[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
FIELD HEARING ON TRADE IN AMERICA:
SECURING SUPPLY CHAINS AND PROTECTING
THE AMERICAN WORKER_STATEN ISLAND
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HEARING
BEFORE THE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
MAY 9, 2023
__________
Serial No. 118-15
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Printed for the use of the Committee on Ways and Means
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________
U.S. GOVERNMENT PUBLISHING OFFICE
54-351 WASHINGTON : 2024
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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
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C O N T E N T S
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483
OPENING STATEMENTS
Page
Hon. Jason Smith, Missouri, Chairman............................. 1
Hon. Richard Neal, Massachusetts, Ranking Member................. 2
Advisory of May 9, 2023 announcing the hearing................... V
WITNESS
John Atkins, President, Global Containers Terminal............... 6
Dale Hemminger, Owner/Operator, Hemdale Farms Dairy and
Greenhouses.................................................... 17
Nury Turkel, Chair, United States International Religious Freedom 31
John Romano, CEO, Tronox......................................... 46
Thomas O'Shei, President, United Steel Workers Local 135......... 53
LOCAL SUBMISSIONS FOR THE RECORD
Local Submissions................................................ 126
PUBLIC SUBMISSIONS FOR THE RECORD
Public Submissions............................................... 131
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HEARING ON TRADE IN AMERICA:
SECURING SUPPLY CHAINS AND PROTECTING
THE AMERICAN WORKER--STATEN ISLAND
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TUESDAY, MAY 9, 2023
House of Representatives,
Committee on Ways and Means,
Washington, DC.
The committee met, pursuant to call, at 10:02 a.m., at the
Global Containers Terminal, 300 Western Avenue, Staten Island,
New York, Hon. Jason Smith [chairman of the committee]
presiding.
Chairman SMITH. The committee will come to order.
Welcome to today's field hearing of the Ways and Means
Committee about the future of America's trade policy.
I am told that this field hearing is the first outside full
committee hearing in a hundred years in Congress. And to do
that in Staten Island, we are blessed to be here with Ms.
Nicole Malliotakis in her beautiful district.
As America's front door to the world, New York City and
ports like the one here at Staten Island represent the front
lines of America's global trade. Last year, the total value of
U.S. goods traded was approximately $5.3 trillion. That
includes food from our farmers, the energy in our homes, the
medical equipment in our hospitals, and everything in between.
There isn't a single worker, family, or business in our
country that isn't impacted by trade, some positively and some
negatively.
Unfortunately, bad trade policies in Washington have
allowed foreign countries to take advantage of our workers and
destroy American jobs. Last year, our trade deficit reached
$945 billion, the largest ever.
The American worker should be at the center of our trade
policy. That is why the Ways and Means Committee is here today
to listen to Americans on the front lines about how we can
revitalize fair trade in America.
During the hearing, we will be passing around notebooks
that you will see right over here. I would like to ask all of
our audience members to please share your thoughts about how
Congress can improve U.S. trade policies. We want to hear from
you, and we want that submitted into the record.
One key step is to secure our supply chains. We must reduce
our dependency on nations who do not share our values or have
aligned interests.
To be clear, a country that cannot supply their own demand
for food, energy, and medicine, but instead rely on other
nations to fulfill those basic needs, they are no longer
independent, but they are politically dependent. That means
producing more of our own medicine and energy, and where we
can't make it here, ensuring that we are sourcing from allies
close to home.
For our food supply, it means making sure our farmers are
viable and able to make a living off the land and sell
American-grown products without facing nontariff barriers
around the world.
We need to aggressively enforce the commitments our trading
partners made to treat U.S. products fairly. We must build on
the progress from USMCA by pushing more trading partners to
open their markets so our farmers and small businesses can
compete and win.
American families, they need results. We must use trade
enforcement tools to chart a new path forward, to put American
workers first and to hold accountable bad actors, including
China.
To do that, Congress must reassert its constitutional role
as the lead in U.S. trade policy. Right now, the administration
is trying to work around Congress and create so-called
frameworks that lack the force of law.
Congress needs to shine a light on China's human rights
abuses and predatory trade practices. China is forging ahead
with an aggressive trade agenda that cheats America, shapes the
global playing field in its favor, and threatens key American
supply chains and the livelihoods of American farmers and
American workers.
What should be now clear to everyone here today is that
what our country needs is a smart and strategic decoupling from
China.
Workers and small businesses being harmed by China's unfair
trade practices have been overlooked and forgotten for way too
long. They expect us to go further and to use the tools at our
disposal to level the playing field for workers, farmers, and
job creators. We are here to make sure the future of U.S. trade
includes their voices.
