[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                  HEARING ON COUNTERING CHINA'S TRADE
                  AND INVESTMENT AGENDA: OPPORTUNITIES
                        FOR AMERICAN LEADERSHIP

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

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON TRADE

                                 OF THE

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

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION
                               __________

                             APRIL 18, 2023
                               __________

                            Serial No. 118-9
                               __________

         Printed for the use of the Committee on Ways and Means
         
         
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                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE
                    
53-242                     WASHINGTON : 2024   

                      COMMITTEE ON WAYS AND MEANS

                    JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida               RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska               LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania             MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona            JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois               EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio                  BILL PASCRELL, Jr., New Jersey
JODEY ARRINGTON, Texas               DANNY DAVIS, Illinois
DREW FERGUSON, Georgia               LINDA SANCHEZ, California
RON ESTES, Kansas                    BRIAN HIGGINS, New York
LLOYD SMUCKER, Pennsylvania          TERRI SEWELL, Alabama
KEVIN HERN, Oklahoma                 SUZAN DelBENE, Washington
CAROL MILLER, West Virginia          JUDY CHU, California
GREG MURPHY, North Carolina          GWEN MOORE, Wisconsin
DAVID KUSTOFF, Tennessee             DAN KILDEE, Michigan
BRIAN FITZPATRICK, Pennsylvania      DON BEYER, Virginia
GREG STEUBE, Florida                 DWIGHT EVANS, Pennsylvania
CLAUDIA TENNEY, New York             BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota        JIMMY PANETTA, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio
                       Mark Roman, Staff Director
                 Brandon Casey, Minority Chief Counsel
                                 ------                                

                         SUBCOMMITTEE ON TRADE

                    ADRIAN SMITH, Nebraska, Chairman
VERN BUCHANAN, Florida               EARL BLUMENAUER, Oregon
DARIN LaHOOD, Illinois               BRIAN HIGGINS, New York
JODEY ARRINGTON, Texas               DAN KILDEE, Michigan
RON ESTES, Kansas                    JIMMY PANETTA, California
CAROL MILLER, West Virginia          SUZAN DelBENE, Washington
LLOYD SMUCKER, Pennsylvania          DON BEYER, Virginia
GREG MURPHY, North Carolina          LINDA SANCHEZ, California
GREG STEUBE, Florida                 TERRI SEWELL, Alabama
MICHELLE FISHBACH, Minnesota
DAVID KUSTOFF, Tennessee
                            C O N T E N T S

                              ----------                              
                                                                   Page

                           OPENING STATEMENTS

Hon. Adrian Smith, Nebraska, Chairman............................     1
Hon. Earl Blumenauer, Oregon, Ranking Member.....................     2
Advisory of April 18, 2023 announcing the hearing................     V

                               WITNESSES

Mark McHargue, President, Nebraska Farm Bureau...................     5
Jamieson Greer, Partner, International Trade, King & Spalding....    10
Thomas Duesterberg, Senior Fellow, Hudson Institute..............    32
Matthew P. Goodman, Senior Vice President for Economics, Center 
  for Strategic & International Studies..........................    50
Ray Houseman, Legislative Director, United Steelworkers..........    60

                   PUBLIC SUBMISSIONS FOR THE RECORD

Public Submissions...............................................    99

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                  CHINA'S TRADE AND INVESTMENT AGENDA:
                       OPPORTUNITIES FOR AMERICAN
                               LEADERSHIP

                              ----------                              


                        TUESDAY, APRIL 18, 2023

                  House of Representatives,
                             Subcommittee on Trade,
                               Committee on Ways and Means,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:15 p.m., in 
Room 1100, Longworth House Office Building, Hon. Adrian Smith 
[chairman of the subcommittee] presiding.
    Chairman SMITH of Nebraska. The subcommittee will come to 
order.
    Good afternoon. The subcommittee I am glad to lead here. I 
appreciate the opportunity to work with all of you this 
Congress, especially Ranking Member Blumenauer and each member 
of this committee.
    I would also like to thank our witnesses for being here 
today. This is, as you know, an important topic. Today's 
hearing examines why the United States must lead on trade, 
especially in the face of China's aggressive trade and 
investment agenda.
    Concerns about the Chinese Communist Party's global 
influence and predatory trade practices are not only shared by 
every member of this committee. These concerns are bipartisan 
and bicameral. We have seen firsthand how China seeks to 
weaponize trade to expand its influence and undercut U.S. 
workers and values. These actions should create a mandate for 
the United States of America to lead on trade issues.
    But unfortunately, such a mandate has seemingly gone 
unnoticed by the Administration. Across the board, China seeks 
to dominate global trade and supply chains. They are using all 
tools at their disposal to advance their Made in China 2025 
initiative.
    Today we will hear why the United States must lead from a 
position of strength. We can do this by addressing the CCP's 
practices directly, while simultaneously using trade programs, 
agreements, and other tools to show we are a reliable and 
attractive alternative for nations around the world.
    The CCP seeks to erode America's competitive edge through 
intellectual property theft, discrimination against American 
exporters and investors, and a wide range of advantages 
provided to state-owned enterprises within China. They have 
made no secret of their desire to replace the United States as 
the dominant global power. We cannot and will not allow this to 
happen.
    China continues to grow its global ambitions. Take, for 
example, the Belt and Road Initiative, which has become a tool 
for the CCP to trap partners in developing countries into 
endless cycles of debt and control. This is happening in every 
region of the world, from the Indo-Pacific to our own backyard 
right here, in the Western Hemisphere. No country is immune to 
this aggressive behavior. Partners like Australia, South Korea, 
and Lithuania have experienced this firsthand. While we can be 
encouraged these instances of attempted economic coercion 
backfired, Beijing continues its brazen attempts to bully 
nations into submission.
    In my view, there is no treading water on trade matters. 
You are either moving ahead or you are losing ground. And right 
now we are losing ground while China forges ahead with a trade 
agenda that cheats to shape the global playing field in its 
favor.
    Our trading partners around the world are hoping the U.S. 
will stand up and provide a unified, bipartisan American trade 
agenda to hold the CCP and other bad actors accountable. We can 
do this while partnering in a deeper and more consequential way 
with our allies.
    The role of Congress cannot be ignored for this effort, 
which is why Congress must use its constitutionally-given 
authority to set deliverables and provide critical oversight of 
all trade matters. Crafting a Trade Promotion Authority bill to 
put Congress in the driver's seat, reauthorizing critical trade 
programs aimed at increasing American competitiveness, and 
continuing efforts to add consequences for trades--for China's 
trade practices are all things we can and should pursue right 
now.
    Our trade policy is at its strongest, its most durable, 
effective, sustainable, and inclusive when elected 
representatives are driving and shaping it. We saw this 
firsthand as this committee reinvigorated our North American 
trading relationships through the United States-Mexico-Canada 
Agreement, USMCA. We need to build on and replicate this 
important work, and I am confident this committee can do so. I 
am excited to get to work.
    Chairman SMITH of Nebraska. With that, I am pleased to 
recognize the ranking member from Oregon, Mr. Blumenauer, for 
his opening statement.
    Mr. BLUMENAUER. Thank you much, Mr. Chairman. I agree with 
your enthusiasm and some of the optimistic things that we can 
do. We had similar hearings in the last Congress to highlight 
the Chinese Government's state-led, non-market, anti-
competitive approach that threatens American workers and 
business. I hope we can all agree that now is the time to move 
from rhetoric to action.
    We led efforts to pass forceful legislation in the trade 
title in the America COMPETES Act that helped workers and firms 
who have been displaced by offshoring to China. It incorporated 
many of the concepts and values that enjoyed the broad 
bipartisan support that you mentioned in terms of the NAFTA 
revisions. We would close the de minimis loophole, strengthen 
our trade remedy laws, create an outbound screen for Chinese 
investments, and update the miscellaneous tariff bill to 
exclude finished goods, more than half of which come from China 
and undercut American manufacturers. This legislation is meant 
to level the playing field so that American workers and 
businesses are no longer disadvantaged by the Chinese double 
standard.
    For some reason, Mr. Chairman, we were unable to move this 
forward with Republican support in the last Congress. But I 
hope that we can do that now to match again the rhetoric with 
legislative action. American workers and businesses can no 
longer wait.
    The USTR's report on Congress on China's WTO compliance 
makes clear that China has an abominable record: 20 years of 
WTO membership, and they still embrace a non-market approach, 
despite China's own commitments that it would pursue open-
market-oriented policies. If anything, China has doubled down 
on its anti-competitive, trade-distorting practices.
    Today China is the world's leading offender in creating 
non-market capacity, as evidenced by the severe and persistent 
excess capacity in several industries, particularly steel and 
aluminum. And of course, the Chinese production methods are 
some of the dirtiest in the world.
    The resulting overproduction and pollution has distorted 
global markets and contributed to massive increase in carbon 
pollution, harming American workers and manufacturers, as well 
as third countries, where American exports of steel products 
compete with exports from China.
    We will hear from one of our witnesses today, Roy Houseman 
from the United Steelworkers, and about legislation my friend, 
Terri Sewell, has introduced to address some of these unfair 
trade practices.
    China continues to exploit the loophole in our customs 
laws. Some Chinese companies have developed a business model 
centered on exploiting the de minimis provision to evade 
oversight at the border, avoid paying duties, and undercutting 
American companies who are playing by the rules. Because of 
this loophole, there is no way to tell how many of the more 
than two million packages a day contain products made from self 
forced labor, intellectual property theft, or otherwise 
dangerous.
    The Chinese textile industry benefits from the deplorable 
treatment and forced labor of the Uyghurs and other minorities 
in the Xinjiang region of China. Lack of oversight at the 
American border makes it even more difficult for CBP to 
intercept these shipments. And as noted by Mr. Houseman, the de 
minimis loophole can even allow evasion of the Uyghur Forced 
Labor Prevention Act. Closing the de minimis loophole and 
addressing forced labor, the fruits of modern-day slavery have 
no place in the American market.
    This subcommittee can send a clear signal to China that the 
United States will unequivocally protect worker and human 
rights, and we must continue to encourage our allies to boldly 
respond to China's unfair practices. I stand ready to work with 
my Republican colleagues on China-related legislation and turn 
our rhetoric into action.
    I appreciated the optimistic tone that you took, Mr. 
Chairman. I think there is a lot of common ground that we can 
build upon, and I look forward to working with you and the 
committee on that.
    Chairman SMITH of Nebraska. Thank you. Now I am pleased to 
recognize the chairman of the full Ways and Means Committee, 
Chairman Smith, for his opening statement.
    Chairman SMITH of Missouri. Thank you, Chairman Smith, 
Ranking Member Blumenauer, for holding this hearing.
    Today's subcommittee hearing comes at a time when Americans 
are increasingly concerned about the Chinese Communist Party 
and its harmful influence around the world, especially here at 
home. Republicans and Democrats often talk about our 
differences, but today we are here to share a common message: 
the folks who fuel, feed, and build our country have become 
collateral damage in China's aggressive trade agenda; it's time 
we stood up for them; it's time to combat China's human rights 
abuses, predatory trade practices, espionage, and theft that 
for too long have threatened our supply chains and cheated 
American farmers, manufacturers, families, and workers.
    As we sit here, the Communist--the Chinese Communist Party 
is unleashing a wide range of aggressive tactics in its attempt 
to dominate critical supply chains, including massive 
industrial subsidies, forced technology transfers, and 
intellectual property theft. The CCP is spreading its harmful 
influence across the globe. I saw this firsthand in South 
America, during my first international trip as Ways and Means 
Chairman.
    China is increasingly active, including in our own 
backyard, and a bipartisan response is needed. I am concerned 
that the White House's decision to exclude Congress from trade 
only emboldens China, and ignores the voices of the American 
people. Frameworks and dialogues are no substitute for 
congressionally binding action on trade.
    We ought to put workers and farmers at the center of 
American trade policy. Americans are still owed clarity and 
answers from the White House about China's compliance with 
Phase One obligations and plans to hold it accountable.
    We should build on USMCA's progress through strong 
enforcement, including standing with Americans who are harmed 
when our trading partners do not live up to their end of the 
agreement.
    We should be developing a plan to use our authority over 
trade, and to use our leverage as a nation to strengthen 
critical supply chains and reduce dependence on adversarial 
nations like China and Russia.
    This is a bipartisan effort, and I am hopeful we can make 
headway today.
    Chairman SMITH of Missouri. I yield back my time, Mr. 
Chairman.
    Chairman SMITH of Nebraska. Thank you. I will now introduce 
our witnesses.
    Today we are joined by five witnesses. First, Mark 
McHargue, president of none other than the Nebraska Farm 
Bureau.
    It is great to have you before the subcommittee, to----
    Mr. BLUMENAUER. The Nebraska Farm Bureau?
    Chairman SMITH of Nebraska. That is right, the Nebraska 
Farm Bureau.
    For your perspective, it is certainly helpful for you to be 
on the panel. Thank you for making the trip to Washington.
    Second, we have Jamieson Greer, a partner at King and 
Spalding, and former USTR chief of staff.
    Thank you for being here.
    Third, we have Thomas Duesterberg, senior fellow at the 
Hudson Institute.
    Fourth, we have Matthew Goodman, senior vice president and 
Simon chair in political economy at the Center for Strategic 
and International Studies, otherwise known as CSIS.
    And fifth, we have Roy Houseman, the legislative director 
of the United Steelworkers.
    Mr. McHargue, your written statement will be made a part of 
the record, and you are now recognized for five minutes.

