USTR, So, thank you. At least you know the 
importance it has, and it's good for you to remind me of not 
just the agricultural commodity purchases, which are hugely 
important to Kansas, but also those trade and intellectual 
aspects of the agreement as well.
    In the 30 seconds I have left, let me see if I can get an 
additional question in. Steel and lumber prices, they're at 
record highs. The Biden administration is proposing 
infrastructure investments. I assume that will increase the 
demand for those items. I'm thinking about the absence of 
softwood lumber agreement with Canada, and the associated 
tariffs, as well as the Section 232 tariffs on steel and 
aluminum. Where do negotiations stand with Canada on softwood 
lumber, and what's the administration further considering to do 
to increase the affordability of two very important components 
to infrastructure and housing?
    Ms. Tai. Well, on softwood lumber, let me say this. I think 
that it will always be a component of the conversation between 
the U.S. Trade Representative and her or his Canadian 
counterpart. In my initial conversation with my Canadian 
counterpart, Minister Ng of Canada, we did raise our bilateral 
issues, the longstanding ones especially. They're ones that 
require maintenance and care and attention. So, what I would 
say to you, Senator Moran, is softwood lumber will always be in 
my sights in the conversation with Canada.
    We have a lot of tools. We have traditionally used them 
robustly. I intend to continue to do so, and to continue to 
raise the concerns that we have. And try to engage our Canadian 
counterparts in some out-of-the-box thinking, on this issue and 
others, in terms of how we manage longstanding differences that 
we have that really make an economic impact for our 
stakeholders and our economy.
    The other question that you've asked is on the steel 
tariffs in particular. What I would say here is that we 
continue to have a global overcapacity problem that is 
distorting the international market. But what we have right now 
in the Biden administration is a team of people who are intent 
on looking for solutions that come through cooperation with our 
close partners and allies. So, on that, what I'd like to convey 
to you is I and others in the administration, including 
Secretary Raimondo at Commerce, are working hard on 
conversations with the Europeans in particular to examine how 
we address the problems that the 232 tariffs have raised in 
particular in our relationships, while keeping our eye on the 
overall steel and aluminum market problems that we really need 
others' help to address.
    Senator Moran. I wish you well, and I look forward to 
working with you.
    Ms. Tai. Thank you.
    Senator Shaheen. Thank you, Senator Moran. Hopefully, 
you'll be able to get back to join us. I should have announced 
when I pointed out this is a hybrid hearing that we will 
therefore take Members in order of seniority on the 
subcommittee so that--since we don't know who will have shown 
up first online.
    I want to follow up with Senator Moran's question about the 
Phase One Trade Deal with China, because I understand that the 
deal included the creation of Bilateral Evaluation and Dispute 
Resolution Office. Is that office up and running, and can you 
describe to us how you expect that to work?
    Ms. Tai. Well, thank you for the question, Senator Shaheen. 
I think the office is not a--it's a--I think it stands for a 
flow----
    Senator Shaheen. A process, maybe?
    Ms. Tai. Organization of process, thank you. Looking for 
that word. And so, we have had continued contact at the 
designated official's level to continue to push and examine 
performance of this agreement. Right now, we are looking at the 
agreement holistically through the lens of an overall China 
strategy.
    And so, what I would say to you right now is we are looking 
at the tools that we have across the board, in particular in 
this agreement. It is a tool that looks a little bit different 
from our other agreements or traditional agreements, but we're 
interested, as I will always say, open-minded and interested in 
out-of-the-box and new tools.
    So, I feel like the bottom line here. We are very focused 
on this agreement, which is the agreement that we have, and 
testing its utility, and maximizing our use of the tools that 
are included in this agreement.
    Senator Shaheen. So, once that process is up and running, 
do we expect companies and individuals to be able to actually 
make use of that process when they have a concern or dispute 
that they want to get negotiated?
    Ms. Tai. So, I would say that one of USTR's functions is to 
be open to, and we traditionally have been very open to the 
engagement with the public, with our stakeholders. 
Increasingly, we are trying to expand out the circle of 
stakeholders who are used to interacting with USTR. So, 
absolutely, our stakeholders are part of that process.
    Senator Shaheen. Right. And I understand that the Phase One 
Agreement also included a provision for USTR to meet every 6 
months with the Chinese Vice Premier. Is that--that meeting's a 
little overdue. Has that been scheduled?
    Ms. Tai. It has not yet been scheduled, Senator Shaheen. I 
will be having my first contact with my Chinese counterpart, 
which I'm looking forward to, at the right time, and I expect 
to be able to come back to you with an update in the near term.
    Senator Shaheen. Great, thank you. I want to go back to the 
301 tariffs on imported goods because, as I said, that has been 
a real concern that I've heard from New Hampshire businesses. 
So, can you give us any sense of how the administration is 
going to approach the existing section in the near term, and 
what your view is about how to use that authority?
    Ms. Tai. Senator Shaheen, I know very directly, and I know 
this as a strong fact, that the tariffs and the exclusion 
process really do touch a very wide swath of our economy, our 
businesses, both large and small. So, this is very much on my 
mind. At my confirmation hearing, Senator Portman asked me for 
a commitment which I was very ready to make. To undertake a top 
to bottom review on China, at USTR in particular. And he 
recommended it as something that he had done in his time as 
U.S. Trade Representative.
    So, the tariffs, this agreement, the exclusion process will 
be very critical parts of this top-to-bottom review, and I am 
looking forward to kicking it off and being able to come back 
to you with a thoughtful and strategic recommendation in terms 
of how we will proceed from there.
    Senator Shaheen. Well, thank you. Do you have any sense of 
how long this is going to take, your review?
    Ms. Tai. It is something that we are looking at in our 
design right now, and I do know that time is of the essence.
    Senator Shaheen. Okay, thank you. Well, and then, just to 
follow up a little bit on the exclusion process, which, as you 
know, has been very opaque. It's been challenging for companies 
to figure out. How do you expect to--will the review include 
that exclusion process, as well?
    Ms. Tai. Yes, it will.
    Senator Shaheen. Thank you. Let me now go to Senator 
Murkowski.
    Senator Murkowski. Ambassador, thank you. Appreciate it. 
You need to know that you were the subject of conversation in 
Kodiak, Alaska, this weekend. Everyone is pinning their hopes 
on our trade representative when it comes to seafood issues.
    So, I want to raise that with you. As you know, we've seen 
some good news for U.S. agriculture commodities, corn and 
soybeans, under the Phase One Agreement, but when it comes to 
seafood, the fact of the matter is China is not meeting those 
commitments.
    In 2020, its imports of U.S. seafood were below the 2017 
baseline, and yet at the same time, what we're seeing is that 
China is increasing their imports from other areas. Non-U.S. 
imports up 89 percent in 2019 compared to the 2017 baseline. 
Still up by 35 percent in 2020, despite the pandemic.
    So, the question that the fine folks in Kodiak had is, 
what's going on? Basically, what is happening? Why do we 
continue to see this shortfall by China in terms of its seafood 
purchases? Does USTR recognize what this is doing to our U.S. 
seafood competitiveness, and more importantly, how can we hold 
China accountable for failing on its commitments? And so, if 
you can please address this for me and for all these fishermen 
in Kodiak that are quite anxious about what we've seen.
    Ms. Tai. Senator Murkowski, thank you. I have been advised 
and informed of the excellence of the seafood product that is a 
hallmark of Alaska. I don't know that I've ever had the 
opportunity to experience the full aspects of what Alaska has 
to offer, but the reputation of Alaska's seafood precedes it, 
really. And----
    Senator Murkowski. You are invited, by the way, to come 
north.
    Ms. Tai. Thank you very much. I was definitely maybe a 
little bit fishing for that invitation. But----
    [Laughter.]
    Senator Murkowski. We will accommodate.
    Ms. Tai. The seafood is certainly in our sights in terms of 
the commitments that the Chinese made in this agreement. 
They're really, really important for a number of reasons. 
Economically, they're important to us, but they're also 
important as commitments that China undertook of its own free 
will to make, and that we need to ensure that their promises 
are worth the paper that they are written on.
    So, let me just assure you and the fishermen in Kodiak, I 
hear you loud and clear. And in our engagement with China on 
this particular agreement, we will need to engage with China 
across the board in our trade and economic relationship, but 
this is the agreement that we have, and this is the agreement 
that needs to stand up. So, please let your fishermen know that 
I care deeply about their livelihoods, about the integrity of 
this agreement, and that we will be making use of the tools 
that we have and really pushing the tools that we have on 
their--for their benefit.
    Senator Murkowski. Well, I appreciate that, and I'm 
probably not going to need to report back to them because 
they're probably watching this hearing, even though it's just 6 
o'clock in the morning. So, I appreciate that commitment, but 
again, you have pointed out this was part of their deal. 
They've seen fit to make better on their word when it comes to 
other products, but seafood is a glaring example of where they 
have failed. So, if we can just be aggressive in that area.
    Another area, in addition to our seafood, that has seen 
impacts because of tariffs is what we have seen with regards to 
some of our timber products. This is a part of the State that 
has seen particular devastation as a result of drop-off in 
tourism traffic, so the economy in southeast is really 
depressed right now. But they're also seeing the impacts of a 
25 percent tariff rate on Alaska spruce and hemlock. And under 
the Phase One Agreement, there was a waiver for the timber 
tariffs, but Alaska spruce exports to China, which is our 
primary buyer of spruce, flatlined over the past couple years, 
and the future is not very good. So, hoping that you can help 
us work through these tariff issues, as well, on the timber 
export side.
    Ms. Tai. Absolutely. I hear you loud and clear on the 
timber, as well.
    Senator Murkowski. Thank you. Thank you, Madam Chairman.
    Senator Shaheen. Thank you. I believe we have Senator Van 
Hollen on the line.
    Senator Van Hollen. Yes, thank you, Madam Chairman, and 
thank you, Madam Ambassador for your leadership. I have some 
questions on the solar panel tariffs that were imposed by the 
Trump administration. Back in 2018, they imposed tariff rates 
on the import of solar cells and modules, under Section 201. 
That was in addition to the preexisting duties that applied to 
these products. The tariff was set at over 30 percent, and then 
declined by 5 percent over the years.
    In 2020, so just last year, the Trump administration moved 
to increase the 2021 tariff from 15 percent, which it had come 
down to, to 18 percent. That's what it is today. These tariffs 
have hit workers in Maryland hard, especially in the clean 
energy industry, costing us many jobs. People laid off because 
solar panel installers were no longer able to do it at a 
competitive price, and nationally, according to the Solar 
Energy Industries Association, these Trump tariffs have cost 
62,000 American job opportunities.
    The Biden administration, as I understand it, you've said 
is going to be reviewing these tariffs. This one is scheduled 
to expire in February of next year, and I listened carefully to 
the President's statement about jobs and clean energy jobs here 
in the United States. Have you heard and looked at the reports 
of how those solar panel tariffs have hurt jobs here in the 
United States?
    Ms. Tai. Thank you, Senator Van Hollen. The issue of the 
solar tariffs are very much on my mind, both in terms of the 
impacts and the dilemmas that they present to our economy right 
now, and the different stakeholders in our economy specific to 
the solar tariffs, the role that solar panels play in a future 
where we are running cleaner energy, but also for me, the story 
of the solar panel industry in the United States really gets at 
a fundamental issue that we need to confront in our competition 
with China.
    First thing that I'd like to say is Section 201 is--and 
this particular Section 201 set of tariffs, were sought by an 
industry here in the United States, so that there are producers 
who petitioned for relief from the United States Government. 
And today, we have a sole producer left in the United States 
for solar panels, when 10, 12 years ago, we had quite a few in 
this burgeoning industry. Given the role that we think these 
types of products are going to play, it's actually a very sad 
story that we are in right now, where we are struggling with 
the application of these tariffs that are meant to save maybe 
the last producer that we have here in the United States.
    And so, stepping aside a little bit, what I would say is 
that I recognize the nuance and the complexity that is 
presented by the solar tariffs question in particular. I do 
want to raise the profile of the overall, bigger picture so 
that we don't lose it, which is if we don't keep our eye on the 
ball, we will continue to experience these types of fights over 
the last scraps of an industry that we have lost to a 
competitor, and in particular to the Chinese.
    It is a pattern that we see over and over again. I will say 
that steel and aluminum are a leading contender here, solar. 
And we can see where this pattern will play out again and again 
if we are not ready to anticipate the loss of industries to 
anti-competitive practices and massive subsidies that are 
coming from our biggest competitors.
    Senator Van Hollen. Right. Madam Ambassador, I appreciate 
that, and you know, my time is running out. I--we all--I 
strongly support the American Jobs Bill, and we need to be 
investing a lot more in developing these capabilities here at 
home, but that should not come right now at the cost of 
thousands and thousands of jobs in Maryland and other places 
with respect to installing solar panels. We should be able to 
do two things at one time. You know, the president has talked 
about his clean energy goals. These tariffs have resulted in 
the equivalent of seven coal plants, or five point five million 
automobiles being put back on the road because of the fact that 
the solar panel installation industry was made less competitive 
here at home.
    So, we have big issues that you mentioned, in terms of our 
own domestic capacity, but we should not do one at the cost of 
the other. We need to make those investments here at home, but 
not be harming those who are trying to make people's homes more 
efficient.
    So, Madam Chairman, I see the time is up. I am going to 
submit some questions for the record with regard to the 
enforcement of the USMCA, and I look forward to your responses 