I would like to introduce our witnesses for today's
hearing. Dale Hemminger is a second-generation owner and
operator of Hemdale Farms Dairy and Greenhouses in Ontario
County. John Atkins, our host today, is the president of Global
Containers Terminal USA. Nury Turkel is the first U.S.-educated
Uyghur-American lawyer and human rights advocate who serves as
the chair of the U.S. Commission on International Religious
Freedom. John Romano, CEO of Tronox. And Thomas O'Shei,
president of the United Steelworkers Local 135.
I want to thank our witnesses for taking time away from
their families and their busy schedules to share your stories
and ideas.
And I am pleased to recognize the gentleman from
Massachusetts, the ranking member, Mr. Neal, for his opening
statement.
Mr. NEAL. Thank you, Mr. Chairman. I want to thank you for
joining with our witnesses today and holding this hearing.
President Biden and congressional Democrats continue to
push an economic and trade agenda that is focused not only on
building the economy, but that benefits all members of the
working families in America and across our great country.
Democrats have charted the course for a worker-centric trade
policy for well over a decade.
I want to thank those of you who were responsible for
putting up the banners here today. We are indeed very grateful
for the reminder that we want all to prosper because of
American trade agreements.
House Democrats, with leadership of this committee, paved
the way for the May 10 agreement which brought labor and
environmental provisions to the core of the U.S. trade
agreements and made them enforceable for the first time.
Democrats have continued to build on the successes of the
May 10 agreement. Most recently, Ways and Means Democrats
demanded the prior administration renegotiate, and we did with
the USMCA to enforce these trade agreements.
We ultimately led to a successful agreement that updated
NAFTA, the most pro-worker trade agreement ever based on the
renegotiation, with new facility-specific labor enforcement
mechanisms to address violations of worker rights in Mexico.
The Biden administration has used this new mechanism eight
times to address labor issues that are in front of us.
I know something about that agreement. I was the lead
negotiator on it. And I want to say that in the end, 195
Democrats voted for that trade agreement; 194 Republicans voted
for it. Jimmy Hoffa endorsed it. Rich Trumka endorsed it. And
the Republican Representative, Bob Lighthizer, did a great job
on that trade agreement because he agreed with us on the
enforcement of these agreements.
We understand that U.S. trade policies should not come at
the expense of American jobs or the rights of workers at home
and abroad. That is why committee Democrats have championed the
Uyghur Enforcement Act to prohibit the import of products made
with forced labor by the Uyghur people in Xinjiang, China. We
believe that no supply chain should contain products made with
forced labor.
We know trade, when coupled with the right domestic
economic policies, can play an important role in creating new
jobs and supporting a thriving economy.
The U.S. should open its market to fair trade. When
countries can, we all benefit.
For this reason, committee Democrats have led the charge to
reauthorize and reform the Trade Adjustment Assistance Act for
workers, commonly known as TAA, because we don't think that we
should leave American workers behind as a result of increased
trade with other countries. We need to convince our colleagues
on the other side that TAA is really important.
Committee Democrats are committed to delivering for the
American worker by creating necessary policies that will be a
benefit to them.
In this vein, House Democrats included TAA in the America
COMPETES Act, the most expansive pro-worker legislation to
combat China's unfair trade practices in years. This
legislation, which we passed last year, would strengthen U.S.
trade laws and invest in America's workers while boosting
Americans' economic opportunities.
Our colleagues on the other side, they need to help us
pursue these policies so that we don't do things to the
detriment of American workers.
Let me be clear, the other side has proposed to slash the
budgets of Federal agencies that administer and enforce these
trade laws, in some cases by up to 22 percent. These budget
cuts to U.S. Customs and Border Protection will not be helpful
to the Department of Commerce and other agencies that promote
small businesses. We want to make sure that these cuts don't
take place.
I urge all the members of this committee to ensure that
American workers, farmers, and businesses have the tools they
need to compete in a global economy. President Biden and
congressional Democrats have delivered for the American people.
I was delighted this morning when Mr. Atkins mentioned the
CHIPS issue. It is happening because of the legislation that we
helped to pass.
As a result of the bipartisan infrastructure law, $9.3
billion is going to go directly to New York to invest in roads,
bridges, transit, ports and airports, and other opportunities
for clean water across the region. These historic investments
will reach communities across the entire country, including
rural America and underserved populations.
Federal investments in tax credits championed by Democrats
on this committee in the Inflation Reduction Act will also
drive New York's clean energy transition and create jobs to
take us on a path to net-zero emissions.
Thank you, Mr. Chairman, for offering us this opportunity
and allowing our witnesses to share their expertise and
experience with us.
Chairman SMITH. Thank you, Mr. Neal.
I am pleased to recognize the gentlelady from New York, Ms.
Malliotakis, for 5 minutes.