   STATEMENT OF MARK McHARGUE, PRESIDENT, NEBRASKA FARM BUREAU

    Mr. McHARGUE. Well, good afternoon, Chairman Smith, and 
Chairman Smith, and Ranking Member Blumenauer, and members of 
the subcommittee. Thank you for the opportunity to testify 
today.
    My name is Mark McHargue. I am a conventional and organic 
row crop farmer and hog producer from Merrick County, Nebraska. 
I currently serve as president of Nebraska Farm Bureau, and I 
also serve on the board of American Farm Bureau, as well as 
serve on their trade committee. Nebraska Farm Bureau Federation 
is pleased to offer these comments on the current state of the 
agricultural trade relationship between the United States and 
China.
    China remains a vital market for Nebraska goods, and is 
consistently a top-three market for Nebraska products year in 
and year out. At the same time, American and Nebraskan farmers 
and ranchers are also aware and are also concerned about the 
current geopolitical and national security concerns that exist 
between our nations.
    Prior to 2018, Nebraska's agricultural exports to China 
ranged about $936 million to a little over a billion. 
Currently, that equates to about 15 percent of Nebraska's total 
exports. The value at that time, prior to 2018, was about 
$20,000 per farm. That would equate to my farm, as well. In 
2022 we set a new record of selling agricultural goods into 
China at $40 billion or so. When you divide that by per farm, 
that's about $55,000 per farmer or rancher in Nebraska.
    But I also need to point out that, despite these 
significant growths, U.S. market share in China's market 
remained relatively stagnant in 2022, and about 18 percent of 
the ag market was U.S. market. That has declined from about 22 
percent from 2013 to 2017.
    I run through all this data to highlight just how complex 
the relationship is between the significant competitor and 
customers. Farmers and ranchers have the same geopolitical and 
national security, copyright, and trade law concerns that most 
of you have and many in the industry have. At the same time, 
China's role as a significant consumer of raw U.S. 
commodities--not just high-value, processed foods, but raw 
commodities--they are also able to move grain and livestock 
markets any day by simply making an order or, in the case of 
2018 or 2019, not placing an order.
    Given everything happening in the world today, the United 
States should be actively working every day to diversify our 
list of trading partners. Quite frankly, the biggest 
disappointment that we in agriculture have with the Biden 
Administration has been their non-existent effort to find new 
trading partners and pursue negotiations on any new free trade 
agreement. If I had the opportunity to sit down with President 
Biden today, I would tell him two things as it relates to 
trade, specifically with China.
    Number one, sitting back and allowing the rest of the world 
to finalize new free trade agreements that increase market 
access and lower tariffs isn't leading, and it sure doesn't 
send the right message to our competitors or allies. Rejoining 
the CPTPP and re-engaging with the UK, as well as countries 
like Kenya or--on actual free trade agreements would be a great 
place to start.
    Whether we like it or not, number two, China is an 
important customer. Again, we need them; they need us. At the 
same time, we absolutely have to hold China accountable to 
their WTO trade obligations. Fixing market access issues that 
remain on several sanitary and phytosanitary issues on 
agricultural products such as the use of ractopamine in pork 
and protecting against issues like intellectual property theft 
are all key.
    We must do what we can to ensure our own national security.
    We must ensure China is playing by the rules.
    We must also ensure that we aren't continuing to lose 
access to vital markets.
    In closing, I want to again thank you for the opportunity 
to testify today. Trade is a foundational issue that serves on 
the basis for our modern global economy. It is an issue that 
helps lift millions out of poverty, and it is an issue that 
helps U.S. farmers and ranchers feed billions of families 
around the globe. At this time of continued economic and 
geopolitical uncertainty, the United States must tell the world 
we are open for business.
    Thank you for your time today.
    [The statement of Mr. McHargue follows:]

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    Chairman SMITH of Nebraska. Thank you.
    Mr. Greer, you are recognized.

STATEMENT OF JAMIESON GREER, PARTNER, INTERNATIONAL TRADE, KING 
                          AND SPALDING

    Mr. GREER. Good morning, Chairman, Ranking Member, and 
members.
    As Ambassador Lighthizer's chief of staff, I had the 
opportunity to sit with him in many meetings with you in groups 
and individually and hear your nuanced and thoughtful views on 
trade. I am happy to be here today.
    I should note before beginning that I am appearing in my 
personal capacity, and that none of my comments today can be 
attributed to any current or former employer or client.
    This hearing is focused on how America can be successful in 
our competition with China in the face of its aggressive trade 
and investment policies.
    Although certain companies or discrete industries have 
found some success in relying on China in their supply chains 
or export business, Chinese unfair trading practices have 
sapped the competitiveness of U.S. companies and workers, 
resulting in hundreds of billions of dollars in annual trade 
deficits with China. Economic studies estimate that at--that 
the U.S. has lost at least 3.7 million manufacturing jobs, tens 
of thousands of factories, following China's accession to the 
World Trade Organization.
    WTO membership enabled China's meteoric rise, which has 
been fueled and funded by China's exports to and investment 
received from the United States. Thus, while our working 
classes have lost jobs and our supply chains have foundered, 
China's manufacturing base is incredibly robust, and its 
military position has strengthened. These trends have a direct 
impact on the global balances of power and international peace 
and security.
    China has a plan to be the economic leader of the world, 
and then to use that position to export its own model of 
governance globally, and so we can't lose sight of that as we 
talk about trade and economic relationship with China. You will 
see this idea referred to in Chinese Government discourse by 
the term ``the great rejuvenation of the Chinese nation.'' 
According to writings and speeches of Chinese officials, 
including Xi Jinping, the plan is to achieve overwhelming 
global hegemony by 2049. In describing this strategy, Xi 
Jinping has said that China is--and I quote--``building a 
socialism that is superior to capitalism, and laying the 
foundation for a future where we win the initiative, win the 
advantage, and win the future.''
    China's trade policies and practices are a key part of 
this. My written testimony goes into more detail, but they have 
a number of non-market practices that are harmful, including 
pursuing a strategy of dual circulation that prioritizes 
Chinese domestic production and discourages imports; massive 
subsidies to favored companies or industries regardless of 
their profitability, market demand, or natural comparative 
advantages; construction of excess capacity in key 
manufacturing industries; high, non-reciprocal tariffs on U.S. 
imports; non-tariff barriers on imports like pseudoscientific 
requirements and other regulatory obstacles; forced technology 
transfer, which we could talk about for days; discrimination 
against U.S. goods and services; opaque and discriminatory 
government procurement programs; periodic currency 
manipulation. The list goes on.
    As I noted, these practices have contributed to the 
hollowing out of our own manufacturing base. The question is, 
what do we do?
    While many policies can affect our economy, such as tax, 
monetary, industrial policy, energy policy, trade policy plays 
a key role as well. We can talk about negotiations and market 
access, which are important, but I want to focus a little bit 
on enforcement.
    In 2018, when I was at USTR, you will know that we started 
an investigation under Section 301 of forced technology 
transfer. After enforcing the results of that investigation, we 
ended up with substantial tariffs on Chinese imports, 
especially including those that benefited from forced 
technology transfer. And then we concluded with the Phase One 
agreement with China, where they allowed us to keep the tariffs 
in place, which gives us some room for leverage and 
enforcement, and importantly, where they also agree to 
substantive changes with respect to agricultural regulations, 
financial services, intellectual property. They made 
commitments.
    And the important thing as well about the agreement is that 
it had an enforcement mechanism, one that was established where 
on a monthly, quarterly, and semiannual basis, leaders in the 
United States and China could get together to resolve these 
issues and resolve them before they became conflagrations. I 
haven't seen that enforcement mechanism being used, and maybe 
things are going on behind the scenes, but I don't know. I 
think it would behoove the government to do an assessment of 
Chinese compliance--or non-compliance, as the case may be--with 
the Phase One trade agreement, and how to enforce it.
    There are a variety of other ways we can enforce. I would 
say we should consider either revoking permanent normal trade 
relations with China, or at least going back to a world where 
we look at where we were with the Jackson-Vanik amendment, an 
annual--on an annual basis, Congress and/or the President 
looking at whether China should continue to receive most 
favored nation status. And we should use sanctions on China 
where appropriate. We should continue to use export controls. 
We should use Section 301, Section 232, where appropriate. We 
should take actions in government procurement to ensure that we 
don't have products used in our contracts and programs from 
suspect Chinese companies.
    I do want to note diversification of trade, which we just 
heard from Mr. McHargue, it is very important. I think we 
should engage in sectoral negotiations with places like the 
Philippines and Kenya and the United Kingdom to make sure we 
can get market access. We need to be very careful to the extent 
there are any trade agreements, they should incorporate the 
great things you all agreed to in the USMCA on labor and 
environment and rules of origin.
    And I will yield back my time. Thank you.
    [The statement of Mr. Greer follows:]

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    Chairman SMITH of Nebraska. Thank you, Mr. Greer.
    Mr. Duesterberg, please proceed. You want to turn on your 
microphone.

    STATEMENT OF THOMAS DUESTERBERG, SENIOR FELLOW, HUDSON 
                           INSTITUTE

    Mr. DUESTERBERG. Chairman Smith, Ranking Member Blumenauer, 
and members of the subcommittee, thanks for having me today to 
comment on this important topic.
    I want to note first from the outset that China, under the 
leadership of Xi Jinping and the CCP, has pursued a policy of 
achieving economic independence and as much dominance in the 
world economy as possible. In a real sense they are pursuing a 
possible policy of decoupling using the tools of mercantilist 
policies which many of you have already noted.
    They also want to free their economy from dependence on the 
dollar, so that economic sanctions using the financial system 
cannot be used against them. The economic impact on U.S. 
manufacturing and increasingly on the financial and digital 
commerce sectors is well known.
    I want to emphasize in my work that the Chinese economy 
exhibits growing weaknesses under CCP leadership. The policies 
I will suggest to address the Chinese mercantilism are in part 
designed to take advantage of these weaknesses and undermine 
the ability of the Chinese leadership to achieve its economic 
and political goals.
    The IMF and the World Bank are both projecting much weaker 
growth in China, and I believe they under-estimate this 
weakness. My written testimony has some detail about why I 
think the Chinese economy is weak.
    Growth in China in the past has been driven by massive 
capital investment, growth in consumption, and aggressive 
exploitation of open global markets to create persistent trade 
surpluses. But in recent years investment returns have 
weakened, the housing bubble has burst, the government and 
banking balance sheets have been over-leveraged, and consumer 
spending constrained by the demographic decline and the need 
for precautionary savings to pay for education, health care, 
and old age.
    In these circumstances, China is even more dependent on 
access to Western finance and foreign markets for driving 
growth. Because of this dependency, the U.S. trade and 
investment policies such as those already in place can and 
should be reinforced to take advantage of these growing 
weaknesses and, hopefully, to induce change in Chinese 
mercantilist policies.
    The policies I want to emphasize first are in trade 
enforcement of WTO obligations and deployment of U.S. 
unilateral trade instruments. Mr. Greer and others have already 
commented on some of these. I agree that the Phase One 
agreement should be enforced, but also that many U.S.--because 
of the weaknesses of the WTO structure, we should continue to 
use unilateral tools available in the United States to pursue 
our goals.
    Finally, I want to emphasize that the U.S. should 
reemphasize the WTO concept of reciprocity. Chinese 
protectionist practices, such as its failure to provide access 
to Western digital platforms, payment systems, and social media 
while its firms enjoy access to Western markets should be 
fought back against by prohibiting online retailers such as 
Alibaba and Shein to be banned, and also social platforms like 
TikTok and WeChat.
    Finally, the United States should emphasize the creation 
and use of regional trade agreements. I think we need to be 
present on the playing field, including negotiating to rejoin 
the CPTPP.
    In terms of investment tools, the U.S. should consider more 
vigorous efforts to discourage or prohibit investments in 
Chinese firms where national security is endangered. We do need 
a reverse CFIUS process. We should cover research projects and 
venture capital investment as part of the reverse CFIUS 
process.
    We should also, in terms of financial policy, label 
Chinese--China as a currency manipulator. This action should 
undermine confidence in the renminbi as Beijing tries to 
attract more foreign investment and make it a bigger part of 
trade finance.
    Finally, the United States should address the growing debt 
crisis in the developing world, which is linked in important 
ways to China's Belt and Road initiative. Nearly half of 
foreign debt in the developing world is now in the form of 
Chinese loans, which are normally at market rates and not 
subject to Paris Club negotiations. According to the IMF, up to 
60 percent of the developing world countries show clear signs 
of financial distress. And at a minimum, the United States and 
allies should require China to participate in restructuring 
using Paris Club norms.
    Thank you, Mr. Chairman.
    [The statement of Mr. Duesterberg follows:]

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    Chairman SMITH of Nebraska. Thank you.
    Mr. Goodman, please proceed.