in writing. Thank you, Madam Ambassador. Thank you, Madam 
Chairman.
    Senator Shaheen. Thank you, Senator Van Hollen. Senator 
Collins.
    Senator Collins. Thank you, Madam Chairman. Ambassador, 
welcome. The Maine lobster industry has been hard hit by the 25 
percent retaliatory tariff that China imposed on the U.S. 
lobster industry in 2018. The Phase One Trade Agreement between 
the U.S. and China was a first step toward regaining Chinese 
market share, and indeed inspected growth--expected growth in 
that market share. Before the tariff, China was the second 
largest importer of U.S. lobster, purchasing $128 million worth 
in 2017. During the first month under the new tariffs, however, 
live lobster exports to China declined by 64 percent, and 
indeed, one lobster exporter in Maine saw a 90 percent decrease 
in exports to China.
    Your predecessor made real progress by securing a 
commitment from the Chinese to match or exceed their pre-tariff 
purchase levels. And at first, there really was progress under 
the agreement. We saw sales to China start going up. But now 
that's not carried through into this year, into 2021. And 
currently, the totals are nowhere near the promised purchase 
levels or the pre-tariff levels.
    What steps is the administration planning to take to ensure 
that China lives up to its promise and its purchase agreements 
that it made in the Phase One Agreement?
    Ms. Tai. Senator Collins, thank you for that. The lobster 
exports from Maine and from the United States are very much at 
top of mind given the strength of our industry in our ability 
to supply other markets. And I'm very aware of the story of the 
hit to our exports, and then the hope and the promise that the 
Chinese have made.
    What I would say to you is that, with respect to the 
purchase commitments that the Chinese made in the U.S.-China 
Trade Agreement, we are in the process of examining their 
performance, and are scrutinizing all of the aspects of what 
they have done, and what they have yet to do, and what they 
have not done at the levels that they promised.
    Your raising it with me here today is one of the most 
powerful ways of showing how much of a priority these promises 
and China's ability to keep them are to us in managing our 
relationship with China. So, I would like to assure you that 
this is going to be--is a priority as we are examining 
performance and will be a priority for us as we examine our 
options for engagement with China and all of our enforcement 
options.
    Senator Collins. Thank you. As a result of the worldwide 
Section 232 steel and aluminum tariffs, which my colleagues 
have all mentioned today, the European Union is said to double 
retaliatory tariffs to 50 percent on certain imported products, 
including recreational boats, on June 1st. This would have an 
adverse impact on boat builders in the State of Maine. Is the 
administration working with the UE to prevent this increase 
from taking place?
    Ms. Tai. Senator Collins, yes, across the board on Section 
232, this administration is committed to working on the larger 
issue of the global overcapacity and glut in steel and aluminum 
production capacity, but with our allies, in particular, with 
the European Union. So, we are engaging with our European Union 
counterparts that is from my perspective and also, I know 
Secretary Raimondo at the Commerce Department. And the point, I 
think, is that we find ways to work together with allies like 
the European Union on an overall problem that we actually 
share. So, yes, my bottom line answer is yes, we are working on 
this.
    Senator Collins. Thank you. And I only have 5 seconds left, 
so I will submit my rest of my questions for the record. But 
let me just say that I agree with my colleagues on the need for 
there to be a negotiation with Canada to renew the softwood 
lumber agreement. We've seen lumber prices go sky high. We 
obviously prefer domestic sources, but when domestic sources 
can't meet the demand, as is the case right now, and prices are 
so high, we desperately need a new agreement to be negotiated 
so that we're not involved in imposing under failing and anti-
dumping duties on Canadian softwood lumber imports.
    We want Canada to play by the rules, but we need a new 
agreement. So, I just wanted to reinforce what my colleagues 
have said, and I'll submit my question for the record. Thank 
you, Madam Chairman.
    Senator Shaheen. Thank you very much, Senator Collins. And 
let me just add my voice to Senator Collins with respect to 
lobster. That is--we don't have as many in New Hampshire as 
Maine does, but it is also an issue for us, and we have seen a 
devastation in the market from companies that were sending 
lobsters to China. And that market doesn't exist anymore. So, 
Senator Hagerty. Oh, no. I'm sorry. Do we have anybody online? 
So, Senator Hagerty.
    Senator Hagerty. Well, Chairman Shaheen, thank you very 
much for holding this hearing. And Ambassador, I want to 
congratulate you. Your reputation is excellent. We've talked 
about that, and I look forward to working with you. I also want 
to thank you for the negotiations you undertook with SK and LG 
in electric batteries. Tennessee is an automotive-producing 
State. We're at the cutting edge of automotive production, and 
having that capacity nearby is going to be absolutely critical 
for us to move into the next stage of automotive excellence. 
So, I applaud the actions that you've taken. It's going to have 
a very significant impact on the supply chain that's so 
critical to the automotive industry in our State.
    I'd like to talk about another industry, though, that's 
critical to our State. You know that I'm from Tennessee, and 
I'm sure you're not going to be surprised at this question. But 
as my colleague, Ranking Member Moran mentioned, there's been a 
4-month hiatus that's taken place to negotiate between 
airlines, aircraft frames. There have also been a number of 
beverages included in that hiatus on those tariffs. But what's 
missing is American whiskey. American whiskey remains subject 
to a 25 percent tariff, and that tariff is going to go up to 50 
percent in June if something isn't done about it.
    American whiskey is critical to Tennessee's industry. More 
important, it's critical to our brand as a nation. I think you 
could go anywhere in the world, and ask people about my home 
State of Tennessee, and they could tell you that whiskey is a 
big part of our culture. People abroad aren't going to be able 
to buy our whiskey at a 50 percent tariff rate, so I'm 
interested in what you'll be able to do to take on the problems 
of American whiskey being taxed at 50 percent.
    Ms. Tai. Senator Hagerty, you are--it's very nice to see 
you in person, and you're right. Whiskey, bourbon from 
Tennessee--Kentucky, also, I know is a big producing State--are 
very much on our minds, and we hear from these stakeholders 
directly about their concerns from these EU retaliatory 
tariffs.
    What I would share with you is this. So, first, I want to--
I want you to know I think a lot about this, and we are working 
on this. But let me just frame this up a little bit in terms of 
the tariffs that the Europeans have on our whiskey, which is 
they're part of the Section 232 suite of tariffs. This is where 
we are, and this is actually, in terms of enforcement, using 
tariffs for enforcement, this is actually the logic for how 
they're supposed to work. We impose them, our counterparts, 
when they have the right, will impose them back. And it's not 
for the sake, usually, of just hitting each other with tariffs. 
It's usually to motivate the two sides to get at resolving the 
issue.
    In the case of the 232s, the issue that we need to resolve 
is the global overcapacity problem. And so, here I'm using a 
slightly different set of words and tact to convey to you, but 
the same message, that we really do need to work with others, 
especially the European Union, on the overall steel 
overcapacity problem. And so, what I am hoping is that they see 
that problem, and they see it to be as serious a challenge to 
our ability to produce and compete in steelmaking as we see it, 
and that, working together, we will be able to resolve these 
sets of tariffs so that we can join forces on the bigger 
picture.
    So, that's how I'm approaching these conversations. I know 
that there are others in the administration who are working on 
this, as well, and we will be working together to get at more 
effective solutions to the problems that we have.
    Senator Hagerty. As you can imagine, I don't want Tennessee 
whiskey or Kentucky bourbon to be a casualty of this. Certain 
beverages have been included. Others have not. I'm not certain 
the logic of how one was chosen, the other was not, but our 
situations are similar. In fact, maybe even more important 
given the identity associated with Tennessee whiskey and our 
brethren in other States, and it's critically important to our 
State. So, I appreciate your attention to that.
    I'd like to turn, if I could, to the role that you play 
with the World Trade Organization and talk about something that 
has deeply concerned me and I'm sure many Members of the 
subcommittee. And that's the way China is treated at the WTO. 
They enjoy preferential treatment. They take on weaker 
commitments, and they've done a very good job of doing this in 
a number of multilateral organizations. I'm sure you're aware 
of the disparate treatment that they receive, and I would be 
very interested in hearing your thoughts on that, and what we 
might be able to do about rectifying the situation.
    Ms. Tai. Senator Hagerty, I know I'm running out of your 
time, so let me try to be succinct here. It is very concerning, 
the rules at the WTO that allow for countries to designate 
themselves as developing and to allow them to have 
dispensations from the rules, and this is something that we 
will continue to work on at the WTO, and work with others on. 
We are making some progress, and I am hopeful that we will be 
able to make a difference at the WTO.
    Senator Hagerty. If I can help in any way, I know some 
other nations that I think feel the same way we do, and I'd be 
happy to work with you on that.
    Ms. Tai. Thank you.
    Senator Hagerty. Thank you. Thank you, Ms. Chairman.
    Senator Shaheen. Thank you, Senator Hagerty. And I just 
want to clarify something. The Ambassador is not suggesting 
that there is an oversupply of whiskey in the world, are you?
    [Laughter.]
    Ms. Tai. I'm sorry if I--that wasn't clear. Okay.
    Senator Hagerty. I got it.
    Senator Shaheen. Just wanted to clarify that.
    Senator Braun. Nobody would complain.
    [Laughter.]
    Senator Shaheen. Senator Braun.
    Senator Braun. Thank you, Madam Chair. Good to be talking 
with you. Indiana is a top steel-producing State in the U.S. As 
a result of repeated surges in steel imports, the Trump 
administration implemented Section 232 tariffs, which helped 
kind of stabilize the domestic steel industry, allowed steel 
makers to invest billions of dollars in new facilities and 
upgrades to existing mills. I think nearly half of the world's 
excess steel capacity is housed within China. These efforts 
saved thousands of jobs.
    As you know, the tariffs are designed to protect against 
that global overcapacity, and you've got some anti-market 
policies that go along with the glut, so it really creates a 
condition to where you can get predatory actions that don't 
play by the rules necessarily.
    I know that a number of foreign governments are pressing to 
have the tariffs lifted, but I remain concerned, because I 
don't know that any of the underlying practices are going to 
change, and I think certainly that capacity's going to be 
there. Very tempting to try to use it. What assurances can you 
provide that the Biden administration will preserve the steel 
tariffs program to prevent a new surge of imports, and to use 
it as a tool until you see real change happening within the way 
the Chinese handle this excess capacity?
    Ms. Tai. Senator Braun, that is a really critical question 
because the 232 tariffs are very much on everyone's minds, 
because of the tariffs themselves, and also because of 
retaliatory actions that our trading partners have taken, 
including on Tennessee whiskey, as we just heard from Senator 
Hagerty.
    I want to assure you that I understand, see and fully 
accept that there is a global overcapacity problem with the 
steel market, and that the tools that have been used, the 232 
tariffs, have had an impact on steel production here in the 
United States, a positive one. But they have also carried with 
them costs. And so, for the Biden administration, as the U.S. 
Trade Representative, my focus is to figure out how we improve 
and the effectiveness of the tools that we use in support of 
American steelmaking, but to try to address some of the 
unintended consequences, I think, in terms of the frictions 
that this has generated with our trading partners.
    And so, solutions that we come to with our trading 
partners, I believe, in my core, really have to address the 
larger issue around the overcapacity in the market.
    Senator Braun. In your conversation with Senator Van 
Hollen, you said keep your eye on the ball. Be watchful. Cited 
maybe other industries. Steel is so important to Indiana. What 
would be the top two or three, in order of concern, other 
industries that you think we can have similar issues dealing 
with the Chinese?
    Ms. Tai. Senator Braun, I want to be careful here in terms 
of prioritizing because all of our industries, they're like our 
children. They're important. They're important to all of us. 
But let me say this. I think that if you look at trend lines in 
industrial sectors, and you also look at the ambitions and the 
policies that China has put forward in its plans, made in China 
2025, its 13th 5-year plan, 14th 5-year plan, you can mark and 
see where trends are going to go. And so, some of them are 
because of overcapacity. Some----
    Senator Braun. Could you name a few, not necessarily 
putting them in order that you might be concerned with?
    Ms. Tai. I can provide a couple examples. I think that we 
also see with cement, for example, that there is domination by 
China in the global market. Vitamin C, actually, had been a 
subject of an international antitrust case here in the United 
States, getting at the Chinese market dominance in this area. 
So, those are a couple examples that have been around, and if 
there are others, and this is of interest to you, I'd be very 
happy to continue this conversation with you.
    Senator Braun. Thank you.
    Senator Shaheen. Thank you very much, Senator Braun. 
Ambassador, we don't have anyone currently on the line or any 
other people in the queue, but I have some more questions, so, 
I'm going to do a second, maybe a third round here.
    I want to go back to climate change, and to your remarks. I 
mentioned this in my opening statement. I was very encouraged 
by the--your comments around climate change in your Earth Day 
policy speech, and one of the things you talked about, you 
said--and I think I'm quoting you accurately--is that, ``Our 
trade system itself creates an incentive to compete by 
maintaining lower environmental standards, or worse yet, by 
lowering those standards even further.''
    Given the President's recent announcement about further 
slashing our greenhouse gas emissions by 2030, and the 
commitment of the Biden administration to climate change, can 
you talk a little bit about how you see trade policy helping us 
to address climate change?
    Ms. Tai. I would be delighted to, Senator Shaheen. As I 
discussed some in those remarks, we have wanted to expand out 
the disciplines in our trade agreements, in our trade policies, 
in our trade conversations beyond tariffs and these border 
rules. And we have done so very successfully in a number of 
areas. If you look at the WTO agreements, it evolved from the 
general agreement on tariffs on trade to get at other types of 
issues that impact trade.