Ms. MALLIOTAKIS. Thank you, Chairman Smith, Ranking Member
Neal, members of the committee, and welcome to Staten Island.
We are the site of the 1776 Peace Conference during the
Revolutionary War. Fort Wadsworth was used by the British as
their prime defense location. It is where tennis was first
introduced in the United States in 1874. And Sandy Ground is
the Nation's oldest free settlement for African Americans.
You may have seen Staten Island on the big screen if you
watched ``Easy Money,'' ``Working Girl,'' ``The Godfather,''
``Saturday Night Fever.'' We are birthplace to Pete Davidson
and ``The Impractical Jokers.'' And we, of course, are home to
the iconic Staten Island Ferry and what I would argue is the
best cannoli in the United States of America, which we will
have for you to try later this morning.
I would like to thank the chairman for choosing Staten
Island as the setting for the first field hearing on trade in
America. It is my hope that this experience gives members of
the committee a new perspective on New York City and reveals
the vital role that our ports fulfill when looking at American
trade policy and practice.
We are standing in one of the largest harbors in the world.
From 1892 to 1924, over 12 million immigrants passed through
Ellis Island to become American citizens and strengthen this
great Nation.
New York City is and always will be a hub for American
trade, going back to 1613 when the Dutch established fur
trading posts in both Manhattan and Staten Island. And trade
will always be a cornerstone of our Nation's economy.
Today, these historic waters make up the largest container
port on the East Coast and the second largest in the country.
In the first 3 months of 2023, the Port of New York and New
Jersey was the Nation's second-busiest port, moving nearly 1.8
million containers, and last year it moved $271 billion worth
of goods.
Our community is excited that this container terminal is
planning to increase its capacity by 65 percent through 2027
and double by 2030.
And it is because of both private investment and Federal
funding for infrastructure and dredging by the Army Corps of
Engineers that larger vessels and more service options for
goods coming and going will be possible in the future. And I
will work with everyone here to make sure our waters are ready
for larger vessels and the positive impact that they will
bring.
But in order for the local and national economy to truly
reap the benefits of these investments, we must have a pro-
growth tax and trade agenda, and that is exactly what our House
Republicans are focused on.
While this terminal highlights positive recovery and
avoidance of pandemic era headaches, consumer patterns have
undoubtedly changed, and global supply chains continue to
shift.
Though the Port of New York and New Jersey has received a
slight increase in container processing, future freight orders
seem to point to a freight slowdown in conjunction with an
economic contraction and stalling economy under President
Biden.
One area where we feel that we can lead as the Ways and
Means Committee, and there is great potential to grow our GDP,
is exports.
The U.S. became energy independent and a net exporter for
the first time in modern history under the Trump
administration, and the U.S.-Mexico-Canada Agreement passed
with bipartisan support has increased our region's
competitiveness in the global economy.
Now our committee is working to reduce our dependency on
China by enacting pro-growth and trade policies, strengthening
trade relationships with those who share our values to bring
critical supply chains for energy, pharmaceuticals, and
technology home where we can and work with our allies, not our
adversaries, where we can't.
To protect our economy and our national security, Americans
cannot be at the mercy of a nation that can weaponize these
life-sustaining resources against us, as we have seen Russia do
to Europe with energy.
It is time to work to eliminate trade barriers, restore
fair trade agreements with our closest allies, provide new
markets for American products, create jobs for American
workers, and fill this container terminal.
I look forward to hearing today's testimony and working
with my colleagues from both sides of the aisle to accomplish
these goals.
Thank you.
Chairman SMITH. Thank you, Ms. Malliotakis.
I would like to introduce our witnesses.
Mr. John Atkins, our host today, is the president of Global
Containers Terminal USA.
We have Mr. Dale Hemminger, who is a second-generation
owner and operator of Hemdale Farms Dairy and Greenhouses in
Ontario County.
We have Mr. Nury Turkel. He is the first U.S.-educated
Uyghur-American lawyer and human rights advocate, who serves as
the chair of the U.S. Commission on International Religious
Freedom.
We have Mr. John Romano, who is the co-CEO of Tronox.
And then Mr. Thomas O'Shei is the president of United
Steelworkers Local 135.
The committee has received your written statements, and
they will all be made part of the formal hearing record.
I also want to let others in attendance know that they too
may provide a written statement. Please find the clipboards
that we will be passing out throughout the hearing available,
and your statements will be added to the record when submitted.
Now for our guests. You each have 5 minutes to deliver your
oral remarks.
Mr. Atkins, you may begin.
STATEMENT OF JOHN ATKINS, PRESIDENT, GLOBAL CONTAINERS TERMINAL
Mr. ATKINS. Thank you, Mr. Chairman. Good morning. And I
want to thank the committee for coming to GCT New York for its
meeting. We are all here today because trade is all our
livelihood.