  STATEMENT OF MATTHEW P. GOODMAN, SENIOR VICE PRESIDENT FOR 
   ECONOMICS, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES

    Mr. GOODMAN. Thank you, Mr. Chairman, Mr. Ranking Member, 
distinguished members of the subcommittee.
    I was asked to talk about a recent CSIS report on China's 
economic coercion, and I will do that in a moment. But I would 
like to first make two broader points about trade, if I may.
    The first is the United States needs trade. Trade creates 
growth. It creates jobs. It creates export opportunities for 
U.S. businesses, farmers, ranchers. Trade lowers costs for not 
only individual consumers, but for downstream producers that 
can then invest in more jobs. So, yes, trade does dislocate 
some jobs, and we need a more robust set of domestic policies, 
real adjustment assistance, worker retraining, incentives for 
investment, and new jobs to deal with that dislocation. But we 
should still trade.
    We also need trade agreements to amplify the growth, jobs, 
and cost reduction benefits of trade itself, but also for 
strategic reasons, which leads to my second point. Frankly, we 
are losing ground in the critical Indo-Pacific region, which is 
what I mainly focus on, both economically and strategically, 
because we are not willing to negotiate formal trade 
agreements.
    When I say losing ground, I mean not only to China, but 
also we are losing the confidence of our own allies and 
partners in the region. I hear this all the time. Yes, we have 
offered the Indo-Pacific Economic Framework or IPEF, which has 
some value, but our partners are skeptical about what's in it 
for them, and they want us back in formal trade negotiations.
    China is doing trade agreements. It has even applied to 
join the successor to the Trans-Pacific Partnership, which we 
created. Almost everyone else in the region is doing trade 
agreements. The United States is standing on the sidelines 
while new rules are being set and markets are being divvied up 
by others. We need to get back in the game.
    Another reason to do trade agreements, and the one I was 
asked to speak about today in particular, is to counter China's 
economic coercion. In our recent report we looked at eight case 
studies over the past decade-plus from Japan rare earths in 
2010 to Lithuania today. And we concluded that China is a 
serial coercer, using its growing market power to take swipes 
at our allies and partners for perceived slights to Beijing's 
interests.
    Although China's coercion often fails in its tactical aims, 
and can be counterproductive to Beijing's own strategic 
interests, pushing countries away from China and toward us, 
China's behavior is disruptive and divisive, and we need to do 
more to deter Beijing from doing it.
    There are two basic ways to deter someone from doing 
something. One is to make them fear punishment, and the other 
is to make them fear failure. Tit for tat retaliation is 
tempting, but it has three big problems.
    First, if it is proportional to China's typically low-level 
coercion, it isn't likely to change Chinese behavior.
    But if we escalate, we lose credibility. How much of a cost 
are we realistically willing to pay to defend other countries' 
bananas or wine?
    And finally, we found in our study that most of our trading 
partners don't want us to retaliate, since the bullying of them 
is likely to resume as soon as we leave the playground.
    In the end, we were drawn to a counter strategy of 
resilience and relief, helping partners find new markets, which 
makes them less exposed to China, and offering them relief if 
they do get coerced. Trade policy plays a role in both 
resilience and relief. By negotiating trade agreements, we 
expand partners' options and make them less fearful of losing 
China's market. By offering trade relief we help offset the 
costs of coercion and persuade our allies that we have their 
back.
    Combined with a number of other recommended policy 
responses in our report, we believe these resilience and relief 
measures will help persuade Beijing over time that its coercion 
won't succeed.
    So to sum up my main three points: first, the United States 
needs trade to promote our economic interests; second, we need 
trade agreements to promote our economic and strategic 
interests, including countering China's coercion; and third, we 
need to get back in the business of negotiating trade 
agreements in the critical Indo-Pacific region.
    Thank you for your attention. I am happy to take your 
questions.
    [The statement of Mr. Goodman follows:]

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    Chairman SMITH of Nebraska. Thank you.
    Mr. Houseman, you are recognized.

    STATEMENT OF ROY HOUSEMAN, LEGISLATIVE DIRECTOR, UNITED 
                          STEELWORKERS

    Mr. HOUSEMAN. Chairman Smith, Ranking Member Blumenauer, 
thank you for the opportunity to testify today.
    The United Steelworkers, or USW, is the largest 
manufacturing union in North America, and our members mine and 
make everything from aluminum to zinc. Our union has 
highlighted for over 20 years concerns for U.S. workers, our 
local communities, and the weakening of our country's 
resilience caused by unfettered trade between the U.S. and the 
People's Republic of China, or PRC.
    Countering the PRC's trade and investment agenda starts by 
ensuring the American labor movement is at the table in a 
tripartite collaboration with business and government. Working 
together we need to ensure our democratic ideals move across 
the globe as much as goods on ships and planes.
    The challenge cannot be under-estimated, and we cannot 
compete against--compete using classic free trade tools 
developed in the 1970s with the naive hope that unfettered 
trade would push back authoritarian governments. Russia's 
invasion of the Ukraine and China's exports to Russia 
increasing by double digits last year expose the limits of 
outdated trade models.
    Focusing on three broad categories, the union encourages 
Congress to modernize trade agreement rules; update our trade 
tools to better account for China's outward expansion; and at 
every step of the way ensure workers across the globe have 
democratic rights to freedom of association and independent 
labor unions.
    Outgoing and recent trade--ongoing and recent trade 
initiatives provide building blocks for Congress to radically 
rework trade in a pro-worker manner. By focusing less on the 
immediate profits and more on building resilient communities, 
we must ensure goods and services across the globe are traded 
fairly.
    My written testimony goes into detail, but future trade 
initiatives will need to include items like the USMCA--added in 
USMCA like the labor value content provisions and the rapid 
response mechanism.
    Future agreements should also ensure American global 
financing initiatives support U.S. procurement over those goods 
from the PRC.
    Other initiatives, like the Indo-Pacific Economic 
Framework, or IPEF, have significant potential to modernize and 
facilitate trade without having to change domestic tariff 
lines. The union sees the potential of the framework, but urges 
Congress to monitor negotiations to ensure we are defending 
U.S. workers, and not inadvertently exploiting foreign 
communities.
    Another initiative Congress should also approach with an 
open mind is the steel and aluminum global arrangement. This 
negotiation between the EU and the U.S. has real potential to 
limit sales--limit state-fueled, non-market, and carbon-
intensive steel and aluminum production from entering our 
market.
    Countering the PRC's trade and investment strategy will 
also require retooling our trade enforcement regime to address 
China's third-country subsidies, commonly known as the Belt and 
Road Initiative. This includes passing legislation like the 
Leveling the Playing Field Act 2.0, introduced last Congress by 
Representative Sewell and Bill Johnson. It also means closely 
looking at the GSP program to ensure that we are not letting 
content from the PRC seep through GSP beneficiary countries.
    This committee should also focus on how to defend against 
market concentration of commodities by the PRC. When nearly 100 
million tons of PRC-funded steel projects, the equivalent of 
one year's U.S. production, are going into Southeast Asia using 
carbon intensive technology, and a new state-owned PRC entity 
will centralize iron ore buying to push down prices, we need to 
prepare tools to defend our country's modern steel industry 
against the PRC's market concentration.
    Finally, I have in my hands here a TA petition from 
Waynesville workers in North Carolina. The state filed this 
petition for over 1,000 workers because of Chinese and other 
country imports idling their mill. Last Congress appropriated 
money for the TA program in a simple reauthorization, but this 
committee--but a simple reauthorization by this committee would 
mean this petition and for--and others for over 24,000 workers 
could be heard so that they can get job retraining benefits in 
their time of need. If we want to compete against China, it 
makes sense for us to provide robust job training benefits to 
workers negatively impacted by Chinese trade.
    In conclusion, the largest difference between the U.S. and 
the PRC trade and investment agenda are the values we put 
behind our country's trade and expansion efforts. Ensuring our 
trade initiatives do not exploit workers globally and ensuring 
U.S. workers benefit from our country's trade initiatives must 
be at the forefront of policymakers' decisions. President 
Reagan recognized this in 1981 when workers in Poland rose up 
and fought to have their rights for an independent trade union.
    Congress should begin to defend American workers through 
aproactive, pro-worker trade agenda built on fostering exports 
and deflecting China's market concentration in a host of goods 
being dumped on our shores.
    Thank you for your time, and I look forward to answering 
any questions you may have.
    [The statement of Mr. Houseman follows:]