    But even in the WTO agreements, despite a very bold and 
really poetically written preamble that talks about standards 
of living, full employment, and the preservation of our natural 
resources for a sustainable economic future, there aren't any 
disciplines there. And I think that what is really important 
about the moment that we are in right now is here in the United 
States, we have made tremendous progress from 25 years ago, 
where our trade agreements, as a matter of course now, on a 
bipartisan accepted and supported basis, include labor and 
environment provisions. Full chapters that indicate that the 
terms of worker protections and environmental protections, 
these are economic issues. They impact the terms of trade. They 
impact how our economy is run.
    And we've made a lot of progress just in the last 4 years, 
in terms of building out enhanced rules, enhanced enforcement 
mechanisms, to ensure better terms of competition in terms of 
worker protections and labor as an input into our economy.
    Now is really the time to focus on increasing and 
improving, building out these environmental provisions, because 
it is very clear to the world right now that climate and the 
environment are not just policies in and of themselves for 
their own goods, but they're also public health policies, and 
then more fundamentally, they are economic policies. They are 
going to be critical to our ability to be the strong economic 
power that we are so used to, and so lucky to have been. And 
they're going to be critical to our ability to compete and lead 
as we go into the next decades of our future.
    Senator Shaheen. Well, I think one place where the 
importance of trade agreements in addressing that was USMCA, 
and your involvement in, I think, and Democrats' involvement in 
trying to improve that agreement were significant. It's 
something that we pay a lot of attention to in New Hampshire, 
because we do a lot of trade with China and with Mexico. And 
one of the real concerns as the first phase of--the first draft 
of that agreement was rolled out was the lack of those 
environmental policies that meant that we were not competing on 
a level playing field.
    So, can you talk about how you see USMCA now actually 
implementing some of the climate opportunities that we have as 
we're looking at trade?
    Ms. Tai. Well, I really appreciate this question. USMCA 
does actually have, and I think it does set the bar right now 
for the environmental provisions in our trade agreements. And 
while there isn't explicitly built out climate provisions, 
there are a lot of provisions in here that do impact the 
climate, chief among them, conservation provisions, enforcement 
provisions that are intended to enhance our enforcement and our 
coordinated enforcement against trade in illegally harvested 
timber, illegally taken wildlife, and all of these do impact 
the climate.
    So, I think that USMCA is an important base to build off 
of, but we shouldn't be afraid to be more bold, and to demand 
more from our trading partners, given that environmental 
issues, like our health issues, are ones where we are actually 
need to be working with others in order to make a difference 
for ourselves and for the world.
    Senator Shaheen. And so, are you feeling pretty confident 
if there are disputes that exist that the mechanisms that are 
there to try and resolve those will be able to work?
    Ms. Tai. That's a great question. I so appreciate that 
you've asked me this question. My view is that we did our very 
best to put in the most effective tools for enforcement that we 
know how. And they may not be perfect, but we're not going to 
know how effective they're going to be if we don't use them.
    And so, I am very committed. I am not afraid to use the 
enforcement tools. Some of them are cooperative, some of them 
are more confrontational, some are a mix, but I really think 
that in order to do the USMCA justice, and in order to do the 
partnership that we've renewed with Mexico and Canada, give 
them the respect that they deserve, we need to use all of these 
tools to see if they work. And then improve them, and improve 
our use of them, because that is the point of doing a trade 
agreement. It's not to put it on the shelf and look at it. It's 
to make sure that it works.
    Senator Shaheen. So, we don't have any examples yet of 
using the dispute resolution mechanisms to see how companies 
are responding to that?
    Ms. Tai. We do have one example. Actually, there are two 
examples of where USTR has initiated the first steps in an 
enforcement tool. So, the first one was done under the Trump 
administration by Ambassador Lighthizer. He requested 
consultations with Canada on dairy.
    And the other initiation we undertook earlier in, I think 
it was late March or early April, we activated a customs 
verification cooperation agreement that we have with Mexico, 
seeking information from Mexico, Mexican customs, on leads that 
we have that there is illegal wildlife or timber traffic that 
is happening through the Mexican ports, and we are expecting to 
hear back from Mexico on that soon.
    But absolutely we have taken the first steps, and we will 
continue to make sure that we've used every one of the tools 
that we have.
    Senator Shaheen. That's good to hear. I look forward to 
hearing more about how those mechanisms are used, and how, I 
don't think pleased is the right word, but how companies feel 
after they've had a chance to use those.
    The other concern that I've heard from New Hampshire 
companies about with respect to USMCA, and again, they were 
very pleased when it got done, but one issue has been the de 
minimis thresholds, which of course, those are very important 
for small businesses that export. In New Hampshire, most of our 
businesses are small, so they are paying real attention to 
what's happening there.
    Can you talk about what USTR is doing to ensure that Mexico 
is following the agreement when it comes to de minimis 
thresholds?
    Ms. Tai. Absolutely. I was going to say that I would be 
happy to remind my Mexican and Canadian counterparts how 
disappointed stakeholders are in the United States with where 
they were willing to commit themselves on, their de minimis 
thresholds. But with respect to Mexico, let me say this. There 
are a number of concerns that we have with Mexico's performance 
of its commitments under USMCA.
    I want to recognize here, maybe a little belatedly, and 
this probably applies to our review of our own performance, but 
also the performance of our trading partners under our 
agreements. The last year has not been a normal year, and I do 
want to recognize that COVID-19 has impacted all of us in lots 
of different ways.
    So, my conversations with Mexico. I am very cognizant of 
the challenges that they are facing, just as we are facing 
challenges. But that doesn't stop us from wanting to make sure 
that trade is still happening and that promises are being 
fulfilled. So, I have raised bilateral issues that we have with 
Mexico. My counterpart in Mexico, Secretary Clouthier, she was 
not shy about raising Mexico's concerns about what we are doing 
here in the United States.
    On USMCA, I am looking forward to a free trade commission. 
This is sort of the annual get-together to review performance 
and to take care of the agreement. We will be setting that up 
in the coming weeks, and I will be happy to report back to you 
after that takes place.
    Senator Shaheen. Well, thank you, and thank you for adding 
Canada to that, because obviously Canada is also an issue. I 
had the opportunity several years ago to raise the--our 
concerns about their de minimis thresholds with the foreign 
minister, and he was very responsive. I think when he got back 
to the government, they were less so. So, I do recognize that 
this is an issue in both participants with USMCA.
    Finally, I just want to ask how the pandemic has affected 
your agency's operations. I know it's really been hard on 
everyone. And are there costs that the agency has incurred that 
we should be paying attention to as we're looking at the budget 
that's presented both by the administration and as we're 
thinking about what we need to do for the next year?
    Ms. Tai. I so appreciate that question, because, being a 
returnee to USTR, and having spent some very formative years 
there, I care very much about the people who make USTR work, 
and what I would say in terms of the costs of the pandemic, I 
would say that the costs are probably more to morale and more 
personal, in terms of the uncertainty and in terms of the 
difficulties that it has imposed on people.
    And, you know, workers at USTR are not alone. I know that 
for families with children, especially young children, for 
colleagues who are single, that they are some of the ones who 
have been hit the hardest by the reality of needing to work 
through the pandemic. So, what is interesting is as we look at 
the USTR as an agency, and the impact of the pandemic, what I 
would say is mostly it's that we have not spent our funds at 
the rate that we expected because of pandemic restrictions, and 
because we are placing the health and safety of our colleagues 
and those of our counterparts really at the priority of what we 
are doing.
    So, that's probably my message to you in terms of the 
pandemic's impact on USTR, which is most of our budget is 
dedicated to travel and to personnel. We are a small but mighty 
machine, and in a pandemic, it is hard to travel, and unsafe. 
And it is also hard to replace personnel and recruit personnel. 
So, those are probably the largest impacts of the pandemic that 
I have to share with you.
    Senator Shaheen. Well, I hope you will stay in touch with 
this subcommittee as you're continuing to work on your budget, 
because the more information we have, the better job we can do 
in trying to address what your needs are.
    Ms. Tai. Understood.
    Senator Shaheen. Senator Moran.
    Senator Moran. Chairman, I know you're disappointed that I 
made it back, but----
    Senator Shaheen. Oh, I'm so glad. I was out of questions.
    Senator Moran. Thank you very much for--again for 
conducting this hearing. Ambassador, thank you for being here. 
Let me go back to a topic that I raised with you in my earlier 
questions and in my opening statement.
    I mentioned to you that I have joined 39 of my Senate 
colleagues, so 40 of us have written to you urging that you 
restart the exclusion process for imports from China, subject 
to tariffs under Section 301. Again, this subcommittee on a 
bipartisan basis led the effort to persuade the prior 
administration to set up exclusion process. I'm not sure that 
was their intention when we started that effort, and I remain 
in my strong belief that Americans ought to continue to have 
that opportunity to petition their government for relief from 
tariffs. The question is more specific. Do you agree with that 
sentiment? Do you agree with me that Americans should continue 
to have that opportunity to find exclusions under Section 301?
    Ms. Tai. Senator Moran, I would say that in general, yes, I 
do agree. And I don't want to raise any consternation here, I 
just want to be--have the opportunity to fill in a little bit. 
At my confirmation hearing, Senator Portman, who I believe is 
also on that letter, had asked me to commit to a top-to-bottom 
review at USTR, and he really recommended it to me as something 
that he had done when he was USTR. And this is a top-to-bottom 
review specifically on China.
    And at the time when Senator Portman was U.S. Trade 
Representative was 2005, 2006, China had been in the WTO for 
about four or 5 years, and it was actually I think a really 
excellent idea to do that top-to-bottom review and to think 
strategically about that particular relationship.
    Well, it's 2021 now, and we are in a different place in our 
own economic history and in our relationship with China. And 
certainly, China has changed a lot since that last review was 
done. So, I very readily committed to Senator Portman to 
undertaking a top-to-bottom China review at USTR, and we will 
be looking at the full picture, but the tariffs themselves we 
will be looking at, as well as the exclusion process.
    And part of that will also be reviewing how the exclusions 
were done before, the logic behind the tariffs, the logic 
behind the exclusions, and so, my answer to you is I am very 
interested in this. I'm very interested in how we make our 
trade policies across the board more effective and more 
strategic. I think that every challenge is also an opportunity, 
that Ambassador Lighthizer has presented me with many 
opportunities, which I am embracing, and I would like to build 
on the gains that we have made over the past many years and 
make our trade policy work better.
    So, this question about the tariffs and the exclusions I 
know are on the minds of many, and are very consequential to 
stakeholders large and small, and we will be undertaking this 
responsibility with that sense of gravity.
    Senator Moran. Do you think you can complete that review 
and make a decision, and if it is to have an exclusion process, 
that that exclusion process can be in place before 
circumstances are such that the damage is being done to--
particularly to American manufacturers?
    Ms. Tai. I want to convey to you that I am keenly aware of 
how much time is of the essence, in particular in this current 
economic environment.
    Senator Moran. We're delighted to have you here so early in 
the appropriations process, but it gives you the opportunity to 
defer to a point in time in which you have the opportunity to 
have reviewed, which is not what I'm really complaining about, 
only smiling about. So, we'll be back in touch.
    Let me ask one more question. This was in regard to Mexico 
and USMCA. The president of Mexico recently issued a decree 
that would ban glyphosate and biotech corn in Mexican diets by 
2024. This announcement comes on the heels of Mexico also 
imposing certain regulatory barriers to agricultural imports, 
their approval. These actions threaten to cause significant 
trade disruption, undercut the commitments our nations just 
agreed to in USMCA. My question is, are you aware of these 
issues, and can you--if so, can you provide me with an overview 
what USTR intends to do or plans to do in addressing them?
    Ms. Tai. I'm very aware of these issues, and I have raised 
them with my Mexican counterpart, just as I raised our Canadian 
issues with my Canadian counterpart. I just conveyed to Chair 
Shaheen that there will be a Free Trade Commission convening 
under the USMCA in the next few weeks, and that will give us an 
opportunity to--at my level, to again raise concerns. But I 
want to let you know that I am committed to using all the tools 
that we have in the USMCA toolbox, and there are a lot. And 
there are some of them that are new, and these issues are 
absolutely on a fairly full radar of areas and concerns that we 
are hearing from Senators, from the stakeholders themselves 
about how the agreement is not operating the way that we would 
like it to.
    So, we have our teams that work on this day in and day out. 
We are looking at it in terms of what our options are to 
resolve these issues soon, and also what other options are if 
we're not able to resolve them in the near term.
    Senator Moran. Ambassador, thank you for your answers. I've 
been impressed by you and the answers as well as the future 
answers I expect to get. So, thank you, thank you very much for 
your leadership.
    Ms. Tai. Thank you.
    Senator Shaheen. Thank you, Senator Moran, and we can 
always invite Ambassador Tai back, so, I think we should assume 
that.
    Senator Moran. I appreciate you saying that, and welcome 
that opportunity.
    Senator Shaheen. Thank you. Well, I also want to thank you 
very much, Ambassador, for your appearance here, for your 
testimony, and for your willingness to work with the 
subcommittee, and Members of Congress on the challenges that we 
face going forward with trade.