My name is John Atkins. I have worked in the marine cargo
handling industry, which is reliant on the trading
relationships of the United States, for 38 years, president of
GCT USA, which operates two Green Marine-certified terminals,
both here in Bayonne and also at our site here in New York.
I am also chairman of the Sustainable Terminal Services. It
is a nonprofit corporation composed of the six container
terminal operators in the Port of New York and New Jersey whose
primary purpose is to promote environmentally sensitive,
efficient, and secure marine terminal operations in the port.
While we are all competitors, we put the competitive spirit
aside to focus on collective projects that have been
implemented for the betterment of the port as a whole.
These projects focus on environmental issues, both physical
and cybersecurity, and supply chain fluidity through
information sharing. The containment terminal operators can
only work together to pursue these port-wide goals through the
authorities granted through a discussion agreement filed with
and approved by the Federal Maritime Commission. This
discussion agreement provides limited antitrust immunity for
discussions of this nature among the marine terminal operators.
This arrangement is under attack, and we urge your support
to preserve this tool that allows marine terminal operators to
act together for the collective good.
The businesses and labor serving this port have always
stepped up in performing the functions that are vital to the
regional and national economy, as well as the well-being of all
Americans.
I am particularly proud of the performance of management
and longshore workers during the challenges of the COVID-19
pandemic. In uncertain times, they came to work every day and
kept the cargo flowing.
This was not easy, but in cooperation with the ILA, the
marine terminal operators in the port were able to implement
reasonable work rules and sanitizing procedures that permitted
work to go on in a responsible manner.
These workers are the unsung heroes of the pandemic.
Because of these workers, the Nation was able to obtain PPE and
supplies needed to permit people to go to stores and other
places of business to get the economy moving.
Collectively, the marine terminal operators in the Port of
New York and New Jersey have invested billions of dollars in
facility improvements and equipment to efficiently handle
current and enhanced cargo volumes.
In 2022, in the port, we efficiently handled cargo volumes,
9.5 million TEUs, that had not been anticipated to occur until
2030.
However, the story of our significant investment and
dedication to the work are not what you have read about in the
news. In general, media coverage has done our industry a great
disservice, and our industry fears that this misrepresentation
may be fueling hasty governmental regulation which, while
considered with good intentions, may have unforeseen and
harmful consequences.
The media reporting on the 2022 supply chain crisis often
used venues like you see here today as visuals in their news
accounts.
This reporting has been harmful to the industry because it
gave legislators and the public the mistaken impression that
the crisis was caused by ocean carriers transporting goods and
marine terminal operators, like the one here today, that
offload the cargo from these vessels and transfer it to truck
and rail to its final destination.
This mistaken impression also brought forth the ire of the
White House, which resulted in hastily enacted legislation that
will not prevent but may encourage the next supply chain
crisis.
The Ocean Shipping Reform Act, or as we term OSRA, and the
insuring regulations of the FMC, have sought to lay the blame
for supply chain challenges on ocean carriers and MTOs. This
regulatory activity places undue burdens on carriers and MTOs
for the failure of shippers and other cargo interests to
receive their cargo in a timely manner.
It is an undisputed fact that domestic marine terminals
have limited space. The efficient operations of a marine
terminal are based on principles of velocity and fluidity.
Impediments to fluidity are long container dwell times.
During the 2022 supply chain crises, cargo interests allowed
their containers to languish at our facilities causing logjams
in the system. Our marine terminals were used as long-term
storage alternatives to off-terminal container depots and
warehouse facilities.
Now the regulators are placing the burden on MTOs to bear
the cost for such long dwell containers. That is against the
incentive principle that the FMC is supposed to espouse in
ensuring that cargo moves efficiently through marine terminals.
The longer container dwell on the terminal, the longer it takes
to service the trucks that drop them off and pick them up.
However, pending FMC regulations do not enumerate
procedures for the FMC to assess whether the cargo interest
was, in fact, verifiably ready and able with a truck driver, a
chassis, and a destination to bring the container before a
container can be retrieved. Instead, they place the sole burden
on ocean carriers and marine terminal operators for the
inefficiencies in the inland components of the supply chain.
Another issue of critical importance to the Port of New
York and New Jersey is dredging, which includes having a
reliable source of funding for critical dredging projects. The
port is dependent on a consistent program of maintenance and
deepening dredging projects.
The Port of New York and New Jersey, in dredging parlance,
is referred to as a donor port to the Harbor Maintenance Trust
Fund. That means the fees generated by cargo operations here
significantly outweigh the moneys that are allocated to the
port here in New York for vital dredging projects.
As this port has done since the beginning of our Nation, as
Nicole has pointed out, it continues to be one of the largest
contributors to this Nation's ability to maintain the waterways
for the common good.