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    Chairman SMITH of Nebraska. Thank you. Thanks again to all 
of our panelists. Now we will move into the question-and-answer 
session, and I will begin with that. And again, I can't thank 
you enough for sharing your expertise.
    Mr. McHargue, obviously you represent a great state, a 
vibrant agriculture sector. Incidentally, you live in the 
largest ag district in America, and I am grateful for your 
engagement.
    You spoke about the need to diversify our exports, and 
identifying markets, and market access, and so that we don't 
become too reliant on any single trading partner. And I 
certainly agree. And we must increase market access in the 
Indo-Pacific Region, specifically. I do worry that the 
Administration just sees things much differently than that, 
unfortunately.
    But could you highlight some examples of markets in the 
Indo-Pacific Region that would be great opportunities for 
growth in ag exports?
    And do you believe that the Indo-Pacific Economic 
Framework, IPEF, will do enough to level the playing field for 
producers themselves?
    Mr. McHARGUE. Well, I think when we look at the Indo-
Pacific Region, I think there is tremendous opportunity, quite 
frankly. And when we have these conversations about just 
agreeing to talk about trade, I think that just really falls 
short versus actually looking at true trade agreements.
    You know, when we--when I visit with my farming neighbors, 
and we are at the coffee shop or we are having conversations 
about trade, many of them don't really understand the dynamics 
of trade and how it all works. They just know that when they 
hear on the radio that, for instance, China is in the market 
and they are purchasing grain, they know that the market goes 
up.
    They also know that if there is a down day, a lot of times 
you will listen to the commentaries and there will be something 
related to one of our large trading partners deciding not to 
purchase product.
    So when you think about the Indo-Pacific, you think about 
the population base, you think about the potential growth 
there. We need countries like that as well to, when they talk 
about doing a purchase of ag products, they move the market as 
well.
    So when you think about the concept of possibly decoupling 
from China, within the agriculture sector the only way that 
that really works for me--when you think about our trade with 
China is $55,000 per farmer or rancher--what are we going to 
replace that with?
    And I think we need to do it with regions like the Indo-
Pacific, but you think about also Africa, Kenya. We need these 
countries that are actually purchasing raw commodity products.
    So on our farm we sell commodities. We don't actually sell 
a processed food. So when we sell $1 million of raw 
commodities, that has a huge impact that is directly related to 
my farm. When we say $1 million of processed food, 10 percent 
of that may be going to the ag sector. So it is really 
important whoever we trade with, that--in the agriculture 
sector--that we talk about raw commodities. That is very 
different than some of these other trading types of products.
    Chairman SMITH of Nebraska. Okay, thank you.
    My next question, Mr. Greer, I appreciate you sharing your 
perspective, a unique and helpful perspective.
    The Trump Administration rightly highlighted China's IP 
theft and forced technology transfer policies. China is also 
aggressively seeking to dominate global medical supply chains, 
as we know. In the face of this, it is deeply concerning that 
the Biden Administration has completely undermined, in my 
opinion, the American innovation through the TRIPS waiver.
    It seems the Administration is content to see the medical 
supply chains shift abroad because of this. And so, given your 
perspective, how would you say the TRIPS waiver impacts our 
credibility when it comes to protecting our innovative edge?
    And could you speak to China's ambitions in the greater 
medical sector?
    Mr. GREER. Certainly, Mr. Smith. I will start with your 
last part.
    China's ambitions, whether it is medical devices, or 
pharmaceuticals, or biologics, or other life sciences, this is 
an area where they want to take over the global economy. They 
want to corner the market on this, not just in the manufacture, 
but also in the innovation of these products. And intellectual 
property is key to this.
    When I hear about a waiver of intellectual property 
protections, to me that sounds like the reverse of enforcement. 
Obviously, we are very sympathetic to the COVID-19 pandemic. 
And for that reason, the TRIPS agreement actually has an 
article built into it to allow for compulsory licensing in the 
event of such a pandemic, and something that should and could 
be used in these kinds of situations.
    So I think that we want to be worried about enforcing rules 
using existing flexibilities, rather than trying to get rid of 
enforcement or weaken rules that in the end could actually 
benefit China.
    Chairman SMITH of Nebraska. Thank you.
    Mr. Duesterberg, you have extensively researched China's 
ambitions on the continent of Africa and its efforts to 
dominate global critical mineral production. Can you discuss 
how trade tools, including trade preference programs like AGOA 
and GSP, can support our efforts to counter China's influence 
in the region and across key supply chains?
    Mr. DUESTERBERG. Thank you for that question, Mr. Chairman.
    I think the AGOA bill could be potentially used somewhat 
for, you know, lowering tariffs on imported products. But 
really, the fundamental problem with China and Africa is that 
they have rather skillfully come to control basic mineral 
production, from mining through processing, through creation of 
final products.
    Chairman SMITH of Nebraska. What would be your 
recommendation moving forward, then, on that?
    Mr. DUESTERBERG. Well, my recommendation moving forward 
would be to use USAID, in conjunction with partners in like-
minded countries to encourage and help finance U.S. and allied 
investments in basic production in Africa.
    Now, the G7 last year adopted something. It is called the, 
I think, the Build Back Better World Program, which was 
designed to coordinate efforts of the G7 in areas like this. To 
my knowledge, there hasn't been much follow-through. The 
Japanese have the chairmanship of the G7 this year, and I think 
they are meeting next month. That might be a opportunity to 
reinforce the need for this.
    But the fundamental need is really for our companies to get 
some assistance to be on the playing field, so to speak, in 
producing the raw minerals themselves.
    Chairman SMITH of Nebraska. Okay, and thank you.
    I now recognize Ranking Member Mr. Blumenauer for your 
questions.
    Mr. BLUMENAUER. Thank you very much, Mr. Chairman, and I 
appreciate the testimony.
    Mr. McHargue, your notion that we are looking at a complex 
set of inter-relationships, I think, is well taken. And the 
distinction between commodities and processed food, in terms of 
the value added for Americans, I think, is very important.
    Mr. Greer, at some point I would look forward to being able 
to entertain your ideas for more aggressive enforcement. You 
indicated you had a number of them. I assume your extensive 
work with our friend, Mr. Lighthizer, gives you a sense of 
going forward on that. And it just, I must say, just continues 
to drive me crazy.
    I was one of those people that took the Chinese 
representations at face value, voted to get them into the WTO. 
Watching now, 20 years later, they are doing this dual track, 
playing the developing country when it suits their purposes. It 
is maddening. And I am hopeful that our committee can focus on 
things that will make a difference to be able to hold them 
accountable and avoid this dual standard.
    One of the things that I am interested in are some specific 
things we can do to undercut Chinese exploiting opportunities 
to take advantage of us. I have referenced and have put forward 
legislation on the de minimis loophole, where they are now 
importing directly over two million packages a day that escape 
any meaningful detection. No sense of defective products.
    I am wondering, Mr. Houseman. Do you want to just elaborate 
for a moment from your perspective about the extent to which it 
would be important to close the de minimis loophole for the 
Chinese?
    Mr. HOUSEMAN. Yes, Ranking Member Blumenauer. You know, 
this idea of an $800 de minimis, it allows for a significant 
amount of direct consumer shipments of goods from, you know, 
everything--you know, the most common that everyone knows is 
Shein, this clothing company, right? And this idea that, you 
know, China, for example, has a $10 de minimis--we aren't even 
able to compete on the same level from here in America on a de 
minimis level between the two countries.
    And then you add into the fact that, you know, a lot of the 
clothing items that Shein is producing has the potential of 
cotton from the Xinjiang region, where forced labor practices 
and, as has been highlighted by the State Department, is the 
potential for genocide. I think that we need to really re-
address the--this issue of an $800 de minimis with China, 
particularly.
    Mr. BLUMENAUER. To say nothing about exploding bicycle 
batteries. There are some creative invoicing by these Chinese 
sources that will get the sum of money below $800.
    Mr. HOUSEMAN. Yes.
    Mr. BLUMENAUER. And this is an area, Mr. Chairman, I hope 
we can pursue.
    But Mr. Houseman, taking advantage of the fact that you are 
representing employees who workers who are in the steel and 
aluminum industry. I wondered if you could just talk for a 
moment about the global arrangement for steel and aluminum, and 
a path forward to be able to deal more meaningfully with this 
wildly disparate over-production capacity that the Chinese have 
generated, and remedies that you would support.
    Mr. HOUSEMAN. Yes, thank you, Chairman. And this is--you 
know, look. Global steel-making capacity has increased for the 
fourth year in a row, while utilization has shrunk globally, 
okay, which means that our plant--our plants aren't operating 
as efficiently as they can. And in large part, this is because 
of China's fueling of the global steel industry.
    As I mentioned in my testimony, 100 million tons of new 
capacity is coming online in the Southeast Asian region, and it 
is primarily of a technology that is going to increase the 
carbon intensity by three times than its current levels in that 
region for steel-making.
    Now, when you add in this idea between the EU and the U.S., 
who are the two largest import share markets coming in--you 
know, for steel commodities coming into the market, the U.S. 
has dealt with, like, a 20 to 30 percent import penetration for 
quite a while, over a decade. This idea that we could actually 
set up a club to allow us to push back on non-market and 
carbon-intensive steel-making products will allow our workers, 
who have--and our companies, which have modernized, are playing 
by the rules, and recognizing that we need to reduce carbon 
emissions, but also push out state-powered and fueled steel 
production.
    Mr. BLUMENAUER. Thank you very much.
    Thank you very much, Mr. Chairman. I appreciate this.
    Chairman SMITH of Nebraska. Thank you.
    Mr. Buchanan, you are recognized for five minutes.
    Mr. BUCHANAN. Thank you, Mr. Chairman, and I want to thank 
all our witnesses.
    And Mr. Greer, I got to tell you I really miss Ambassador 
Lighthizer. We are active, we are engaged on this committee, 
and there hasn't been much active or very engaged. If there is, 
nobody knows about it, from my standpoint.
    Of course, we passed USMCA, so we know we are capable. I 
thought we would be lucky to get the 218 votes, and I think we 
got 380, a very bipartisan measure. But we had a lot of 
momentum. I know I did a trip with Chairman Paul Ryan at the 
time of this committee to Asia with other members, and there 
was--most of the countries that we met there wanted us to be 
active and engaged, to be a counterpunch to China. But 
obviously, we haven't done much in terms of that, either.
    I guess--what is your thoughts as you sit back and you take 
a look at where we were, where we are today?
    What is the difference in the Administration, just from 
your expertise, from where you were sitting?
    I know leadership matters and that is big, but beside that.
    Mr. GREER. Sure. Well, I will say we are in a position 
where I think the Administration has embraced certain aspects 
of the Trump Administration's trade policy. The Section 301 
tariffs are in place. There seems to be a rhetorical, at least, 
agreement on the challenge with China. There has been, you 
know, good movement, I think, on export controls and other 
things.
    Now, at the same time, we know that in order for--in order 
to have a pragmatic and robust trade policy, we have to balance 
a variety of stakeholders, right? We have our agricultural 
folks that we have heard are very dependent on export markets, 
not just China, all kinds of them. And then we have folks like 
the steelworkers who have been really severely harmed by trade 
agreements in the past. And so we have to balance these----
    Mr. BUCHANAN. Mr. Greer, let me--I got one other question I 
wanted to ask you real quick.
    According to the FBI estimates, China steals between 300 
and 600 billion in intellectual properties, IP, from the U.S. 
every year. That is a staggering sum of money, and China steals 
it from us each and every year. Just last month New York Times 
published a very lengthy article which reported how skillfully 
and savvy the Communist Chinese Party is--has become in its 
effort to steal our IP.
    I was there 20 years ago in Beijing with a business group, 
and it was one of the biggest issues 20 years ago, and we 
haven't made a hell of a lot of progress, it seems to me, in 
the last 20 years. What can we do to minimize that? Because 
that creates our--it takes a lot of money away from our 
companies, and we lose a lot of jobs as a result of it. And it 
is a very, very continuous big issue. What is your thoughts?
    Mr. GREER. There are a couple of things we can do. First, 
we have a Phase One agreement in place where the Chinese have 
not only agreed not to do these things, which they have agreed 
many times before, but they have said we can enforce with that, 
and that doesn't necessarily have to be tariffs. Section 301 
also allows fees on services, other restrictions on services. 
There are a variety of things you can do.
    The second thing is I think U.S. companies sometimes are 
hesitant to share this kind of information. There needs to be 
some kind of either requirement or ability for confidential 
reporting, where they--they have to come forward to the U.S. 
Government, but on a confidential basis so we can get a better 
sense of the problem and how to deal with it directly.
    Mr. BUCHANAN. Mr. Goodman, let me ask you. Like a lot of 
us, a competitor--I hate to see--I am all for free trade, but I 
want it to be fair. And to me, we get played by the Chinese in 
a very big way. I think we export--the number I have got is 200 
billion. They import 563 billion, a $400 billion deficit 
difference. What is it--what more--what--how do we get this--
level the playing field a little bit more, in your opinion? 
Because I think it is disastrous and outrageous.
    You know, at the end of the day it needs to be somewhat in 
the ballpark, and this is clearly, for a lot of years, 20 
years, hasn't been in the ballpark. If they are not buying one 
thing, they need to be working with our farmers and ranchers 
and everybody else. So there should be some sense of fairness, 
and I don't see that, and I haven't seen it for 20 years. What 
is your idea?
    Mr. GOODMAN. Yes, thank you, Mr. Congressman. We certainly 
have a lot of work to do to make the Chinese market more open, 
more rules-based. And I think we should--need to continue to do 
that work to push them towards the direction that they were in 
20 years ago when we bought this--bet on bringing them into the 
WTO of reform and opening. And we need to hold them to that 
approach.
    I also think, you know, embedded in your question is our 
large dependence and other partners of China, trading 
partners--a huge dependence on China for just a wide range of--
pretty much everything we are looking at has a China nexus. And 
I think part of what we are all talking about and looking at 
now is a way to reduce that excessive dependence while 
continuing to have, you know, fair and balanced trade with 
China.
    Mr. BUCHANAN. Thank you, and I yield back.
    Chairman SMITH of Nebraska. Thank you.
    And pursuant to committee practice, we will proceed with 
two-to-one questioning, so we will begin that with Mr. LaHood 
and proceed to the other side after that.
    Mr. LaHOOD. Thank you, Mr. Chairman.
    I want to thank all of our witnesses today for your 
valuable testimony here today.
    A robust trade policy is incredibly important to me and my 
constituents. As I think about my district, it is heavy 
agriculture and manufacturing, whose jobs and economic success 
rely on opportunities to send our great American products all 
over the world. However, when countries don't play by the same 
rules and standards as everyone else, this causes problems.
    Non-market countries like China, who engage in malign and 
predatory trade and economic practices, must be held 
accountable. China plays the long game through coercive trade 
and economic agreements, pressuring countries around the world 
to cede to their terms for investment.