                     ADDITIONAL COMMITTEE QUESTIONS

    If there are no further questions this afternoon, Senators 
may submit additional questions for the subcommittee's official 
hearing record. We ask that USTR respond within 30 days of 
receiving those questions, and the subcommittee will stand in 
recess. Thank you.
    [The following questions were not asked at the hearing, but 
were submitted to the U.S. Trade Representative for response 
subsequent to the hearing:]
            Questions Submitted to Ambassador Katherine Tai
              Questions Submitted by Senator Patrick Leahy
 a review of the activities and fiscal year 2022 funding priorities of 
              the office of the u.s. trade representative
    Question 1. On March 30, I sent a letter to the President, with 
Senator Tillis, requesting that the administration prioritize the 
appointment of critical intellectual property officials, including the 
Chief Innovation and Intellectual Property Negotiator at USTR. As noted 
in that letter, IP-intensive industries are poised to continue to be an 
engine for growth during this time of economic recovery, which is why 
focusing on promoting and protecting IP-related jobs and economic 
output must be a key priority. Unfortunately, this position at USTR has 
not been filled since its creation in 2016.

    1a.  Do you agree that filling the position of Chief Innovation and 
Intellectual Property Negotiator at USTR must be a priority for the 
Administration?
    1b.  Does the administration intend to put forward a nominee for 
this position? If so, when do you expect the nomination will be sent to 
the Senate?