The Port of New York and New Jersey is having issues with
obtaining the funds that were supposed to be authorized for its
piles and fender dredging project under WRDA 2020. The port
should have been slated to get $56 million for this maintenance
dredging with escalations up to $70 million. However, the port
was only authorized for $6.1 million for this purpose because
of differences between what was negotiated and what was
appropriated under WRDA.
We need your help. If not corrected, the port will take a
$350 million hit on dredging funds that should be authorized
for this port.
We understand that the problem is expanding the use for
Harbor Maintenance Trust Fund to secondary sources like locks
and levees and beach refurbishment. However, this is against
the principle that harbor maintenance fees generated in ports
should inure to the benefit of those ports.
Please help the port maintain its position as an economic
engine for this region and the Nation and release money being
held in the Harbor Maintenance Trust Fund.
As stated, the domestic marine cargo handling industry is
dependent on this country's trade with other nations. We
understand that this is a complex issue with certain nations
acting in a belligerent manner towards the United States.
However, the foreign and trade policy of the United States
must be mindful of the quandary that it places the domestic
cargo handling industry, particularly as it pertains to issues
related to sustainability.
This is another area that is of great significance to
marine terminal operators, which is also directly related to
the work of your committee. We all want to be good stewards of
the environment and operate in a manner that has the least
possible negative impact on the environment. However, obtaining
new equipment from container gantry cranes, as you see behind
you, to yard hostlers is a challenge for marine terminal
operators.
While most of our container cranes are now electrified,
operators are in the process of seeking to replace cargo-
handling equipment, including rubber tire gantry cranes, top
loaders, reach stackers, with low-emission or zero-emission
equipment.
Chairman SMITH. Mr. Atkins.
Mr. ATKINS. Yes.
Chairman SMITH. We are at 4 minutes over. So, can we submit
the rest of your testimony into the record?
Mr. ATKINS. Yes.
Chairman SMITH. Because I want to make sure I am as fair to
all of the folks.
Mr. ATKINS. Okay.
Chairman SMITH. But we appreciate you hosting us.
Mr. ATKINS. Absolutely. Thank you.
[The statement of Mr. Atkins follows:]
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Chairman SMITH. Mr. Hemminger, would you please proceed?
STATEMENT OF DALE HEMMINGER, OWNER/OPERATOR, HEMDALE FARMS
DAIRY AND GREENHOUSES
Mr. HEMMINGER. Hemdale Farms and Greenhouses produces milk
for the Upstate Milk Cooperative. We are one of the owners and
the only supplier of fresh milk for Wegmans Food Markets. They
are very fussy. We also grow transplants to start vegetables
for ourselves and 20 other farms.
And then we grow a lot of cabbage. We have cabbage year-
round. We ship 50 loads a week with a neighboring farm July
through November and then about 10 loads a week November
through June to fussy buyers that want our dense, crisp cabbage
out of storage.
Back home, my son and a great team of dedicated,
hardworking employees are running a 1,500-cow high-tech dairy,
as well as a greenhouse business that starts vegetables for
transplants, 3,000 acres of crops, including fresh vegetables.
I am proud to say that, besides myself, we have five of our key
six managers that are partners, owners.
International trade is of critical importance to our
business. For the dairy industry, nearly 1 in 5 gallons of milk
gets exported as a dairy product. This value is $10 billion a
year. In the last 10 years, dairy exports have increased 52
percent by volume and 85 percent by dollars.
Thirty years ago, my farm was primarily a processing
vegetable farm, and we had an outdated, older, 100-cow dairy
that my father had planned to sell off. Instead, I went to the
bank and borrowed the money to expand to 300 cows, and that
barn is still an important part of our operation today.
At that time, the Canadian dairy market was scheduled to
open under the original NAFTA agreement. It was actually a
factor in my decision to expand my dairy.
Over the last 30 years, the Canadian dairy industry has
masterly outsmarted numerous trade agreements keeping their
markets mostly closed to U.S. products. I am just 90 miles from
the bridge to get into Canada, and just a little bit past that
is Toronto, big population.
Currently, I compete to sell large volumes of both
vegetable transplants, and fresh vegetables with the same
production grown in Canada. The primary supplier of fresh
vegetable plants in the Northeast is Canadian greenhouses. I am
one of the few larger-sized greenhouses that have tried to be
as competitive with them because of all the opportunities they
have.
Canadians' subsidies, including trucking for export
subsidies, investments grants, and government-controlled, low-
cost inputs like energy make them more competitive.
I respect my Canadian greenhouse competitors. We make each
other better. Now Canada must let us send our dairy products
and vegetables back to the same open borders.