    I also serve on the Intelligence Committee and the new 
Select Committee on China. And I learn every day about the 
growing threats from China. And I believe the Biden 
Administration is missing key opportunities to push back 
against and hold China accountable for their trade practices. 
The United States should be investing in substantive trade 
policy with partners and allies in the Indo-Pacific Region to 
strengthen global trade policy and make it harder for China to 
manipulate the system.
    Mr. Duesterberg, I think we can all agree that China has 
outsized economic ambitions, but they manipulate the global 
economic system and multilateral institutions to get their way. 
It has been over 20 years since we allowed China into the WTO. 
In retrospect, was that a mistake? Why or why not?
    Mr. DUESTERBERG. Well, I was one of the few on my side of 
the aisle to argue against letting them in in the first place. 
So I think it was a mistake.
    So what do we do now? I can agree with Mr. Jamieson about 
possibly considering going to an annual renewal of MFN status, 
but I think it also is incumbent on us to think about 
alternative structures that exclude China.
    China is a mercantilist nation. We have lots of friends. I 
wish we had more friends, more staunch friends for instance in 
Europe, who agree with us on things. But I do think that we 
should try to erect other trade agreements, and I have argued 
for regional agreements. We could expand NAFTA. I do still 
think that we should join the CPTPP. Mr. Jamieson mentioned 
sectoral agreements.
    We need to have alternative structures that exclude China, 
because China is not a faithful enforcer of its own agreements.
    Mr. LaHOOD. Thank you.
    Mr. Goodman, I and many of my colleagues have expressed our 
concerns about IPEF--and you mentioned that--as an insufficient 
tool to counter China's influence in the Indo-Pacific Region, 
particularly because it has no enforcement mechanisms, in my 
view, non-market access.
    How would you assess the regional--from a regional 
perspective, IPEF as a counter or an alternative to CPTPP?
    Mr. GOODMAN. Thank you, Mr. Congressman. And I agree with 
you.
    I think one of the problems with IPEF is that it does not 
have--it is not a formal trade agreement that is going to have 
an enforcement mechanism. And I have seen many of these 
executive agreements over the years that can do useful things, 
but they tend to get put in a drawer and then not followed up 
on. And so there is no substitute for having an agreement that 
is approved by Congress and then has built in enforcement 
mechanisms. So I think that is one of the reasons that we ought 
to be looking at things like CPTPP or some other arrangement 
that is more like a traditional formal trade agreement.
    Can I just--in the answer on the other question I should 
have added IP and subsidies, huge issues in China, and we ought 
to be taking those on, including working with allies, as 
Representative--Ambassador Lighthizer was doing with this 
trilateral with Japan and Europe. That kind of effort is really 
important in getting China to address some of these practices 
that we are all troubled by.
    Mr. LaHOOD. Thank you.
    Mr. Greer, the question that I asked Mr. Duesterberg about 
whether it was a mistake 20 years ago to allow China into the 
WTO, do you have an answer on that, yes or no, and any other 
comments?
    Mr. GREER. The answer is yes. And I think we have seen--we 
have data now, right? We have data. We can--at the time, like 
Mr. Duesterberg said, a lot of people said it was not a great 
idea, but went forward anyway. But now we have 20, 23 years of 
data, and we can see the jobs that were lost. We can see the 
factories that were lost.
    And this isn't just fluff, right? There are economic 
studies from a variety of esteemed economists who have made 
this connection very clearly. So there is no question that it 
was a mistake, and it would be a mistake going forward to 
continue to think that we can somehow get them to change, 
absent some kind of strong enforcement.
    Mr. LaHOOD. Thank you.
    I yield back.
    Chairman SMITH of Nebraska. Thank you.
    Mr. Higgins from New York.
    Mr. HIGGINS. Thank you, Mr. Chairman.
    You know, I think most agree that what oil was to the 20th 
century electrification will be to the 21st century in terms of 
global dominance relative to the world economy.
    China is 20 percent of the world's population. It is a $17 
trillion economy. It is 19 percent of the world's economy. The 
United States is five percent of the world's population. It is 
a $25 trillion economy, which is 24 percent of the world's 
economy.
    In this new era of global economic superiority, you are 
either the country that controls the supply chain or you are 
the country that is controlled by the country that controls the 
supply chain.
    And the title of this hearing is ``Countering China's Trade 
and Investment Agenda: Opportunities for American Leadership.'' 
You know, China cheats on their currency. They steal our 
intellectual property. They treat their people poorly, and they 
treat their environment poorly. We do have to be tougher on 
China, but the United States has to be tougher on ourselves 
about China.
    What do I mean by that? China was investing $1 trillion in 
infrastructure in Africa 15 years ago not to help the people of 
Africa, but to exploit Africa, to position itself to become a 
superior economic force.
    China mines or refines 68 percent of the world's nickel. 
China mines or refined 73 percent of the world's cobalt. China 
mines or refines 40 percent of the world's copper, and China 
mines and refines 59 percent of the lithium, which is also 
called white gold in the 21st century because of the emphasis 
on electrification. There are 200 mega-battery manufacturing 
plants that are either online or will be completed by 2030 for 
electric vehicles: 11 are in North America; 21 are in Europe; 
and 148 are in China. China has 80 percent of the global 
lithium-ion manufacturing capacity.
    Not only are we being outpaced, we are getting clobbered. 
And unless and until Democrats and Republicans within the 
American Government make a decision to gain access to these raw 
materials, we can never catch up. And we will always, in the 
21st century, be controlled by the country that controls the 
world supply chains.
    So, Mr. Duesterberg, you had made reference to this 
relative to rare earth materials and minerals. Your thoughts on 
this?
    Mr. DUESTERBERG. Well, it is not as if we don't have 
natural resources in the United States and in our countries 
that are very friendly to us, Canada and Australia especially.
    The mistake we have made--I mean, China has been very 
aggressive about capturing these various resources.
    Mr. HIGGINS. Yes.
    Mr. DUESTERBERG. They put a huge amount of capital 
investment into this, not only in Africa but in Latin America, 
and they are actually buying lithium mines in Canada these 
days. We have been somewhat asleep at the switch, and allowed 
the subsidized Chinese industry to take over these industries.
    We can and should start to exploit the resources that we 
and our allies in friendly countries have. We have started this 
in rare earths. We have a new mine, the old Mountain Pass Mine 
is up and running. We are working with Australia.
    Mr. HIGGINS. Yes.
    Mr. DUESTERBERG. We could do this on uranium, if we are 
ever going to reinvigorate the nuclear----
    Mr. HIGGINS. Yes, my time is almost up. I am sorry to 
interrupt but let me just say this to you. There are 17 mines 
in Africa that mined rare earth minerals and metals. Fifteen of 
the seventeen in South Africa, Congo, Mozambique are either 
owned or controlled by China, seventeen of fifteen.
    Now, there are mines throughout the world. I understand 
that. But at least we have to acknowledge that we are 
considerably behind. You can't just flip a switch and be ready 
to compete with what another country has done with its 
resources, regardless of how they have accumulated those 
resources 15 years ago. Because what Africa is rich with is 
precious metals and minerals. And they are way ahead of us. And 
I am just simply underscoring the need for America to be more 
aggressive in their competition.
    Thank you, sir.
    Chairman SMITH of Nebraska. Thank you.
    Mr. Arrington from Texas.
    Mr. ARRINGTON. Thank you, Mr. Chairman, witnesses. I want 
to follow on some of the comments and thought process from Mr. 
Higgins, my friend, with respect to China, and this very 
interesting--I have a hard time describing, quite frankly, the 
relationship we have with them. I come from one of the world's 
largest agricultural production centers, oil and gas--energy in 
general. I know how big and seductive their market is, but I 
have just got a few questions to sort this out in my head. I 
just seem to always be perplexed by this conundrum.
    Mr. Goodman, is China one of the worst human rights 
violators in the world community?
    Mr. GOODMAN. China's human rights are atrocious.
    Mr. ARRINGTON. Atrocious. Do--does China steal our 
intellectual property, as has been reported, force some of 
these transfer agreements, et cetera? Do they steal our 
intellectual property?
    Mr. GOODMAN. Yes, that has been a central part of their 
development strategy.
    Mr. ARRINGTON. Do they spy on Americans?
    Mr. GOODMAN. Yes.
    Mr. ARRINGTON. Do they align with other malign actors, 
other countries that don't share our values and would probably 
be considered adversaries of the United States and our allies 
around the world?
    Mr. GOODMAN. Yes.
    Mr. ARRINGTON. Do you think China is our greatest 
adversarial threat?
    Mr. GOODMAN. I think there is no question it is our biggest 
competitor and challenger, and in some cases an adversary that 
we could become enmeshed in serious problems with. And so it is 
our--yes, it is the--a generational challenge.
    Mr. ARRINGTON. Are they a partner?
    Mr. GOODMAN. Not right now, but we do depend on them. The 
reality is we depend on their market.
    We depend on their inputs for--as I mentioned, everything 
we are looking at has some China nexus, and we do need to talk 
to them in part to avoid any miscalculation, misunderstanding, 
but also to talk about issues that affect everybody: pandemics, 
environmental challenges, terrorism, proliferation. There are 
many issues that we need to talk to them about.
    Mr. ARRINGTON. It seems to be quite a precarious situation 
to answer the first set of questions in the way I would have 
answered them as well, and I suspect most of the panel would 
have answered. And then, when asked about their partnership, 
the response was, well, we need them.
    I would say maybe the greatest challenge for--one of the 
greatest challenges for our country, not just this committee, 
is to need China less until China changes its behavior, if that 
is possible. We thought it would be possible when we welcomed 
them to the World Trade Organization table.
    Mr. Greer, I was very impressed with Mr. Lighthizer and you 
and your team. I believe my Democrat colleagues are every bit 
as interested in continuing the good work we did with USMCA and 
having this free trade framework that we can then take 
throughout the world. We need to enforce it, and we need to 
replicate it, especially in the Indo-Pacific area, as has been 
discussed.
    But it seems like the missing piece is having a president 
that is very assertive and has made this issue of trade a 
priority. When it comes to negotiating with China, I think we 
were all pretty stunned that we were able to get to these 
purchase agreements and these structural reforms like Phase 
One. What is the psychology of negotiating with China?
    Just for the benefit of this committee, if the President 
were listening, how do we approach China to best undo some of 
the things we need to undo in terms of supply chain dependence, 
and then forge forward with enforcing some of the agreements we 
have, and then beyond?
    And then I yield back after your response.
    Mr. GREER. We have a saying in the United States where good 
fences make good neighbors. And I don't know if we will ever be 
good neighbors with China, but we found that they really 
respected strong action and not as much hot rhetoric, right? I 
mean, I think sometimes we get those reversed. I think 
sometimes we pound our fist and decry things that deserve to be 
decried, but then we don't take action.
    I think, actually, the reverse works a lot better with the 
Chinese is to be polite, be respectful, talk to them, consult 
with them, and take really strong action. They did not think 
that we were going to impose tariffs on them. And then we did. 
And then they didn't think we were going to do it again. And 
then we did. And then they came to the table.
    Chairman SMITH of Nebraska. Thank you.
    Mr. Estes.
    Mr. ESTES. Well, thank you, Mr. Chairman, for hosting this 
hearing. And thank you to our witnesses for joining us today.
    You know, when it comes to China there is a lot of 
bipartisan support for holding the Chinese Communist Party 
accountable and tackling their sinister advancement into other 
nations around the globe. So as this committee discusses ways 
in which we can compete with the CCP, being competitive in our 
own tax code is one way to ensure the United States is 
positioned as a global leader and pushes back on our 
adversaries. This is especially true when it comes to research 
and development.
    According to the R&D coalition, the U.S. share of global 
R&D investments in 2019 was 30 percent, down from 33 percent in 
2009 and 40 percent in 1999. Unlike the United States, China's 
global share of R&D investment has gone up. It was 24 percent 
in 2019, a big jump from 5 percent in 2000, and 15 percent in 
2009. That means Chinese--China's R&D investments have 
increased by 400 percent in just 2 decades.
    And what did this--and what did they do to incentivize R&D? 
China has implemented a deduction of up to 200 percent on 
eligible R&D investments. And without actions to undo the U.S. 
research and development amortization tax provision that kicked 
in last year, China will go from having two-and-a-half times 
more favorable tax benefits for research and development to as 
high as 20 times more favorable than the United States.
    Research and development is critical for our competitive--
yet without the right incentives, the United States is ceding 
research and development and, in turn, jobs to the Chinese 
Communist Party. But today, on Tax Day, my colleagues and I are 
introducing much-needed legislation to fix the R&D tax code 
that, when passed, will provide greater economic opportunities 
and reduce our dependence on foreign adversaries.
    The American Innovation and R&D Competitiveness Act allows 
for immediate expensing of eligible R&D costs, bringing us back 
to where we were just two years ago, and securing our dominance 
in research and development. The legislation is a bipartisan 
solution that I have introduced with my Ways and Means 
colleague, Congressman John Larson of Connecticut, as well as 
several Republicans and Democrat colleagues on the Trade 
Subcommittee today.
    Mr. Duesterberg, do you agree that having China continue 
advanced research and development while the United States slows 
R&D harms our economy and American workers?
    And is there a correlation between where R&D occurs and 
where jobs and manufacturing follows?
    Mr. DUESTERBERG. Well, Congressman, I do agree with the 
sentiment, and I agree with the need for your bill. I agree 
that R&D does produce results in terms of manufacturing and 
jobs, especially.
    But I would just caution people to not over-estimate the 
efficiency of Chinese research and development and their 
scientific research. I think we are much better at that than 
they are.
    I would also note that it would be useful, I think, to 
continue the trend towards more support for basic research and 
development. Most Chinese research is in the area of 
development. We are still world leaders, and the benefits that 
we received in the--for instance, in the 1950s and the 1960s, 
when we were by and--far and away the world leader in basic 
research, you know, paid rich dividends in terms of 
manufacturing things like semiconductors, aerospace technology 
for many years to come. So I would also emphasize, in addition 
to the R&D tax credit, the need to continue robust support for 
basic research in the United States.
    Mr. ESTES. And yes, there is always that trade-off between 
basic research and applied research and application.
    So, you know, in addition to talking about research and 
development, we know China has been stealing American 
innovation and technology. And now the Biden Administration is 
working to give away our vaccine innovation through the WTO 
TRIPS waivers.
    Mr. Greer, you mentioned earlier, talking about our 
intellectual property--what are some more concerns, or do you 
have anything else to add to--and particularly your assessment 
of the Biden Administration's stance on waivers and support for 
U.S. intellectual property?
    Mr. GREER. Certainly, Congressman. With respect to 
intellectual property, generally, you will recall that 
intellectual property was actually at the heart of the Section 
301 investigation that gave rise to the current tariff regime 
on China. So that was something where everyone agreed that this 
was a problem, and we should deal with it.
    With respect to now, with the proposed waiver, which I 
mentioned before, we have existing tools to deal with, you 
know, pandemic-style needs. And moreover, you know, I think 
rich countries--the quickest--if we have an issue with 