    Answer. As you note, the Chief Innovation and IP Negotiator 
position has not been filled since it was created by Congress. The 
issue of intellectual property is one where there are strong views on 
both sides, and I will keep that in mind as we consider the path 
forward for filling it.
                                 ______
                                 
            Questions Submitted by Senator Joe Manchin, III
    Question 1. For decades, the world's biggest companies have flocked 
to the United States, attracted by our skilled workforce, expansive 
consumers and legal protections. These companies have created millions 
of good American jobs and revitalized many communities, especially in 
rural States like West Virginia. According to the recent government 
data, international companies created 80 percent of all new U.S. 
manufacturing jobs from 2013 to 2018. The Toyota plant in Buffalo, West 
Virginia employs over 2,000 West Virginians in Putnam County. There, 
Toyota continues to provide the economic engine for the area. 
Nonetheless, the United States runs a trillion-dollar annual trade 
deficit because it has lost most of its manufacturing industries. 
Although we created all the industries of the digital age, they have 
predominately migrated overseas.

    1a.  What opportunities do you see for new manufacturing jobs in 
the United States?
    1b.  How do we ensure that our trade policies benefit economically 
depressed and rural areas?
    1c.  How can we ensure that manufacturing jobs do not get 
offshored?

    Answer. The Biden-Harris Administration believes a strong U.S. 
manufacturing base is critical both for U.S. national security and a 
strong recovery from the COVID-19 shock. The new investments in both 
U.S. infrastructure and the U.S. industrial base will be critical to 
creating the new manufacturing jobs the United States needs.
    The American worker is at the center of the Biden Administration's 
trade agenda. President Biden has made it clear that his first priority 
is new domestic investments, not new trade deals. Those investments, 
including in infrastructure, are needed to enable American workers to 
compete effectively for the jobs of the future. The President has made 
his commitment to ``Buy American'' clear, including through the 
creation of a Made in America director within the Office of Management 
and Budget to link Federal procurement with domestic manufacturing. The 
American Jobs Plan recognizes the importance of creating good-paying 
jobs in rural America. Further, the work that emerges from the Biden 
Administration's Executive Order 14017 on America's Supply Chains will 
generate additional recommendations for how to strengthen the 
resilience of U.S. supply chains in four vital product areas--critical 
materials, advanced batteries, active pharmaceutical ingredients and 
semiconductors--as well as key sectors in the U.S. industrial base. The 
Biden Administration's foreign economic policy for the middle class 
recognizes that trade policy must support domestic economic efforts.
    The Biden Administration is also committed to ending the incentives 
in the U.S. tax code that have encouraged the offshoring of U.S. 
manufacturing jobs. The Treasury Department is actively working with a 
number of our key trading partners in the G-20 and the OECD on a 
multilateral agreement to end a race to the bottom on tax rates.
    At USTR, we are reviewing our trade commitments to identify ways in 
which trade agreements can do more to help strengthen U.S. 
manufacturing. We will continue to work to ensure that American workers 
can compete on a level playing field, not one where our trading 
partners gain false competitive advantages through lax labor and 
environmental standards.

    Question 2. It is no secret that the Biden Administration is 
looking to transition our Nation's fleet of gas vehicles to primarily 
electric vehicles. In the Administration's infrastructure plan, it was 
made very clear when they sought $174 billion to support electric 
vehicle manufacturing. I am very concerned about some of the 
questionable mining practices, both on the humanitarian and 
environmental side, in places like the Democratic Republic of the 
Congo, which holds 50 percent of the world's reserves of cobalt, which 
has also been developed in large part by China. I am also concerned 
about our reliance on a small list of countries to provide the 
materials we need to manufacture lithium-ion batteries. If those supply 
chains were interrupted or cut-off entirely, we wouldn't have any 
alternatives at this point. If we are going to build up the EV market 
in the United States, I believe we need to make sure we are sourcing 
these battery materials responsibly and domestically wherever possible 
or looking for sustainable alternatives.

    2a.  As U.S. Trade Representative, how do you plan on shoring up 
domestic supply chains and reducing reliance on foreign materials for 
production of goods, especially in EV production?

    Answer. I share your concerns about the supply chain for the 
critical materials needed for electric vehicle (EV) battery production. 
The full supply chain for advanced batteries is being examined as a 
result of President's Executive Order (EO) on America's Supply Chains. 
The recently released 100-Day reviews, ``Building Resilient Supply 
Chains, Revitalizing American Manufacturing, and Fostering Broad-Based 
Growth,'' pursuant to that EO examine this issue in further detail. 
Those reviews assert, in part, that ``the United States should take a 
mineral-by-mineral approach to look for opportunities to sustainably 
produce and refine domestic minerals for key battery materials. For 
battery materials where the United States does not have strong deposits 
suited for economic extraction, the best pathway to getting a stable 
material supply in the near-term is through allies and trading partners 
with responsible environmental and labor standards, and in the long-
term by capturing and recycling the supply of materials in end-of-life 
batteries from EVs and storage. Both extracted and recycled materials 
and minerals will require refining and processing, and refining and 
processing capacity should be scaled up domestically to utilize this 
supply, capture an important stage of the supply chain that fuels 
downstream battery manufacturing, and avoid the need to export raw 
materials and re-import processed components.'' I will work to ensure 
America's trade policies support the recommendations that emerge from 
these supply chain reviews.

    Question 3. In 2017, the Office of the United States Trade 
Representative initiated an investigation to determine whether certain 
Chinese ``laws, policies, practices or actions are unreasonable or 
discriminatory and may be harming American intellectual property 
rights, innovation or technology development.'' Because of this 
investigation, USTR imposed tariffs under Section 301 of the Trade Act 
of 1974. However, in doing so, they also created an exclusion process 
in which certain businesses and entities could request an exclusion 
from the tariffs for certain goods that were not readily available in 
the United States. Unfortunately, many of these exemptions expired on 
December 31, 2020, and there has yet to be a process for Section 301 
tariff exemptions put back in its place.

    3a.  Does USTR plan to reinstate an exclusion process for these 
tariffs and if so, when can we expect to see that process start?

    Answer. At the request and recommendation of Senator Portman, I 
have committed to doing a top-to-bottom review of our China trade 
policy, with the goal of making our trade policies more effective and 
more strategic. As part of that review, we are looking at the China 301 
tariffs and the exclusions process. Our plan to re-examine the tariffs 
provides us with important opportunities to craft thoughtful and 
effective responses to China's unfair trade practices.

    Question 4. As I have stated numerous times, I have been supportive 
of the efforts to expand steel and aluminum tariffs under Section 232 
of the Trade Expansion Act of 1962. In my State of West Virginia, steel 
and aluminum producers are still struggling to survive because of 
foreign traders who circumvent our trade laws and evade duty payments 
by transshipping products through third party countries. While I 
appreciate the Biden Administration's commitment to review the 
effectiveness of existing tariffs, many of my constituents and 
businesses are asking when a decision will be made on the tariffs put 
in place by the prior administration.

    4a.  Given your examination of current trade policies, do you 
believe that the current tariffs on steel and aluminum are effective?
    4b.  When can we expect an announcement on the future of section 
232 steel and aluminum tariffs?

    Answer. With respect to the section 232 tariffs on steel and 
aluminum, we have a very significant problem in the global steel and 
aluminum markets that is driven primarily by overcapacity in China and 
other countries, particularly in Southeast Asia and the Middle East. 
The Administration is working to address the market distorting measures 
in economies that have led to overcapacity in the global steel and 
aluminum industries and the resulting national security threats.
    In addition to the thorough review of the section 232 measures and 
product and country exclusions that is currently underway by the 
Department of Commerce, the Administration is also consulting closely 
with various domestic stakeholders and like-minded partners around the 
world sharing similar national security interests to address market 
distorting measures in non-market economies that pose a serious threat 
to the market-oriented U.S. steel and aluminum industries and the 
workers in those industries. On May 17, 2021, the United States and the 
European Union (EU) announced the start of discussions to address 
global steel and aluminum excess capacity and the market distortions 
that result from this excess capacity. The Administration is committed 
to working with the EU and other like-minded partners to address excess 
capacity, ensure the long-term viability of our steel and aluminum 
industries, and strengthen our democratic alliance.
                                 ______
                                 
            Questions Submitted by Senator Chris Van Hollen
    Question 1. The USMCA implementing legislation established the 
Independent Mexico Labor Expert Board (IMLEB) for the purpose of 
monitoring and evaluating the implementation of Mexico's labor reform 
and compliance with its labor obligations. The Board also advises the 
Interagency Labor Committee (co-chaired by the USTR) with respect to 
capacity building activities needed to support such implementation and 
compliance.
    On December 15, 2020, the Board submitted an interim report to 
assist the Interagency Labor Committee and the Congress in their 
assessment of the efforts of Mexico to implement Mexico's labor reform, 
and the manner and extent to which labor laws are generally enforced in 
Mexico. While the first phase of implementation of the new labor 
institutions established under the 2019 reform was delayed until 
November 18, 2020 (due to the Covid-19 pandemic), the Board identified 
a number of serious concerns with Mexico's labor law enforcement 
process that it believed must be addressed promptly. In addition, the 
Board identified issues affecting capacity building activities needed 
to support the implementation of Mexico's labor reform and compliance 
with its labor obligations that also require immediate attention.
    Ambassador Tai, the USMCA imposed new stringent labor standards 
that we hope will become the model for future trade agreements. But 
without effective monitoring and enforcement mechanisms, these labor 
provisions will be toothless.

    1a.  Based on this report from the Independent Mexico Labor Expert 
Board (IMLEB), can you tell us what concrete actions the USTR will be 
prepared to take to address their recommendations, either alone or in 
conjunction with other agencies such as the Department of Labor?

    Answer. USTR has carefully considered the information and 
recommendations included in the IMLEB report, including by integrating 
that information into our monitoring. We are engaging with the 
Government of Mexico on a regular basis to press for progress and 
support their efforts to implement the reforms required by the USMCA, 
including on issues raised by the IMLEB. USTR hosted the first Free 
Trade Commission meeting under the USMCA on May 17 and 18, and plans to 
hold a Labor Council meeting soon. On May 12, USTR submitted the first 
ever USMCA Rapid Response Labor Mechanism (RRM) request for review to 
Mexico. The request asked Mexico to review whether workers at a General 
Motors (GM) facility are being denied the right of free association and 
collective bargaining. This self-initiated action shows the Biden-
Harris Administration's serious commitment to workers and a worker-
centered trade policy. In addition, the Department of Labor has 
launched several significant technical assistance projects to support 
the Government of Mexico in its labor reform and to strengthen workers' 
ability to exercise their labor rights. USTR collaborates closely with 
the Department of Labor. We look forward to continued reporting from 
the IMLEB.