On the input side of our business, last year was the
craziest year of my 45-year career, led by fertilizer prices
that were up 100 to 300 percent and fuel prices that were up 70
to 100 percent.
Today, fertilizer has settled back to an average of 70 to
80 percent higher than 2021. It hasn't settled back further, my
supplier tells me, because Russia and China are internally
restricting exports, keeping supplies tight worldwide, and,
hence, prices historically high. Fuel prices are back to a more
traditional range.
Almost all other costs are higher, including machinery,
repair parts, and some supplies. Moving forward, our biggest
challenge to remain competitive is labor.
Our first labor challenge is the Federal H-2A program that
I have participated in since its inception 15 years ago. The
current administration has led the U.S. Department of Labor to
be out of control with regulations, fees, and base wage
requirements.
Canada and Mexico are increasing production knowing they
can produce many products cheaper than those of us in the
United States trying to do that with these labor costs.
My second labor issue is New York's new labor laws and
regulations that are making our costs much higher than
neighboring States and Canada. In 2023, when I pay the New York
State mandated overtime for agriculture that was new 2 years
ago, the Federal H-2A hourly rate of $16.95 an hour, when I pay
overtime on those dollars, my labor costs will be double what
Canada pays with no overtime mandated.
Last Friday, during a statewide meeting of Farm Bureau
leaders reviewing the new labor regulations that were just
enacted with the new New York State budget, an apple farmer
that I have great respect for said he and his neighbors were
organizing to entertainment solar project development on their
farm acreage. This is on some of the best fruit acreage in the
world. Picture the beautiful land that borders Lake Ontario in
western New York being converted from apple trees to solar
panels.
At Hemdale Farms we are focused on soil-based solutions.
Thirty years ago, my primary focus was growing vegetables for
processing for Birdseye Foods. A combination of the
consolidation of the industry and the high cost of doing
business in New York State forced Birdseye to sell all of its
processing plants, and today they are importing a considerable
amount of their products from countries with much lower costs.
I share this because at that time Birdseye asked me to
transition some acreage to organic so they could do test
marketing. The Birdseye markets didn't develop, but we
established numerous markets for both vegetables and grain and
were successful organic growers for 15 years.
Eventually, my operations manager/partner, who is a self-
trained soil health expert, and I decided to discontinue
organic production because of ongoing challenges maintaining
the land and controlling weeds and establishing seed growth
with excess tillage.
We also wanted to be able to consider GMO use in all of our
enterprises. My lifetime of experience has me convinced that
GMOs are the most important scientific breakthrough in history
for the future of feeding a hungry world of 8 billion people.
I will wrap this up saying that Hemdale Farms is up to the
challenge of competing in global markets. We will continue to
move forward with an entrepreneurial spirit finding our niches
to succeed. However, we must have a level playing field with
open markets and cost structure where we can be competitive
with both our income and expenses.
If this is not the case, I owe it to my family and my
community to change my focus and possibly my location. Money
goes where money can be made.
Chairman Smith and committee members, I commend you for
convening this hearing on behalf of agriculture and small
business across the country.
Thank you.
[The statement of Mr. Hemminger follows:]
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Chairman SMITH. Thank you, sir.
Mr. Turkel, you are recognized.
STATEMENT OF NURY TURKEL, CHAIR, UNITED STATES INTERNATIONAL
RELIGIOUS FREEDOM
Mr. TURKEL. Thank you very much, Chairman Smith, Ranking
Member Neal, and honorable members of the committee. I am
honored to be here with you today to testify on key red flags
in our trade relationship with China.
In 2019, as leaked documents showed, the Xinjiang
government supercharged its policy to put all Uyghurs in a
mandatory work placement. To be clear, it is a state policy
that all Uyghurs must be in forced labor. Acting on forced
labor imports is a moral imperative as the Uyghur genocide has
entered its seventh year.
American consumers are increasingly aware that our
proclaimed national values are not aligning with U.S. corporate
interests abroad. Ignoring modern day slavery is morally
unacceptable. It compromises the soul of our Nation and sets a
malign precedent globally.
I was born in a reeducation camp where my mother was sent
to at the height of China's infamous Cultural Revolution. My
father had been sent to a separate forced labor camp. I grew up
witnessing Uyghur villagers forced to build irrigation systems
and pick cotton. Uyghur forced labor is not a new problem.
The return of reeducation camps and forced labor to an
industrial scale is a morally abhorrent practice that demands a
response backed by political will.
The Chinese Government is using forced labor to break up
Uyghur families and send them to work in factories thousands of
miles away from home. These Uyghurs are prisoners of the state,
and their labor is being used to make products for domestic and
international markets.