vaccination, the quickest way is for rich countries to donate 
and get the vaccine to the countries, right? Thinking that we 
can parachute IP for free into a less developed country, and a 
vaccine facility is going to spring up there, I mean, that just 
doesn't make a lot of economic sense. So I think we need to 
think of other tools to help these countries.
    Mr. ESTES. Thank you.
    And I yield back, Mr. Chairman.
    Chairman SMITH of Nebraska. Thank you. Next I will 
recognize Mr. Panetta for five minutes.
    Mr. PANETTA. Thank you, Mr. Chairman, Ranking Member.
    Mr. Goodman, let me talk to you real quick. Your 
organization has provided a number of examples how China seeks 
to use economic coercion to control its trading partners. That 
can impact small countries and our allies, as well. It has 
boycotted Korean automakers over missile defense agreements 
with the United States; blockaded Norwegian goods over Nobel 
Peace Prize awardees; and cut off infrastructure investments in 
Mongolia, based on a visit by the Dalai Lama.
    In some cases, especially for smaller countries, a coercion 
works. However, you also note that these moves can backfire, 
causing more distrust of China.
    A couple of questions here.
    In what ways can economic coercion have unintended 
consequences for China?
    What can we do to capitalize off of these blunders?
    And what are some of the ways in which we can increase the 
resilience of those countries that are so vulnerable to China's 
economic coercion?
    Mr. GOODMAN. Thank you, Mr. Congressman. And yes, we looked 
at all this in this report that we put out a few weeks ago, and 
concluded that a lot of times China is trying to do something 
in the short term tactically to get somebody to take a sign off 
a door, or not have a particular person visit their capital, 
and they don't even succeed at that level often.
    But certainly, this longer-term strategic effect that you 
are referencing tends to drive partners away. And I would say, 
you know, the Korean Government has leaned into us. You could 
draw a straight line from the coercion of Australia, the 
blocking of their coal, their wine, their lobster to the AUKUS 
agreement, the Australia-UK-US agreement. I think that was the 
result of this. It was largely, at least, pushed hard by this 
coercion.
    So I think it is--there is no question that China is its 
own worst enemy when it comes to this coercion, and we should 
find a way to take advantage of that. And the answer that we 
came up with was, to your other point, building resilience, 
helping our partners be less vulnerable, and less subject to 
that kind of coercion from China, and to show them that we are 
a more trusted partner, both economically and strategically.
    Mr. PANETTA. Great, thank you.
    Mr. Greer, you suggested that Congress consider ending PNTR 
with China, given their history of unfair trade practices and 
non-market behaviors.
    Obviously, we have got a lot of issues with China, but I am 
concerned kind of that we have seen how this can play out. And 
what I mean is I know their support for the Phase One agreement 
with China. But I would note that, despite some agricultural 
reforms, China has not taken meaningful action on agricultural 
biotechnology and required risk assessments for beef and pork.
    Now, you note that revoking PNTR will give us time to 
review China's status and put the onus on China to decide if it 
will change its ways or not. But given the history of our 301 
tariffs, don't you think that this strategy will be successful? 
Do you think it will be successful?
    And why do we still have 301 tariffs, and why haven't those 
tariffs changed China's behavior enough to be rescinded?
    Mr. GREER. Yes, Mr. Congressman, I think everything we have 
heard today has really sharpened that we have a very unhealthy 
dependence on China.
    When you look at the section 301 tariffs, our imports from 
China with respect to those items on which the tariffs are 
subject have decreased substantially. So we are now less 
dependent on China for those items. That is the kind of 
direction that we want to go in.
    You are exactly right, that we want to worry about 
retaliation and things like that. It is not an easy answer, and 
I don't want to suggest that it is. But I think we need to make 
sure our exporters and agricultural folks are taken care of, 
and that we are able to maintain that balance that is needed.
    Mr. PANETTA. All right, Mr. Goodman, what are your thoughts 
on revoking PNTR, and what impacts do you think it would have 
on the U.S. economy?
    Mr. GOODMAN. I mean, I think this is a very complex issue 
because we are so dependent on China on the export and import 
side.
    And I think a--if what you are suggesting ultimately is a 
kind of a broader decoupling, I think that would be very costly 
for us. I think what we need to be doing is focusing on 
targeted areas where we have real risks and threats. That is 
why I think that the October 7th measures on semiconductor, 
advanced semiconductor and equipment were appropriate, because 
we were trying to really effectively decouple and degrade 
China's capability.
    I think that is the approach we should be taking, is trying 
to find areas where we have specific risks and threats, and 
finding ways to mitigate those.
    Mr. PANETTA. Thanks.
    Mr. McHargue, just real quickly. Sorry I am giving you a 
little bit of time. What SBS challenges are you facing 
specifically in Nebraska with China and other countries that we 
could diversify our export markets?
    Mr. McHARGUE. Well, ractopamine is one of the products that 
we think that is completely safe, that is usable that we are 
not using right now. I think that is one example.
    Mr. PANETTA. Great. Thank you. Thanks to all of you. I 
yield back.
    Chairman SMITH of Nebraska. Thank you. Next I will 
recognize Mrs. Miller from West Virginia.
    Mrs. MILLER. Thank you, Chairman Smith, and thank you all 
for being here today.
    Last month a bipartisan group of my colleagues visited 
Mexico, Ecuador, and Guyana to learn more about the trade 
challenges and other issues that are facing our bilateral 
relationships in Latin America. The one issue that came up in 
each of these countries is the rise of Communist--China's 
Communist Party's influence throughout the region.
    When Ambassador Tai testified in front of our committee, I 
told her that the CCP is out-maneuvering us when it comes to 
trade deals in the Indo-Pacific, as well as our neighbors in 
our own hemisphere. Unfortunately, the Biden Administration is 
failing to react strategically and successfully challenge the 
growing Chinese influence across the globe. That is why I have 
been diligently working in Congress with my Ways and Means 
colleagues to develop policy solutions that will press the 
Administration into action.
    We are working on redeveloping the U.S. trade leadership in 
the Indo-Pacific Act (sic) to put America back in the driver's 
seat in regional trade deals in the--in Asia. I am a lead 
sponsor of the Made in America Act, which will reshore 
pharmaceutical supply chains from China to opportunity zones in 
the United States. With these policies and many more, it is 
clear that the Republican majority is ready to act. Now we need 
President Biden to step up and deliver for the American people.
    Mr. Goodman, I am concerned major trade deals in the Indo-
Pacific, like the Regional Comprehensive Economic Partnership 
and the CPTPP are putting U.S. exports, businesses, and workers 
at a major disadvantage. Both of these agreements are phasing 
in tariff cuts throughout the region, proving that every year 
the U.S. does not negotiate a real trade agreement, that we are 
falling farther and farther behind.
    Do you think IPEF goes far enough to help the United States 
compete economically with countries like China in the Indo-
Pacific? And if not, what would you recommend we do better to 
compete?
    Mr. GOODMAN. Thank you, Madam Congressman--woman, and I 
agree with your analysis that I think we are losing ground, and 
an agreement like the Regional Comprehensive Economic 
Partnership is diverting trade away from us and towards China, 
other countries in the region. And so we need to be back in 
this game.
    I think the Indo-Pacific Economic Framework has some 
promise. It is good. Thirteen countries have joined us. The 
agenda is not bad. And if these discussions can lead to kind of 
be the tributary for us to get back into the major river of 
major formal trade agreements--in other words, they can develop 
the standards and the best practices that could then feed into 
an updated regional trade agreement--then I think it could be 
useful.
    But in and of itself, as an executive agreement that is not 
going to have enforcement mechanisms, it is not going to have 
the incentives for our partners to want to aspire to these 
higher standards that we are seeking, I am concerned it is not 
going to be enough. So we need to think about it as a way to 
feed into a formal trade agreement.
    Mrs. MILLER. That is a nice way to put it, but it is still 
just a polite suggestion.
    Mr. Greer, on our trip to Latin America we learned the 
region is ripe for American leadership. Central America, in 
particular, can play a key role in countering China's trade and 
investment agenda. While I support CAFTA, I am disappointed 
with the lack of growth under the agreement. The apparel trade 
has steadily declined over the life of CAFTA, while apparel 
imports from China have doubled, proving that CAFTA has left 
some sectors uncompetitive.
    What can we do to make apparel supply chains in the Western 
Hemisphere more competitive and resilient?
    And how can we support more growth and job creation in the 
region?
    Mr. GREER. Congresswoman, as you mentioned, we already have 
a series of strong FTAs in the region. You could have a 
situation where you upgrade some of these agreements, like with 
CAFTA. Perhaps you can modernize it and add on new chapters.
    You know, I know I sound like a broken record, but with 
Section 301 we put tariffs on China, actually giving 
preferential tariff treatment to all other kinds of partners 
relative to China, who is their major competitor. So they 
should be poised to take advantage of that. They should be 
poised to take advantage of this preferential tariff treatment 
relative to China, take advantage of CAFTA, and look at 
modernizing it, as you might suggest.
    Mrs. MILLER. On a different topic, this week a video from a 
country (sic) called JA Solar leaked where the chief financial 
officer openly bragged to potential American investors that the 
company was essentially port shopping to evade the 
groundbreaking human rights law that was signed into law in 
2021, the Uyghur Forced Labor Prevention Act. That bill was 
designed to ensure strict enforcement of our existing ban on 
imports made with forced labor, including the systematic use of 
ethnic minorities for slave labor.
    In my home state of West Virginia we have a Customs and 
Border Patrol Advanced Training Center, and I would hope that 
preparing to enforce our forced labor law would be a priority 
at the facility. Do you have any sense of whether the CBP or 
other U.S. law enforcement agencies have the training and 
resources to ensure compliance with this law?
    Mr. GREER. Well, I could say that they certainly are moving 
forward on it. I am in the private sector, and I hear from 
companies very frequently that they are trying to come into 
compliance.
    I think CBP could use additional resources for enforcement. 
I think it would also benefit the trade to have a better sense 
of what CBP expects with respect to proving up that you are in 
compliance, and having some kind of a safe harbor where you can 
actually actively go in and say, ``Here is where I am, here is 
everything I am doing, I am trying to do the right thing under 
the law. Can you please work with me?'' I think that would be 
helpful to CBP.
    Mrs. MILLER. Thank you.
    I yield back.
    Chairman SMITH of Nebraska. Thank you.
    Mr. Smucker.
    Mr. SMUCKER. Thank you, Mr. Chairman, and I would like to 
thank each of the witnesses for being here for what I think has 
been a really great discussion with a lot of consensus on where 
we stand with China, the potential threats of China, certainly 
their goals, and what they want to see us accomplish.
    I do want to go back to some of the discussions that--the 
questions that Mr. Panetta had asked in regards to PNTS (sic). 
And Mr. Greer, I think he asked you this question. You have 
advocated for revoking PNTR completely. I guess I would like to 
understand that a little more.
    Certainly, we want to counter China in every way we can, 
but, you know, the fact of the matter is they are still also 
one of our largest trading partners. Someone else, I think, had 
mentioned, you know, how complicated the issue is because we 
have American businesses who rely on China for market for their 
products, and we certainly still receive a lot of goods, as 
well. So can you explain to me what you mean by revoking PNTR?
    Are you looking for a complete decoupling of trade with 
China at some point, or what is the practicality of revoking 
PNTR?
    Mr. GREER. So it is hard to imagine a world where we are 
completely decoupled from China, absent some significant 
geopolitical event.
    But before China had PNTR, they were subject to an annual 
certification under the Jackson-Vanik amendment, where you, 
Congress, and the president together, if I recall correctly, 
had to decide whether or not--it was Congress who had to decide 
whether or not China was going to continue to receive most 
favored nation treatment. And so, going back to that situation 
where China no longer benefits from complete certainty all the 
time, that brings an element of discipline.
    Before 2000, before PNTR was granted, we didn't have 
manufacturers going over to China as much and putting their 
factories there, and exporting back here because they didn't 
know that they would always have certainty of access to this 
market. Going back to that situation would discipline the 
Chinese. It wouldn't raise the tariffs right away. It would put 
the hands--it would put in your hands to decide on a yearly 
basis whether you, Congress, think that we should continue to 
have normal trade relations with China.
    Mr. SMUCKER. Have you looked--and again, I am not 
disagreeing with what you are saying, just trying to evaluate 
whether that makes sense--have you looked at the domestic 
economic impact? For instance, you know, what impact would it 
have on the business community and on U.S. jobs?
    Mr. GREER. So if you went back to a Jackson-Vanik-style 
yearly amendment, nothing would happen unless you decided, 
okay? So if you say we are going to go back to a yearly 
certification, nothing immediately happens to those tariffs. 
You are still in a situation where you are under control. What 
happens is you get leverage.
    The problem we have always had with--whether it is China or 
other trading partners, is you, Congress, you have given away a 
lot of the tariffs over years for a lot of different reasons, 
good or bad, and you have lost some of that leverage.
    If you go back to this situation where China, on a yearly 
basis, has to yearly get an approval to continue to have the 
same tariff regime they are enjoying--301 aside--that gives you 
leverage with China to try to get the kind of market access 
behavior that we would want, without immediately raising all 
these tariffs, and you can have that in your pocket if you need 
to.
    Mr. SMUCKER. Thank you. I have also a slightly different 
question, but somewhat related, of course.
    But I have heard the comment ``rules-based system,'' and I 
think part of the problem with China is that they choose not to 
follow the rules that are generally followed internationally. 
And we have trade tools that are available to us that can be 
used to counter that. But in many cases, the Biden 
Administration's decision to abandon those tools has left us 
with very little. And, you know, instead, in some ways the 
Administration has chosen to mimic China's aggressive economic 
subsidies to promote domestic production.
    And maybe, Mr. Duesterberg, I will ask you the question. 
Does that work? What message does that approach send to our 
allies? Do you think that these actions may encourage our 
trading partners to abandon a rules-based system of trade?
    Mr. DUESTERBERG. Well, it is--the adoption of what, in 
effect, is a targeted industrial policy in the United States 
has had a couple of impacts. One of them is that our many--our 
friends--and I keep saying ``our friends,'' hoping that the 
Europeans remain our friends with regard to actions on China, 
but it has stimulated a sort of a competitive industrial 
policy--they are going to adopt subsidies for their green 
industries and other industries.
    Japan has adopted a subsidy regime to try to get their own 
companies into the game. So another impact of that is that our 
credibility in trying to gain WTO reform on the subsidy code is 
really shot to pieces because we are doing what we are trying 
to get China and have been trying to get China to do, or----
    Mr. SMUCKER. Not to do, yes.
    Mr. DUESTERBERG [continuing]. To renounce for two decades. 
So all in all, it is a problem.
    You know, China is not going to change its behavior. And so 
that is why I have advocated trying to create alternative 
rules-based agreements that basically exclude China.
    Mr. SMUCKER. Thank you.
    Chairman SMITH of Nebraska. Thank you.
    Mr. Beyer----
    Mr. BEYER. Mr. Chairman----