    1b.  Do you anticipate that an increase in funding will be needed 
to adequately carry out these activities?
    1c.  Or does the funding provided under the USMCA implementing 
legislation provide sufficient funding?

    Answer. USTR is using the funding provided under the USMCA 
implementing legislation, which runs through 2023, to dedicate current 
staff and hire additional staff to support the monitor and enforcement 
activities under USMCA. I look forward to working with members of this 
subcommittee to ensure that USTR has adequate resources to fully 
implement and enforce USMCA.

    Question 2. The Rapid Response Mechanism was a novel innovation of 
the USMCA, which ensured that workers could receive relief through 
facility-level enforcement of USCMA labor violations. The USTR's 2021 
policy agenda notes that the Biden Administration is committed to self-
initiating and advancing petitions under this mechanism.

    2a.  Ambassador Tai, could you tell us a little bit more about what 
the USTR has (or intends to do) on this front to initiate petitions?

    Answer. On May 12, USTR submitted the first ever USMCA Rapid 
Response Labor Mechanism (RRM) request for review to Mexico. The 
request asked Mexico to review whether workers at a General Motors (GM) 
facility are being denied the right of free association and collective 
bargaining. This self-initiated action shows the Biden-Harris 
Administration's serious commitment to workers and a worker-centered 
trade policy. Working with the Department of Labor, USTR engages in 
monitoring efforts, and we will not hesitate to self-initiate 
additional matters when we become aware of facts that warrant such 
action. Additionally, the Interagency Labor Committee for Monitoring 
and Enforcement (ILC), which I co-chair with the Secretary of Labor, 
receives and reviews USMCA labor petitions from the public. If the ILC 
determines, in response to an RRM petition, that there is sufficient, 
credible evidence of a denial of rights enabling the good-faith 
invocation of enforcement mechanisms, I will submit a request for 
review to Mexico.

    2b.  How are you monitoring individual facilities, and do you 
believe you have the resources that you need to fully carry this out?
    2c.  If not, what additional funding, resources, or authority would 
be needed to successfully undertake these activities?

    Answer. USTR is using the funding provided under the USMCA 
implementing legislation, which runs through 2023, to dedicate current 
staff and hire additional staff to support the monitor and enforcement 
activities under USMCA. I look forward to working with members of this 
subcommittee to ensure that USTR has adequate resources to fully 
implement and enforce USMCA, including the labor chapter.
                                 ______
                                 
             Questions Submitted by Senator Lisa Murkowski
    Question 1. Ambassador Tai, as we discussed during the April 28 
hearing, China continues to fall short of its seafood purchase 
commitments as outlined in Chapter Six of Phase One of the Economic and 
Trade Agreement between the U.S. and China. This is in spite of the 
fact that China has purchased increasing quantities of U.S. livestock 
and other agricultural exports under the Phase One agreement. This 
seafood-specific failure has resulted in significant economic losses 
for certain fisheries in Alaska and across the Nation, and I urge you 
to take action to alleviate these losses and push China to honor its 
seafood purchase promises. One potential strategy is to secure a 
commitment from China to apply a blanket tariff exclusion on U.S. 
seafood imports. This option would eliminate any difficulties around 
obtaining individual temporary tariff waivers.

    1a.  Will USTR consider pursuing a blanket tariff exclusion to 
restore the Chinese market for American seafood companies?

    Answer. During meetings held under the Phase One Agreement to 
review China's implementation progress, the U.S. side has frequently 
raised concerns about the slow pace of China's purchases of U.S. goods, 
including seafood. While China has established a tariff exclusion 
process that makes tariff exclusions available for U.S. goods like 
seafood that are covered by Chapter Six of the Phase One Agreement, we 
understand from U.S. industry that this tariff exclusion process has 
not been working well for goods in certain industries where the 
practice is to enter into long-term contracts or where importers tend 
to be small, private companies reluctant to make use of the available 
tariff exclusion process as opposed to large State-owned enterprises. 
We have been raising this issue with the Chinese side, and we agree 
with you that a blanket tariff exclusion for these types of goods would 
help to promote increased purchases by Chinese companies.

    Question 2. Ambassador Tai, on top of the devastation that 
Southeast Alaska is seeing from a lost tourism season, we also continue 
to suffer from the impacts of a 25 percent tariff rate on Alaska spruce 
and hemlock. Although the Phase One agreement signed by the Trump 
Administration created a waiver for timber tariffs, Alaska spruce 
exports to China--our primary buyer of spruce--flatlined the last 2 
years, and the future remains uncertain.

    2a.  What specific actions are you taking to help us work through 
this tariff?
    2b.  Is there anything that you need from Congress to help on this 
front?

    Answer. During meetings held under the Phase One Agreement to 
review China's implementation progress, the U.S. side has addressed 
China's tariff exclusion process, and specifically Alaska spruce and 
hemlock, with the Chinese side. We understand that China's tariff 
exclusion process has been regularly used to secure tariff exclusions 
for goods that are covered by Chapter Six of the Phase One Agreement. 
In addition, for Alaska spruce and hemlock, we have clarified that 
China makes tariff exclusions available for these products for 1 year 
from the date that a tariff exclusion has been granted, subject to 
periodic updates on the purchases being made. We have also communicated 
this information to U.S. industry.
                                 ______
                                 
              Questions Submitted by Senator Susan Collins
    Question 1. In February, Sen. Sinema, Sen. Kelley, and I led 
several of our colleagues in writing to President Biden to urge him to 
remove the Section 301 tariffs that had been levied on food and 
beverage imported from the EU since October 2019 due to the large civil 
aircraft subsidies dispute. A few weeks later, on March 5, the White 
House announced that these tariffs would be suspended for an initial 4 
months. I greatly appreciate that the Administration heeded our call 
since these tariffs have been extremely detrimental to small businesses 
in Maine. Is the Administration working with the E.U. to make this 
suspension permanent?

    Answer. USTR is engaging intensively with the EU and the UK in an 
attempt to reach a balanced settlement to the large civil aircraft 
disputes that will ensure a level playing field and address the harms 
to our workers and businesses. We are also seeking a joint vision with 
the EU and the UK to address the challenges posed by non-market 
economic practices of China and other new entrants to the large civil 
aircraft market.
                                 ______
                                 
             Questions Submitted by Senator Lindsey Graham
    Question 1. What will be the impact on small and medium sized 
domestic remodeling/renovation businesses if tariffs are imposed on 
building materials such as flooring and countertops as a response to 
Turkey's Digital Services Tax (DST)?

    Answer. USTR recently requested public comments and held a hearing 
on a proposed Section 301 action arising from the investigation of 
Turkey's Digital Services Tax on May 7, 2021. In determining what 
action, if any, to take, USTR will carefully consider the potential 
impact on small and medium sized businesses.
                                 ______
                                 
              Questions Submitted by Senator John Boozman
    Question 1. I have always been supportive of holding our trading 
partners accountable, especially in the agriculture sector. As you 
know, India is often at the top of the list of employing tariff and 
non-tariff trade barriers as well as providing their domestic 
agriculture producers with support that far exceeds their WTO 
commitments.
    Arkansas grows over half of the U.S. rice crop, and in the past 
decade, rice imports from India have soared, displacing U.S. production 
that simply cannot compete with the generously subsidized Indian rice.
    In late March, USTR announced proposed action against India, among 
other countries, for an investigation into digital services taxes 
imposed by those countries. Part of the list of proposed retaliatory 
duties to be imposed is a 25 percent duty on brown Basmati imports. 
However, rice producers would like to see USTR expand the proposed 
retaliatory duties to all other rice and rice products imported from 
India.
    USTR is currently taking comments on this issue, and I know there 
are plans to hold hearings in May to determine final retaliatory duties 
later this year.
    I cannot stress enough the importance of expanding the proposed 
retaliatory duties to apply to all rice and rice products imported from 
India.
    Ambassador Tai, I appreciate you taking into consideration my 
comments and those of the U.S. rice industry. Can I count on you to 
give this matter your full consideration and support?

    Answer. USTR recently requested public comments and held a hearing 
on a proposed Section 301 action arising from the investigation of 
India's Digital Services Tax on May 10, 2021. In determining what 
action, if any, to take, USTR will carefully consider your comments 
regarding the inclusion of rice and rice products on the final product 
list.

    Question 2. Since the United Kingdom (UK) formally left the 
European Union (EU), the UK offers a significant market for our farmers 
and ranchers. In particular, two of the top ag products from my home 
state--poultry and rice--have significant potential to gain market 
access through a UK Free Trade Agreement.
    Before Brexit, the UK was tied to the EU's practices of employing 
tariff and non-tariff trade barriers. For poultry, it is an 
unscientific ban on products treated with certain pathogen reduction 
treatments, and for rice, it was protectionist tariffs meant to prop up 
EU rice farmers elsewhere in the EU. Now that the UK is free to make 
their own trade deals, I have been supportive of a Free Trade Agreement 
with the UK that is rules-based, mutually beneficial, with standards 
rooted in science.
    What are your plans for a Free Trade Agreement with the UK that 
includes more market access for U.S. farmers and ranchers?

    Answer. As part of the Biden-Harris Administration's focus on the 
Build Back Better agenda and supporting a worker-centric trade policy, 
it is currently reviewing the objectives of the negotiations with the 
United Kingdom that were begun under the prior Administration. 
Agricultural exports, including poultry and rice, are important U.S. 
exports and potential access to the UK and other markets will factor 
into decisions on how best to deepen our trade relationships with key 
partners.

    Question 3. Historically, the European Union (EU) has been an 
important market for U.S. peanut production.
    Unfortunately, since 2018 the US peanut industry has lost 
approximately $160 million in the EU market due to non-tariff trade 
barriers regarding additional aflatoxin testing protocols above and 
beyond the testing done in the US.
    The U.S. peanut industry has engaged with both USTR and USDA and is 
eager to find a solution to this issue. What further steps need to be 
taken to remedy this situation?

    Answer. We recognize the importance of the European market for U.S. 
peanut production, and the challenges that concern the industry. We 
will continue to work closely with USDA and the industry to address 
this issue, including pursuing a solution with the Europeans.
                                 ______
                                 
          Questions Submitted by Senator Shelley Moore Capito
    Question 1. Last week, I joined Senator Portman and a group of 38 
bipartisan Senators to echo support for the Administration to continue 
efforts to address unfair Chinese trade practices while also restarting 
the Section 301 Tariff Exclusion Process. Doing so would provide 
domestic manufacturers with much needed relief.