Uyghurs are suffering under the state plan targeting ethno-
religious groups for industrial forced labor on a scale not
seen since the Holocaust era. Forced labor is driving the near
complete erasure of Uyghur people within a generation. This
practice is at the profit-making center of atrocity crimes.
I am sure you can imagine the psychological impact on me,
as a proud American, to know that my country is profiting from
the Uyghur forced labor. Knowing that my own dollars might be
spent on goods produced with the slavery of my own friends and
people is a sick and cruel reality.
The problem is not going to disappear or even be minimized.
As China becomes more hostile to foreign businesses and as the
means of concealing the origin of goods continue to evolve,
effective enforcement from the relevant authorities will be
essential to protect our Nation's economic interests. Forced
labor transfers within China and beyond will likewise
necessitate closer scrutiny. And American workers are at a
disadvantage when competing with countries that use forced
labor.
Let's be clear, forced labor is the profit-making dimension
of an ongoing genocide. Business complicity must be taken
completely off the table.
Modern day state-imposed slave labor in China is America's
number one source of imports. The existing laws must be fully
enforced and even amended to ensure that the American people
are not unwittingly complicit in powering a genocide with their
dollars.
In closing, I would like to make the following
recommendations.
First, this committee should conduct robust oversight
hearings on the implementation of the UFLPA.
Second, Congress should continue to increase funding for
UFLPA enforcement.
Third, this committee should examine the composition and
role of the Commercial Customs Operations Advisory Committee,
COAC, which heavily favors the importer community while
excluding domestic producers and American workers.
Fourth, Congress should pass robust and enforceable
country-of-origin labeling rules.
Fifth, Congress should pass new legislation modeled on the
Foreign Corrupt Practices Act to address business complicity in
state-imposed forced labor, human trafficking, war crimes, and
other serious human rights atrocities.
Sixth, Congress should amend the Securities Exchange Act of
1934 to address the corrupt practices of foreign adversaries.
Seventh, Congress should pass legislation prohibiting
access to U.S. capital markets by malign foreign adversary
companies that are under U.S. sanctions for human rights or
national security reasons.
Eighth, Congress should pass a TSP Fiduciary Security Act
to update the fiduciary duty of the Federal Retirement Thrift
Investment Board.
Finally, Congress should pass the Turn OFF THE TAP Act to
create a central ban on Federal funds going to foreign firms
explicitly identified through U.S. Government blacklists.
Thank you very much for the opportunity. I look forward to
your questions.
[The statement of Mr. Turkel follows:]
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Chairman SMITH. Thank you, sir.
Mr. Romano.
STATEMENT OF JOHN ROMANO, CEO, TRONOX
Mr. ROMANO. Good morning, Chairman, Ranking Member, and
members. Today, I would like to discuss the negative impact of
trade practices on the titanium dioxide industry.
I serve as the co-CEO of Tronox Holdings, the world's
leading vertically integrated producer of titanium dioxide,
also known as TiO2.
Our product is a base pigment that can be found in
virtually all paints and coatings applications, such as
architectural, industrial, automotive, aerospace, and military
applications.
It is also a key pigment that adds whiteness and opacity to
many plastics products and is critical to nearly everything
that is manufactured in this country.
We operate the world's fifth-largest production facility of
TiO2 in Hamilton, Mississippi, and in Oklahoma City we operate
a world-class R&D center.
As a vertically integrated producer, we mine titanium-
bearing ores at our five mines in South Africa and Australia,
and we upgrade that ore to high-grade feedstock and ship it to
our nine TiO2 facilities around the world.
Our mines also produce valuable co-products, including the
types of rare earth minerals that have been identified as
critical minerals under Executive Order 13817 and 14017.
Tronox is now considering using its existing mineral
resources in South Africa and Australia as a feedstock for rare
earth processing at a plant in Hamilton, Mississippi, to supply
U.S.-based customers and potentially the U.S. Government.
The threat from China is clear, both to our core TiO2
business as well as any plans as we may have to move into the
rare earth mineral space. While China accounted for 36 percent
of the global TiO2 production a decade ago, today it accounts
for 52 percent. And China's attempts to dominate the global
supply of TiO2 are continuing to evolve.
Based on our analysis of announced new plants, China's
production could account for 70 percent of the global demand by
2030, with growth in Chinese production far exceeding growth in
global demand.
At a recent conference, one of the largest Chinese
producers of TiO2 predicted that its company's growth would
result in the removal of Western capacity suppliers. In other
words, we are seeing the classic Chinese playbook of creating
enormous overcapacity to harm foreign competitors.
The Chinese have also sought to appropriate U.S. TiO2
technologies through criminal means. In 2014, a Federal jury in
San Francisco found two individuals and one state-owned entity
guilty of economic espionage and theft of TiO2 trade secrets.