    Chairman SMITH of Nebraska [continuing]. You are 
recognized.
    Mr. BEYER. Thank you very much. And Mr. Chairman and 
Ranking Member, thank you for putting this on. And I have 
really enjoyed the testimony and learned a great deal from it.
    Mr. Goodman, I truly appreciated your testimony. We 
discussed the importance of U.S. economic engagement and trade 
with our partners and allies in the Indo-Pacific. Your 
explanation of the motivations behind TPP, that it was intended 
to strengthen the existing alliances in a key region, help 
build new relationships echoes my own belief that withdrawing 
from the TPP was one of the enormous strategic mistakes of the 
last 20 years, and a mistake that we will pay for, for years to 
come, particularly in the context of the Chinese efforts to 
economically dominate the region.
    You mentioned that the successor to TPP, CPTPP, is 
continuing to evolve. China has applied to it. Assuming that 
our trade ambitions don't grow beyond the IPEF (sic) and China 
enters the CPTPP, what should we expect the consequences to be?
    And please describe how China could take advantage of 
writing the rules of the road, something that should be our 
responsibility?
    Mr. GOODMAN. Well, again, I couldn't agree more with your 
analysis, Mr. Congressman. I think it was a catastrophic 
mistake to pull out of TPP, and I think it would be an even 
greater catastrophe if China were in CPTPP and we weren't in 
anything over there.
    So I think, you know, our allies, Japan, Australia and 
others who are in CPTPP are going to hold off China's 
application as long as possible. But at some point I think they 
are going to have to entertain that, especially now the UK 
seems likely to join. And so I think it is not unrealistic to 
think that two or three years from now China could be on the 
road to acceding to CPTPP, which would be just devastating to 
our interests, because they would be in there trying to shape 
and probably undermine some of the good rules that are in TPP.
    And so we need to have something, and that is why I am--I 
just feel it is so important for us to use IPEF as a way to get 
back into something--a higher standard.
    And I just throw out here--which is probably risky for me 
to do, but since you all, in a very bipartisan support--with 
bipartisan support, passed the USMCA not three years ago, it 
seems to me that could be--I know it has got unique elements to 
it, but that is the sort of tested model of a trade agreement 
that maybe could be updated, built on, expanded in the region 
if that is our more comfortable approach than going back to 
this TPP.
    Mr. BEYER. And thank you for bringing up USMCA, because I'm 
never tired of pointing out that USMCA, which was bipartisan, 
celebrated, one of the major achievements of the last number of 
years during the Trump Administration, 80 percent of it has 
showed up in what was directly taken, word for word, from TPP.
    Mr. Houseman, in your testimony you mentioned how U.S. and 
Canadian production of minerals critical for the manufacture of 
EVs isn't nearly sufficient if we are going to compete with 
China in the future. Now, we know the Administration is 
pursuing a number of side agreements, and I appreciate the 
intent of the agreements. We don't like that Congress is left 
out. But are you concerned about the relative weakness in terms 
of environmental and labor protections?
    Mr. HOUSEMAN. Thank you for the question. Yes. I mean, I--
for USW, the importance here for critical minerals is that--how 
we mine and process those materials.
    Right now, in Indonesia, where China has invested $16 
billion in nickel processing, the environmental degradation 
there is extreme. Annually, 1,400 workers are injured there and 
5 are being killed, according to Indonesian unions there. Is 
that really the type of trade agreement or trade arrangement 
that we want to set up with our trading partners, where we are 
exploiting workers and allowing them to be killed?
    Like, this is the kind of system that we need to set up, 
and this is why I am so concerned about when we talk about the 
rules of origin. In the TPP, for example, up to 65 percent of a 
vehicle could have been made with Chinese content and shipped 
into the U.S. market because we only had a 35 percent rule of 
origin standard in the TPP. That was one of the reasons why the 
United Steelworkers opposed the agreement.
    The idea of how our trade rules are set up, to ensure that 
we have standards and the ability of enforcing those standards 
and ensuring that the rules of origin are set as a way to our 
American goods are going to be prioritized in the manufacture 
and distribution so that our members, union members and also 
workers across all of--non-union or non-union (sic)--can 
benefit.
    And I think those are the reasons why, you know, we look 
at--when we have, for example, in cobalt, where USW has miners 
up in Canada, and have worked with a facility here in North 
Dakota, there is--nearly 80 percent of the world's cobalt is 
processed in China. And, you know, they are able to effectively 
swamp the market. They actually stopped a cobalt mine here in 
Idaho in part by just dumping into the market and depressing 
the price so much that this Idaho project couldn't move 
forward.
    So there are opportunities here, but we are going to have 
to invest, which I think you are kind of hearing here a bit, is 
this idea that we need to actually provide a bit of fiscal 
support and the protections necessary to allow firms that--
private firms to develop their mines.
    Mr. BEYER. Great, great, thank you.
    Mr. Chairman, I yield back.
    Chairman SMITH of Nebraska. Thank you. Mr. Murphy is 
recognized.
    Dr. MURPHY. Thank you, Mr. Chairman, and thank you all for 
coming today. It is obviously a huge issue for us in this 
country.
    It is obviously clear that China is trying to dominate the 
world: Belt and Road Initiative, economic coercion, predatory 
trade practices, espionage balloons, police stations. We can go 
on and on and on. All wars are not kinetic. And it is obviously 
that this is a war of attrition, if you were, as far as trade 
goes.
    America is suffering because of it. The farmers, 
manufacturers are being cheated. In 2018 the Commerce 
Department found there were two separate cases that Chinese 
exporters had significantly undersold and subsidized cast-iron 
soil pipe and cast-iron fittings in the United States, one.
    At the same time, AD/CVD duties were being imposed to 
counteract China's unfair trade practices, but U.S. businesses 
had to devote extensive time, money, resources toward remedies 
under U.S. trade laws that are still supposed to--are supposed 
to be designed to hide those--to hold those accountable.
    And even when relief is granted, China and other trade 
partners commonly engage in evasive tactics to avoid penalties. 
They just move around. It is whack-a-mole, and we are losing 
the global contest at the expense of U.S. taxpayers.
    So let me just shift to the China solar issue just for a 
minute. In spite of all that we have discussed--and I am sure 
that the Biden Administration is cognizant of what is going 
on--the President issued an emergency declaration to allow 
imports of unfairly traded solar products from China into the 
U.S. with no additional tariffs for two years. That hadn't been 
done since 1946, when President Truman brought in wood so he 
could build houses after World War II.
    Mr. Greer, I am an original cosponsor of the bipartisan 
resolution of disapproval, which would reverse the 
Administration's emergency declaration that suspends tariffs, 
suspends these tariffs on Chinese solar products that are 
circumventing U.S. trade laws through four other countries. 
Given that we have all said today, can you help me understand 
why we would embolden China to destroy American jobs and cheat 
American manufacturers?
    Mr. GREER. I can't help you understand that, because it 
doesn't make sense to me either. And I think that we need to 
make sure that our domestic producers in any kind of sector 
need to have the certainty that when they get trade relief 
through trade remedies, they can count on it.
    Dr. MURPHY. It is just unconscionable. We are literally 
selling ourselves out while we know we are selling ourselves 
out.
    Let me ask you one other question. China--Chinese domestic 
consumption is really weak compared--for a modern economy, and 
its internal market consumes a surprisingly small share of the 
goods that it produces. It has relied on the U.S. consumers for 
growth in its export-oriented growth strategy. In other words, 
we are the ones paying, and their own people are not buying. 
The U.S. is, by far, China's biggest export market. No other 
country has expressed a willingness or ability to absorb 
China's subsidized forced labor overproduction. Are we funding 
China's economic and military growth?
    Mr. GREER. There is no question about that, sir. Again, it 
is something that, to me, seems unbelievable that we are doing. 
I think we will always have some kind of trade with China, but 
we have to manage it. It has to be in the appropriate sectors. 
It has to be balanced. We have these gross persistent trade 
deficits. We are funding our strategic adversary.
    Dr. MURPHY. Absolutely. And I don't say--I don't care, 
Republican, Democrat, we are asleep at the wheel, and it is 
staring us right in the face.
    So if we repealed most favored nation status and 
increasingly denied China our market, our market to fund their 
growth, specifically military growth, wouldn't China's growth 
slow and stagnate?
    Mr. GREER. It could. We have a global market, and they may 
find other ways to dump all of their stuff. But we are, as 
you--you know, I like to call us--we are the consumer of last 
resort. That is what we are. And so I think that we could help 
control that relationship if we change our approach.
    Dr. MURPHY. President Reagan's strategy to win the Cold War 
was not military. It was economic. And this is exactly what we 
did to Russia as we starved them economically. And I would 
submit to my Republican colleagues and my Democratic colleagues 
that we wake up, and we begin the same thing. Because if not, 
we are going to wake up very, very soon and either be speaking 
Mandarin or have every economy of ours devoted to China.
    Thank you, Mr. Chairman. I will yield back.
    Chairman SMITH of Nebraska. Thank you, Mr. Murphy. Next, 
Mr. Steube.
    Mr. STEUBE. Thank you, Mr. Chairman.
    We need a worker-focused trade policy, not a corporate-
price-centered one. And we need to take every step necessary to 
achieve balanced trade and eliminate the trade deficits that 
are bleeding our economy to death. We should use tariffs 
strategically to stop unfair trade in our market and to ensure 
the elimination of trade deficits.
    We have been running deficits of hundreds of billions of 
dollars year in and year out for decades. These trillions of 
dollars come back in the form of foreigners owing--owning 
American assets permanently. The United States net 
international investment is an astonishing negative 16 
trillion. Foreigners own 16 trillion more here than we do 
around the world. Foreigners, including China, own these assets 
and the future income from these assets.
    China has engaged in economic aggression against the United 
States for years. It has a mercantilist policy designed to 
build its economy at the expense of others, including ours, 
using a largely closed market and massive subsidies. It has 
stolen our technology, manipulated its currency, infiltrated 
our infrastructure, hacked our businesses and personal 
databases, engaged in cyber attacks on our private and 
governmental systems, undertaken espionage against our 
businesses and our government. China accounts for 80 percent of 
all counterfeits coming into America, and their IP theft alone 
has been estimated to cost us $300 billion annually.
    In short, it has conducted--China has conducted economic 
warfare on us and the West, and has done it for decades. And we 
are losing because of Biden's trade policies.
    As a result of our own foolish trade policies of the past, 
we have lost millions of jobs and much of our technology 
leadership, and have transferred trillions of dollars to China. 
These huge annual trade deficits have built their military and 
developed their industry and technology at our expense. Their 
economy has grown from about $1.2 trillion in 2000, when ours 
was $10 trillion, to about $16 trillion now, when ours is about 
$22 trillion. In this period our cumulative trade deficits in 
goods with them has amounted to more than $6 trillion. The 
United States has not faced a foe with economic power this 
close to our own in over 130 years.
    Our trade and economic integration must be balanced and on 
terms that help America and our workers, not China. We should 
not link our technology sectors with China, and we should have 
no trade or industrial cooperation in the security or joint use 
technology sectors, period. We need to limit Chinese investment 
in the U.S. economy, and to regulate outward investment to 
China. We should put tariffs on all products imported from 
China until we achieve balanced trade, and we must insist that 
they buy our products if they want access to our markets.
    In the remaining time I have, Mr. Greer, if there is 
anything that I stated that you would like to expand upon, I 
will yield my remainder of time to you.
    Mr. GREER. Certainly, I am happy to do that, and I think 
that your policy prescriptions are things that we need to 
strongly consider.
    And I--you know, coupled with Dr. Murphy's comments, policy 
prescriptions for dealing with China depend on what you think 
about the threat. So if our premise is China is a threat, they 
are generational challenge, we think that they are preparing 
for military conflict with their neighbors or, heaven forbid, 
even us, if that is the case, then we need to be thinking about 
our trade relationship in a way that strengthens our 
manufacturing and defense industrial base, maybe at almost any 
cost.
    If you think that that threat is overblown, or you think 
that people are being alarmist, then your ideas on what the 
policy prescriptions are going to be will be different. So I 
think we need to have a conversation about that.
    I fall in the first camp, that I am concerned that we are 
on a knife edge right now, and that we need to make sure our 
trade policy reflects that. But I think we need to talk to 
China. I think we need to be clear with them. I think we need 
to set ground rules. I think we need to do enforcement so that 
we can avoid that kind of situation, that we can have a strong 
base.
    The strongest thing we can do for our allies is have a 
strong industrial base here in the United States, and be the 
arsenal of democracy. We can't do that if we are sending our 
manufacturing overseas.
    Mr. STEUBE. I agree with you 100 percent, and I think COVID 
taught us that when we were struggling to get products in from 
all over the world to solve some of those industrial problems. 
And it is time--we are in an economic war with China, and we 
are losing, and we have been losing. And it is time for us to 
change the trade policy to an America-first agenda to focus on 
American products and ensure that we are focusing on the safety 
and security of the American people first and China last.
    Thank you for your time. I yield back.
    Chairman SMITH of Nebraska. Thank you. I next recognize Ms. 
Sanchez, five minutes.
    Ms. SANCHEZ. Thank you, Mr. Chairman and to our Ranking 
Member Blumenauer.
    I just want to remind my colleagues that many of us worked 
hard to pass strong trade legislation in COMPETES last year 
that would have confronted China's unfair trade practices. 
House Democrats led on COMPETES, the CHIPS Act, and the Uyghur 
Forced Labor Prevention Act. Unfortunately, Republicans chose 
not to join us across the board on those pieces of legislation.
    The conversation, it seems to me, needs to be about 
competition. We are trying to slow China down, but instead we 
need to focus on speeding ourselves up and continuing to look 
ahead to ways in which we can stay competitive in various 
industries.
    Mr. Houseman, in your testimony you briefly discuss the 
importance of ensuring air, water, and labor standards are 
considered and measured in anti-dumping and countervailing duty 
investigations. And I agree that American workers and their 
employers should not have to compete against countries like 
China that enable environmental degradation and forced labor. 
Could you elaborate on why it is crucial to level the playing 
field for American workers and industries regarding other 
countries' labor and environmental practices?
    And do you have an example of how considering these factors 
would play out in anti-dumping or countervailing duties 
investigations?
    Mr. HOUSEMAN. Sure. Thank you for the question, Ms. 
Sanchez, Representative Sanchez.
    You know, 75 percent of Vietnam's industrial wastewater 
isn't treated. The idea that we passed the Clean Water Act so 
that I can go fishing in Montana, where I used to work at a 
paper mill, and not see the discharge out from the mill and 
know that it is clean, versus in Vietnam right now people's 
water--you know, or Indonesia, where there--we are talking 
about nickel mining, and, literally, the waterways and the 
fishing in the local communities there has been completely 
degraded and eroded, like, this idea that that nickel is then 
being processed and then sent to the United States for further 
processing is--you know, comes at the expense of U.S. furnaces 
in Pennsylvania.