    1a.  Can you provide and update on where things stand on this 
matter at USTR?
    1b.  When can manufacturers expect this process to be up and 
running?

    Answer. At the request and recommendation of Senator Portman, I 
have committed to doing a top-to-bottom review of our China trade 
policy, with the goal of making our trade policies more effective and 
more strategic. As part of that review, we are looking at the China 301 
tariffs and the exclusions process. Our plan to re-examine the tariffs 
provides us with important opportunities to craft thoughtful and 
effective responses to China's unfair trade practices.

    Question 2. Last summer, it was brought to my attention that Jingye 
Group, a Chinese steel and iron manufacturer, had purchased British 
Steel--a steel manufacturer with facilities across the UK and Europe. 
As we continue to place focus on China's trade practices, I worry that 
acquisitions such as these could lead to the circumvention of U.S. 
trade law.

    2a.  Are you aware of this matter or similar instances?

    Answer. USTR is aware of the acquisition of British Steel by Jingye 
Group and is monitoring this development closely. We will continue to 
raise concerns about the foreign investment activities of Chinese steel 
producers in fora such as the OECD Steel Committee and the Global Forum 
on Steel Excess Capacity, and bilaterally with those countries 
affected. In addition to this acquisition, we are also aware of recent 
cross-border and joint venture investments by Chinese steel enterprises 
in the UK and in countries such as Indonesia, Malaysia, the 
Philippines, Cambodia, and others. USTR will continue to consult with 
domestic stakeholders and work closely with like-minded partners, such 
as the UK and the EU, to find creative and effective responses to 
prevent further job and technology losses in sectors China is 
targeting.

    2b.  Can you commit to addressing these concerns during your 
continued negotiations with the United Kingdom?

    Answer. The Administration is currently reviewing the objectives of 
the negotiations with the United Kingdom. We intend to work closely 
with the UK and other like-minded partners to address excess capacity 
and market distortive measures through all the appropriate mechanisms 
and engagements we have with these partners.

    Question 3. As a result of the pandemic and indefinite work from 
home policies, many Americans are considering the option to move to 
rural areas, like my State of West Virginia. However, lumber prices 
have more than tripled since last spring and are further increased by 
tariffs on Canadian softwood lumber.

    3a.  Is your team working on a new softwood lumber agreement with 
Canada?
    3b.  Will you make this a priority?

    Answer. I discussed softwood lumber with my Canadian counterpart in 
our first USMCA FTC meeting and we agreed to keep in touch on the 
issue. The United States is open to resolving our differences with 
Canada over softwood lumber, but it would require addressing Canadian 
policies that create an uneven playing field for the U.S. industry. 
Unfortunately, to date, Canada has not been willing to address these 
concerns adequately.

    Question 4. The Phase One Agreement with China addressed key trade 
imbalances between our two nations, such as forced tech transfer, IP 
theft, and currency manipulation.

    4a.  Do you intend to continue to build upon the framework of the 
Phase One deal to further solidify China's commitment to uphold the 
changes agreed upon?

    Answer. With regard to the Phase One Agreement, we are committed to 
ensuring China's implementation of its obligations under the Agreement. 
We will continue to make use of and push the tools that we have for the 
benefit of U.S. farmers, ranchers, manufacturers, service suppliers, 
and small businesses.
    The Administration is currently engaged in a comprehensive and 
coordinated review of U.S. strategy for addressing the many challenges 
that China poses, both for the United States and the world. USTR is 
actively participating in the development of this strategy, which will 
encompass all policy areas, including trade policy.

    4b.  What additional areas do you believe should be addressed/
targeted?

    Answer. With regard to the Administration's trade policy toward 
China, USTR is currently conducting a top-to-bottom review of the U.S.-
China trade relationship, with a view toward ensuring that our trade 
policy supports and complements the Administration's broader China 
strategy. A key focus of this effort is on China's non-market and 
unfair policies and practices that are inadequately disciplined by the 
WTO or the Phase One Agreement, such as industrial subsidies, excess 
capacity, forced technology transfer, and State-owned enterprises. The 
results of this review, as well as our ongoing engagement with allies 
and like-minded partners, with whom we share values and interests, will 
inform our thinking of how we proceed.
                                 ______
                                 
              Questions Submitted by Senator John Kennedy
    Question 1. As you know we are still under a declared national 
public health emergency and we continue to have supply chain challenges 
particularly related to Personal Protective Equipment (PPE). Recently 
United States Customs and Border Protection seized imports from the 
world's largest rubber glove manufacturer, Top Glove in Malaysia, for 
sufficient evidence of its use of forced labor. This underscores the 
need for domestically manufactured PPE. We need to stand up and support 
US-based PPE manufacturing and as part of that provide Section 301 
exclusions for essential manufacturing equipment and raw materials 
needed to establish and support domestic PPE production.

    1a.  Given the ongoing public health emergency and resulting need 
for PPE, would you consider having a separate fast-track Section 301 
exclusion process for essential manufacturing equipment and raw 
materials needed to establish and support domestic PPE production?''

    Answer. In March 2020, USTR established a process in which U.S. 
stakeholders could provide comments on possible modifications to remove 
the additional 301 duties from medical-care products. Medical-care 
products included products directly used to treat COVID-19 or to limit 
the outbreak and products used in the production of needed medical-care 
products. Based on the comments received, in December 2020, USTR 
published a list of exclusions for products to combat COVID-19. 
Currently, these exclusions are scheduled to remain in effect until 
September 30, 2021.
    As you are aware, I have committed to doing a top-to-bottom review 
of our China Trade policy. As part of that review, we are reviewing the 
China 301 tariffs and the exclusions process, including the exclusions 
for products to combat COVID-19.

    Question 2. Do you believe China is a ``developing country?''

    Answer. In the World Trade Organization, Members are currently 
permitted to self-declare as ``developing countries'' to take advantage 
of certain flexibilities in WTO rules. However, WTO Members recognized 
at the time of China's accession to the WTO that China should not be 
able to avail itself of flexibilities afforded to other developing 
countries. China was permitted to negotiate only a limited set of 
flexibilities at the time of its accession. The United States believes 
that China is an advanced, wealthy and influential Member of the WTO 
that can negotiate the flexibilities it may need in any future WTO 
negotiation, and that China should not be able to avail itself of any 
blanket flexibilities reserved for developing countries.

    Question 3. Do you believe, like the last administration declared, 
that China is committing crimes against humanity towards the Muslim 
Uyghur population?

    Answer. Secretary of State Blinken has made clear that China is 
committing genocide and crimes against humanity. In the 2020 Country 
Reports on Human Rights Practices, issued on March 30, 2021, the State 
Department declared that ``[g]enocide and crimes against humanity 
occurred during the year against the predominantly Muslim Uyghurs and 
other ethnic and religious minority groups in Xinjiang.'' I agree with 
this assessment. China should immediately end these atrocities and 
respect the human rights of Uyghurs and all others across China.

    Question 4. How do you intend on preventing the import of goods 
made with forced labor and the export of technologies used for 
repression?

    Answer. I commit to utilizing the full range of trade tools at my 
disposal to combat forced labor and the export of technologies used for 
repression. This includes ensuring President Biden's Build Back Better 
agenda promotes a trade agenda that respects the dignity of work and 
pursues a fair, rules-based international trading system and does not 
undermine our core values. A fair international trading system is one 
in which individuals are not forced to work against their will, and 
products made out of forced labor do not enter the global trading 
system. I will champion trade policies that support good jobs that are 
protected by robust and enforced labor laws, including laws that 
prohibit forced labor in traded goods.
    One recent example of our commitment is that in the first Free 
Trade Commission of the United States-Mexico-Canada Agreement (USMCA), 
held just this month, the United States, Mexico, and Canada discussed 
our shared obligation to ensure the Agreement's forced labor import 
prohibition and continued our collaboration to bolster each other's 
efforts in this regard. The USMCA includes a ground-breaking forced 
labor provision that obligates all Parties to ``prohibit the 
importation of goods into its territory from other sources produced in 
whole or in part by forced or compulsory labor, including forced or 
compulsory child labor.''
    In addition, USTR uses the worker rights eligibility criteria of 
its trade preference programs to address labor issues, including the 
elimination of forced labor. For example, we recently closed a review 
of Uzbekistan's GSP eligibility after trade engagement on this issue 
encouraged the Uzbek government to eliminate the systematic use of 
forced labor in its annual cotton harvest. Utilizing our trade tools to 
combat forced labor is also a part of the White House's National Action 
Plan to Combat Human Trafficking. Our agency is an active member of the 
President's Interagency Task Force on Trafficking and the Forced Labor 
Enforcement Task Force, as well as various other interagency committees 
to coordinate efforts to combat forced labor.
    USTR is also engaged with other agencies to ensure that the U.S. 
technology is not exported for use in repression overseas. We are 
active participants in discussions over the full range of existing 
tools, including investment screening and export controls such as the 
Entity List and the Military End-User (MEU) List maintained by the 
Department of Commerce.

    Question 5. China's fallen back on its word to purchase $468 
billion worth of U.S. goods, as they agreed to during the ``Phase One'' 
agreement. How do you intend on holding them to their word?

    Answer. China's purchases shortfall is certainly in our sights. 
These commitments are important to the United States economically, but 
they are also important as commitments that China undertook of its own 
free will to make. We will work to ensure that these commitments are 
implemented, and where they are not, we will utilize the tools 
available, including those under the Phase One Agreement, to stand up 
for U.S. farmers, ranchers, manufacturers, service suppliers, and small 
businesses.

    Question 6. Prior to the lack of quorum under the Trump 
Administration the World Trade Organization faced significant criticism 
because of its sluggish dispute settlement process.

    6a.  Is the administration committed to maintaining an active role 
in reforming and upgrading the World Trade Organization, or does it 
intend to allow for the revival of the dysfunctional appellate body?

    Answer. The Biden Administration shares longstanding bipartisan, 
bicameral concerns about the WTO's dispute settlement system. Dispute 
settlement overreaching, including by the Appellate Body, undermines 
support in the U.S. for the international trading system. The 
Administration will actively engage in efforts to reform the WTO, 
including dispute settlement, in order to build a more fair trading 
system and support the WTO as a forum for discussion and negotiations 
where countries come together to find joint solutions to common 
problems.

    Question 7. Do you intend to purse Free Trade Agreement talks with 
Iceland?

    Answer. The Biden Administration highly values our economic and 
security relationship with Iceland. However, as the President has made 
clear, we will not be engaging in new trade agreements before we make 
the necessary investments at home.

    Question 8. Do you believe China is actively trying to build a 
presence in the artic?

    Answer. Yes. China is actively trying to build a presence in the 
Arctic and has publicly announced its intent to increase its 
investments there, including through the development of research and 
observation platforms, arctic shipping routes, and enhanced operational 
capabilities, such as icebreakers. In addition, China has sought to 
create economic leverage and gain a foothold and in the region through 
direct investments in land and infrastructure. Beijing includes the 
Arctic region in its ``Polar Silk Road,'' as part of President Xi's 
signature Belt and Road Initiative.

    Question 9. Is it a priority of the administration to enhance 
security cooperation in the artic to combat increased Chinese and 
Russian influence?

    Answer. Yes. We are working with and through our allies and 
partners to enhance U.S. presence and influence in the Arctic. The 
United States continues to participate in Arctic exercises and training 
to deepen military interoperability with allies and partners. The 
Administration currently discusses security and defense challenges in 
the High North through NATO, bilateral dialogues, and regional 
consultations with like-minded Arctic states. We intend to work with 
Arctic states to uphold international law and standards in the long-
standing spirit of cooperation among Arctic nations in the region. We 
will not hesitate to hold any state accountable for actions that run 
counter to these commitments, or the interests of the United States, 
its allies and partners.

    Question 10. Do you intend to purse Free Trade Agreement talks with 
New Zealand?

    Answer. The Biden Administration highly values our economic and 
security relationship with New Zealand. We are working in close 
connection with New Zealand on trade issues as it hosts and chairs APEC 
(Asia Pacific Economic Cooperation). However, as the President has made 
clear, we will not be engaging in new trade agreements before we make 
the necessary investments at home.

    Question 11. Will you prioritize our expanding trade relations with 
both countries?

    Answer. Yes, our trade relations with both countries are important 
priorities. We regularly engage Iceland and New Zealand bilaterally, 
including through our Trade and Investment Framework Agreements (TIFA), 
to explore ways to expand and enhance our trade ties.

    Question 12. Given recent claims by the Mexican government that 
Mexico's hydrocarbons resources are not covered under USMCA, can you 
state your position regarding how hydrocarbons should treated with 
regard to USMCA?

    Answer. Our view is that the USMCA applies to Mexico's energy 
sector; this is very clear in the USMCA text.

    Question 13. The natural gas and oil industry has experienced 
significant regulatory challenges in Mexico by Mexican regulators 
attempting to complicate and delay investor operations in Mexico to the 
advantage of PEMEX, Mexico's state-owned oil company.

    13a.  Can you detail how you and USTR would ensure that American 
and other foreign investors in Mexico are treated fairly and ensure the 
USCMA provisions on fair treatment will be enforced?

    Answer. We have raised our concerns with Mexico's treatment of U.S. 
energy investors frequently, including during bilateral meetings with 
Mexico on May 17 and during the inaugural meeting of the USMCA Free 
Trade Commission on May 18.

    Question 14. Investor State Dispute Settlements or ISDS, is an 
integral part of USMCA and many other FTA's that the U.S. has around 
the world.

    14a.  Can you please state how you and USTR would prioritize the 
enforcement of ISDS under USMCA and the inclusion of strong ISDS 
provisions in other FTA's the U.S. may pursue?

    Answer. I am committed to enforcing the USMCA agreement, including 
the provisions in the Investment Chapter. Regarding other FTAs, 
President Biden has stated that he does not believe corporations should 
get special tribunals in trade agreements that are not available to 
other organizations and that he opposes the ability of private 
corporations to attack labor, health, and environmental policies 
through the investor-state dispute settlement.

    Question 15. Can you please state your view on how the current Sec. 
301 tariffs on imported goods from Mexico and Sec. 232 tariffs on steel 
and aluminum will be handled under your leadership at USTR?

    Answer. I have committed to doing a top-to-bottom review of our 
China trade policy, with the goal of making our trade policies more 
effective and more strategic. As part of that review, we are looking at 
the China 301 tariffs and the exclusions process. Our plan to re-
examine the tariffs provides us with important opportunities to craft 
thoughtful and effective responses to China's unfair trade practices.
    With respect to the section 232 tariffs on steel and aluminum, we 
have a very significant problem in the global steel and aluminum 
markets that is driven primarily by overcapacity in China and other 
countries, particularly in Southeast Asia and the Middle East. The 
Administration is working to address the market distorting measures in 
economies that have led to overcapacity in the global steel and 
aluminum industries and the resulting national security threats.
    In addition to the thorough review of the section 232 measures and 
product and country exclusions that is currently underway by the 
Department of Commerce, the Administration is also consulting closely 
with various domestic stakeholders and like-minded partners around the 
world sharing similar national security interests to address market 
distorting measures in non-market economies that pose a serious threat 
to the market-oriented U.S. steel and aluminum industries and the 
workers in those industries. On May 17, 2021, the United States and the 
European Union (EU) announced the start of discussions to address 
global steel and aluminum excess capacity and the market distortions 
that result from this excess capacity. The Administration is committed 
to working with the EU and other like-minded partners to address excess 
capacity, ensure the long-term viability of our steel and aluminum 
industries, and strengthen our democratic alliance.

    Question 16. Natural gas and LNG have been instrumental in reducing 
GHG emissions around the world and have served as a strong enticement 
to help the U.S. achieve policy goals and partnerships with other 
countries. That leverage should only be strengthened and improved in 
coming years to maintain and grow U.S. leadership abroad.

    16a.  Can you please elaborate on how USTR under your leadership 
will support and encourage growing US energy exports, particularly that 
of LNG around the world?

    Answer. USTR is committed to the Biden-Harris Administration's 
whole-of-government approach to reduce GHG emissions and reach our net 
zero economy objectives. USTR will work hard to ensure all U.S. exports 
are competing on a level playing field in the global market.
                                 ______
                                 
              Questions Submitted by Senator Bill Hagerty
    Question 1. The price of building or renovating a home has recently 
sky-rocketed, and demand for lumber has reached record highs. Lumber 
futures for delivery in May 2021 are at an all-time high and roughly 
four times the typical price for this time of year.\1\ Forestry in 
Tennessee provides more than 98,000 jobs and has an annual economic 
impact of more than $24 billion.\2\ Most of Tennessee's lumber 
production has been hardwood lumber.\3\ The U.S. hardwood lumber 
industry relies heavily on exports; over the last decade, China has 
imported about a quarter of all boards produced by U.S. hardwood 
sawmills.\4\ These exports of U.S. hardwood have an effect on reducing 
the massive trade deficit with China. China has extended the exclusion 
of tariffs on U.S. hardwood, but that exclusion is set to expire on 
September 16, 2021.

    1a.  What is USTR doing to ensure our continued ability to export 
Tennessee lumber to countries like China?

    Answer. During meetings held under the Phase One Agreement to 
review China's implementation progress, the U.S. side has frequently 
pressed China to increase the pace of its purchases of U.S. goods. At 
times, the U.S. side has also raised concerns related to China's tariff 
exclusion process. With regard to hardwood lumber, as you have noted, 
the blanket exclusion for this product expires on September 16, 2021. 
Given China's past practice regarding extensions of existing 
exclusions, we do not expect China to extend the blanket exclusion for 
hardwood lumber until shortly before its expiration.

    Question 2. I am very concerned about threats that Americans faces 
from the Chinese Communist Party (CCP) and their persistent attempts to 
steal American business secrets and proprietary information. Far too 
many nations and international organizations refuse to hold the CCP 
accountable.
---------------------------------------------------------------------------
    \1\ Ryan Dezember, Lumber Prices Break New Records, Adding Heat to 
Home Prices, Wall St. J. (May 3, 2021), https://www.wsj.com/articles/
record-lumber-prices-lift-sawmills-while-homeowners-do-it-yourselfers-
pay-up-11620034201.
    \2\ Andrew Muhammad & Adam Taylor, Implications of COVID-19 on 
Tennessee Exports of Forest Products, UT Extension Inst. of 
Agriculture, at 3, https://extension.tennessee.edu/publications/
Documents/W913.pdf.
    \3\ See, e.g., Rhonda M. Mathison & Doug Schnabel, Tennessee's 
Timber Industry--An Assessment of Timber Product Output and Use, 2007, 
USDA--Forest Service, https://www.srs.fs.usda.gov/pubs/rb/
rb_srs152.pdf.
    \4\ Peter Buxbaum, China Trade and COVID-19, Am. J. of 
Transportation (May 26, 2020), https://ajot.com/premium/ajot-china-
trade-and-covid-19-a-one-two-punch-hitting-us-hardwood-producers.

    2a.  Does the Biden Administration and USTR have an overall 
strategy to challenge China's aggressive and unfair trade efforts 
around the world?
    2b.  What role will your office play in the Administration's 
broader strategy toward China?
    2c.  Are you confident that other countries will join our efforts? 
What will it cost the United States to get other countries onboard?
    2d.  How is USTR approaching China's compliance with the U.S.-China 
Phase One Agreement?

    Answer. The Administration is engaged in a comprehensive and 
coordinated review of U.S. strategy for addressing the many challenges 
that China poses, both for the United States and the world. USTR is 
actively participating in the development of this strategy, which will 
encompass all policy areas, including trade policy.
    With regard to the Administration's trade policy toward China, USTR 
is currently conducting a top-to-bottom review of the U.S.-China trade 
relationship, with a view toward ensuring that our trade policy 
supports and complements the Administration's broader China strategy. A 
key focus of this effort is on the many harmful and unfair trade 
policies and practices pursued by China that currently evade discipline 
by WTO rules.
    The United States has shared values and interests with like-minded 
partners across the world. Addressing China's non-market and unfair 
practices is critical for U.S. and our partners' workers and citizens, 
and for the world trading system. We need to be creative and find 
effective responses, to prevent further job and technology losses in 
sectors China is targeting.
    The Phase One Agreement is the agreement that we have, and we are 
committed to ensuring China's full implementation of its obligations 
under the Agreement. We will continue to make use of and push the tools 
that we have for the benefit of U.S. farmers, ranchers, manufacturers, 
service suppliers, and small businesses.

                          SUBCOMMITTEE RECESS

    [Whereupon, at 10:48 a.m., Wednesday, April 28, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]