    This idea that we shouldn't be able to, like, countervail 
against this sort of, you know, built-in process, these are not 
like products. If you have a steel beam, one made with high 
carbon, no concern to environmental standards, and killing 
workers versus U.S. standards, we should be able to account for 
that economic cost. Those aren't like products. And so, you 
know, that is one of the reasons why the USW has been really 
out there and pushing on this idea to--and we can account for 
it.
    I mean, literally, we send inspectors to look at tomatoes 
in Mexico to make sure that they are abiding by health FDA 
standards.
    Ms. SANCHEZ. I appreciate the answer.
    Mr. Goodman, Mr. Greer has recommended that the U.S. should 
revoke permanent normal trade relations with China. And this is 
building on the questions that Mr. Panetta and Mr. Smucker 
asked earlier. Experts maintain that the tools we have to 
address these issues are limited when dealing with a country. 
Let's be honest, that lacks transparency or doesn't adhere to a 
rules-based trading system.
    But other people talk about the disruption that PNTR would 
have on the global economy if we were to repeal it. Can you 
share your perspectives on revoking PNTR, and the alternatives 
that we might have to address the challenges posed by China, 
while still protecting good-paying American jobs?
    Mr. GOODMAN. Well, as you captured in your question, Madam 
Congresswoman, this is a very complicated issue because it is 
easy to understand why there would be an argument for not 
having a kind of normal trade relationship with a country with 
these practices.
    But on the other hand, the reality is we do have this 
complex and large relationship, and it would be very--the fact 
is it would be very disruptive if we move sharply away from 
that.
    But there are things we can do, I think, both to deal with 
specific risks, as I say, where we can use targeted efforts 
like these semiconductor controls, which I think were 
appropriate, or working with allies. As I mentioned, Ambassador 
Lighthizer, when he was U.S. trade representative, organized 
this trilateral grouping on industrial policies--on China's 
industrial policies and IP and other issues. And I think we 
should revive that and be working with allies to try to push 
China on those issues.
    But finally, I think at the end of the day it comes back to 
China is going to be China. We have to do the stuff that we 
have to do. You know, invest in ourselves. We have to have a 
trade policy that makes us competitive and advances our 
economic and strategic interests. So I think that is where I 
would put most of our focus. But there are things we need to do 
that are targeted to deal with the China risks.
    Ms. SANCHEZ. I appreciate your answers.
    And I yield back.
    Chairman SMITH of Nebraska. Thank you. Next Mrs. Fischbach 
is recognized.
    Mrs. FISCHBACH. Thank you, Mr. Chair, and thank you to all 
of the witnesses for being here today.
    I would like to focus on a little bit--Mr. McHargue, I 
appreciate your comments in your testimony regarding the 
nuanced relationship between Nebraska agriculture, the Chinese 
market, and the broader geopolitical dynamics.
    Agriculture in my state currently has a very similar 
relationship. I am from Minnesota, heavily ag district, 
exporting roughly $1.5 billion of ag product every year, and 
representing a market for nearly a quarter of our ag exports. 
This competitor-customer dynamic is important to consider, 
given national security concerns and other larger factors 
beyond agricultural exports.
    With that in mind, can you share your perspective on--of 
the appropriate balance between expanding the Chinese market 
access and diversifying ag export opportunities through 
additional trade agreements?
    Mr. McHARGUE. Yes, I certainly appreciate that question, 
because it really gets at the heart of a lot of this discussion 
we are actually having this afternoon.
    And again, as I mentioned earlier, I think one of the ways 
that we can help that conversation is by continuing to 
establish other markets. And so then it is not quite as much 
about China, and it is more about how do we, as America, an 
agricultural powerhouse in the world, continue to sell our 
products that we do so well. And one of the things that we do 
really well is producing, I would say, probably one of the 
lowest-carbon-footprint ag products in the world. And we need 
to develop those other countries.
    But I think, with China, as I have those conversations and 
I think about the people that I do business with even in my 
hometown, it is still important that we do business with people 
that need our product. It is very clear that China is growing 
in their need for grains. Just this last year they came--became 
one of the largest grain importers in the world. So that 
indicates to me that they are going to continue to need our 
products.
    And so I think that gives us the leverage, quite frankly, 
to have some of these conversations that we are having here 
this afternoon. If they don't need our products and we don't 
have the ability to trade with them, I think we lose a lot of 
that leverage to actually deal with some of the things that we 
have talked about today.
    Mrs. FISCHBACH. And Mr. McHargue, maybe as just as kind of 
a follow-up, but in terms of opportunity cost, what does the 
Biden Administration's lack of negotiations mean to you, your 
members at the farm level?
    Mr. McHARGUE. Yes. Again, we do such a good job producing 
our products. And if we don't have the world out there--I think 
we do actually have the world out there that needs it. But 
every single day that goes by, I think we are at a 
disadvantage. And so to keep the U.S. in the position that we 
are in, I would say every day that this Administration is not 
working on trade is a day that we are losing.
    Mrs. FISCHBACH. Thank you very much. And maybe I will just 
throw this out with my additional--or with my last minute-and-
a-half for Mr. Duesterberg or for Mr. Greer.
    How do we appropriately balance these factors with the 
broader national security concerns of an increasingly 
aggressive Chinese economic agenda?
    Whoever wants to, go first.
    Mr. DUESTERBERG. Well, it is awfully clear that China has 
benefited from acquisition of U.S. technology in much of what 
they have done in terms of developing--and advanced military 
capabilities has been at the expense of U.S. producers.
    But also it is a result, in some part, of Chinese ability 
to access American technology and know-how through access to 
the American academic system. They send 300,000 or 400,000 
students over here. They--some of them work in industry, they 
return to China, they bring secrets of one sort or another with 
them.
    So I don't know what the solution to that is. We need to 
reflect on that. But certainly, America has been crucial in 
China's development of an advanced military system, and we have 
to find ways to--selectively, at least--stop investments, stop 
their ability to be in programs that are directly related to 
military technology.
    And I would also suggest to anything associated with 
Chinese exports of their authoritarian state surveillance 
technology and the like.
    Mrs. FISCHBACH. Well, thank you very much.
    And my time is expired. I yield back.
    Chairman SMITH of Nebraska. Thank you. Mr. Kustoff is 
recognized for five minutes.
    Mr. KUSTOFF. Thank you, Mr. Chairman. Thank you for 
convening today's hearing. And thank you to the witnesses for 
appearing today.
    Mr. Greer, thank you also for appearing, and for your 
former public service. If I can, to you, I would like to talk 
about intellectual property theft. And I know that other 
people, including Congressman Buchanan, have talked about that, 
and talked about the study that showed that Chinese IP theft 
has cost our country anywhere from $225 billion to $600 billion 
a year. And I know that is a big span, and those numbers are a 
little expansive. But the fact of the matter is it is 
substantial.
    If I can, Tennessee is home to one of the largest 
manufacturers of charcoal barbecue grills in the U.S., the Meco 
Corporation, M-E-C-O. Now, about 20 years ago Meco employed 
about 900 Tennesseans. That number is down to about 200 at the 
same factory today, and that is because China has used IP theft 
to unfairly capture most of the domestic charcoal grill market, 
importing grills that are virtually identical to the grill that 
the Meco had patented.
    [Slide]
    Mr. KUSTOFF. If I can, I want to show you this poster. The 
top, if you can see up there, is Meco's grill. And that grill 
hit the market in 1999 under patent. The below grill is a 
Chinese knockoff, and that showed up in the market in 2018, 
when the Meco grill was still under patent. The model, the 
coloring, the design, they are all the same. In fact, the two 
grills are really indistinguishable from one another.
    There is also evidence of Meco's grills being used for 
presentation in China's showrooms, and the Meco's grill 
photography was used by a competitor to sell knockoff grills on 
Alibaba, and the Meco grill photography being used in Chinese 
factory catalogs. We all know that this situation with Meco is 
not unique.
    So my question: in your written testimony you talk about 
this 2018 report that USTR did, and I assume you were there in 
2018 as chief of staff. If you were still there today, based on 
the report, and assuming that what I have represented to you is 
correct, which it is, what tools in the arsenals at USTR would 
you propose that we take advantage of to either punish or push 
back the Chinese?
    Mr. GREER. There are two things I would do off the top of 
my head, and I could probably think of more if you give me a 
few minutes.
    But the first thing I would do is I would tell Meco, ``You 
should look into Section 337 of the Trade Act,'' because this 
is something that gives you a right to ban the import of items 
that take away--that are a theft of your trade secrets, or your 
trade dress, or anything like that, or your trademarks. There 
is all kinds of protections, and that is a private right of 
action, where you can get an exclusion order. So that is the 
first thing I would tell them.
    The second thing I would say at USTR is this is the kind of 
thing where, under the Phase One dispute settlement 
arrangement, there are supposed to be monthly, quarterly, 
semiannual meetings where you can take this to the Chinese. And 
the whole purpose of these meetings are to identify these 
issues and resolve them before they blow up into bigger issues 
and end up in tariffs escalating, and that kind of thing.
    And those are the kinds of processes that I would expect to 
see.
    Mr. KUSTOFF. Thank you for that. Of course, you are not 
there any longer.
    Based on the current makeup, if Meco did what you 
suggested, would there be any retribution? Would there be any 
relief?
    Mr. GREER. So it depends. So first of all, with the Section 
337, if you--if your case is successful, you can get an 
exclusion order, where those things are not allowed to come 
into the United States. So that is a strong relief.
    With respect to the Phase One agreement enforcement, the 
whole purpose is to go to the Chinese, say, ``Here is the 
problem. Go to your people and have them fix it.'' And because 
they are authoritarian, it is a little easier for them to do 
that than it might be for us.
    So there are ways to secure relief. It is not always easy, 
but there are processes you can go through to pursue it.
    Mr. KUSTOFF. Thank you, Mr. Greer. And of course, that 
would--not only Meco, that would apply to any other similarly 
situated company with the same circumstances.
    Mr. GREER. That is correct, sir.
    Mr. KUSTOFF. Thank you. Thank you very much.
    Thank you, Mr. Chairman. I yield back.
    Chairman SMITH of Nebraska. Thank you. Next, Ms. Sewell 
from Alabama.
    Ms. SEWELL. Thank you, Mr. Chairman and Ranking Member.
    I first would like to thank our witnesses for their 
testimony today. In order for us to truly address the People's 
Republic of China's harmful tax, I mean trade policies, we need 
more than rhetoric. We need action. I think all of you on this 
panel would agree on that.
    I am proud that the Biden Administration has taken decisive 
action. First, we in the Congress, under President Biden, took 
a major step to combat China's growing influence by passing the 
historic Infrastructure Investment and Jobs Act. By modernizing 
our infrastructure for the 21st century and investing in 
working families, America will be better positioned to compete 
with China for decades to come.
    Also, congressional Democrats and President Biden passed 
the America COMPETES Act, which is the boldest legislation in 
our country's history to directly confront China's anti-free 
trade policies and practices, and to promote American workers.
    As we have continued to advance a worker-centered trade 
agenda, Congress must be more active in combating China's anti-
free market practices and ensure that our steelworkers can 
compete on a level playing field. That is why I will soon be 
reintroducing the Leveling the Playing Field Act 2.0. This 
bipartisan legislation will modernize our anti-dumping and 
countervailing duty enforcement laws to push back against 
China's Belt and Road Initiative, combat China's circumvention 
of U.S. laws, and target repeat offenders. These are common-
sense bipartisan solutions to protect American workers and get 
tough on China's anti-market free market practices.
    Moreover, today I am joining my colleague, Representative 
Bost, to introduce the bipartisan Fighting Trade Cheaters Act, 
which will increase civil penalties for fraudulent and grossly 
negligent violations of the U.S. trade laws.
    These two bills are concrete examples of legislation that 
will directly combat the People's Republic of China's illegal 
trade practices, and I hope that my colleagues on both sides of 
the aisle will sign onto the bills and, more importantly, get 
them passed.
    Mr. Houseman, can you explain or expand on how the 
steelworkers have been impacted by some of the current 
loopholes in the anti-dumping and countervailing duties laws?
    And do you think that the passage of the Leveling the 
Playing Field 2.0 would be helpful to steelworkers and other 
workers in my district and across the United States?
    Mr. HOUSEMAN. Thank you for the question, Representative.
    Yes, the United Steelworkers were strong supporters of 
Leveling the Playing Field Act 2.0 in the 117th Congress. And 
when the bill is introduced, I am pretty sure we will endorse 
again.
    And one of the reasons is, for example, tire workers. You 
know, we have--we represent--we are the largest union in tire 
manufacturing. We represent over half of domestic passenger 
vehicle light truck duty tires. And we have been--we have had 
to do five anti-dumping and countervailing duty cases, 
including two on PVLT.
    The first one was against China. Successful. We, hands 
down, proved that 50 million tires were coming into the market, 
you know, and just dumped at below costs just to kind of 
capture market share and negatively impact--we lost 5,000 
workers in that industry during that period of time. We were 
successful there.
    But then, three years later, the union had--a few years 
later the union had to put out another AD/CVD case. And it 
was--we saw imports rise very quickly from companies that also, 
quite frankly, have parent companies that are based in China. 
And so they just basically shifted production to third-party 
countries, and just started shifting--putting those tires back 
into the market. We filed that case, and we are successful in 
that anti-dumping and countervailing duty case, as well.
    But it would have been easier with your Leveling the 
Playing Field Act 2.0. These successive cases, and particularly 
third-country subsidies from China, are key items to address.
    And then, you know, the union is familiar with your--the 
Fighting Trade Cheats bill, which was introduced by Senators 
Brown and Tillis over on the Senate side. And, you know, look, 
we think the idea of enhanced penalties for bad actors is a 
right idea.
    I mean, the idea that these importers continuously evade 
and break the law--like, for example, in--you know, there has 
been three requests, investigations that have found evidence of 
a Chinese-owned company operating in the Dominican Republic, 
where they brought in aluminum extrusions and trans-shipped 
through the Dominican Republic to avoid duties, multiple cases 
now. We should be able to attack and address those sorts of 
repeat offenders and repeat importers, and provide meaningful 
penalties to--and potentially knock them off the list from 
being able to import.
    Sorry. I know I went over.
    Ms. SEWELL. Thank you.
    Thank you, Mr. Chairman, and thank you so much for allowing 
him to go a little bit over.
    And I would encourage my colleagues on both sides of the 
aisle to look into both of those bills. Thanks.
    Chairman SMITH of Nebraska. Thank you very much.
    Again, thank you to our witnesses for participating here 
today. I think a timely discussion, one that focuses on 
solutions, as well. So thank you for sharing your expertise, 
your insight, your ideas, and solutions.
    Please be advised that members have two weeks to submit 
written questions to be answered later in writing. Those 
questions and your answers will be made a part of the formal 
hearing record.
    With that, the subcommittee stands adjourned.
    [Whereupon, at 4:25 p.m., the subcommittee was adjourned.]
      

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