Many Chinese producers are either part or are wholly state
owned, and there is discriminatory application of bankruptcy
laws, which keeps failing firms propped up, preventing them
from shutting down the unprofitable producers.
In our African mining activities, we see a sharp contrast
between Tronox and how the Chinese mine titanium-bearing ores.
In South Africa, we employ approximately 2,200 individuals
where we mine ore and we operate sophisticated mineral
separation and smelting operations which produce high-quality
titanium feedstock and pig iron, much of which is shipped to
the United States.
Our mine closure plans are world class, requiring the
restoration of the local area's natural flora and fauna.
China's exploitation of Africa's titanium mineral resources is
far different.
As China exhausts its own titanium resources, it has turned
increasingly to Mozambique, where it exports huge quantities of
unprocessed ore to China for mineral separation and upgrading.
Not only are its mining practices far less sustainable than
ours, but it lacks the in-country processing, which deprives
local communities of employment and development opportunities.
One of the primary reasons the United States TiO2 industry
remains strong is attributable to decisive action taken by USTR
under Section 301.
Since the initiation of Section 301, U.S. TiO2 production
has decreased by less than 10 percent and imports of Chinese
material have halved, if you compare that in contrast to the
European Union where capacity has been reduced by 22 percent
and exports of Chinese material into the EU have increased 82
percent.
USTR's Section 301 action has enabled U.S. producers like
Tronox to remain viable. This in turn has generated enormous
benefits for the local communities where we operate, enabling
Tronox to consider investments in adjacent industries like rare
earth minerals.
Tronox continues to invest heavily to remain competitive,
but we are concerned that with a significant increase of
Chinese TiO2 capacity current Section 301 tariffs may not be
enough to prevent uneven playing fields in the U.S. markets.
In closing, I would ask that as part of the 4-year review
of actions under Section 301, USTR consider whether current
tariff levels are sufficient to avoid injury to our industry.
Thank you for your time.
[The statement of Mr. Romano follows:]
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Chairman SMITH. Thank you, sir.
Mr. O'Shei.
STATEMENT OF THOMAS O'SHEI, PRESIDENT STEELWORKERS LOCAL 135
Mr. O'SHEI. Chairman Smith and Ranking Member Neal and all
members of the committee, thank you for the opportunity to
testify today.
My name is Tom O'Shei, and I am the president of United
Steelworkers Local 135L, which represents workers at the
Sumitomo tire plant in Buffalo, New York.
Our plant employs over 1,400 people, including 1,100
members of the United Steelworkers. I have worked at the plant
for 33 years now, mostly building tires.
We build a wide range of tires, from motorcycle to
passenger vehicle tires. We also export to Europe. We are
looking to add tire capacity that will allow our location to
build up to 17,500 tires per day.
I can sit before you today talking about expansion and tell
you that I recently posted on my Facebook page about job
openings at the plant that start at $25.33 an hour with
excellent benefits, not just because of our union contract, but
also because the United Steelworkers fought against illegally
dumped and subsidized imports.
For the last 14 years, the union has used every tool in the
toolbox to defend a domestic industry which has manufacturing
facilities in 19 States and employs nearly 100,000 workers.
Since the United Steelworkers has significant density in
the tire industry, we are able to file trade cases without
employers. Since many tire manufacturers in the U.S. are global
manufacturers, there is a hesitancy in filing trade cases
because of potential retaliation. But for the union, this is
about our jobs and a level playing field.
The union filed the only successful 421 petition against
China in 2009, that lasted until 2012, on passenger vehicle and
light truck tires.
Then, in 2014, the union filed an anti-dumping and
countervailing duty case because when the 421-relief expired,
Chinese producers flooded the U.S. market with imports going
from about 24 million units to more than 50 million.
The reason for the gap between 2012 and our trade case
filing in 2014 is because our trade laws require showing 3
years of harm before we can win at the ITC.
We won that PVLT tire case in 2015, which continues today.
The union later won a trade case on bus and truck tires from
China in 2017 and joined Titan Tire in winning trade cases for
Off-the-Road tires as well. Finally, in 2021, the union won a
follow-on case against four countries on PVLT tires.
All told, there have been 12 cases that have led to duties
on six different countries.
Millions of dollars and thousands of hours have been spent
defending American workers because we believe in fair trade.
However, Congress could do more to ensure a level playing
field.
First, after 12 trade cases won against six countries, what
more evidence does Congress need to see that tire products are
an import-sensitive commodity? Congress should add tires to the
GSP import sensitive list. We should not unilaterally drop
tariffs on tires when, for example, a Chinese tire company
invested nearly a billion dollars into a GSP country which
could come here tariff free.
We need to make it easier to address third country
subsidies, like China's Belt and Road Initiative. We need to
recognize that global companies can quickly shift dumping from
one country to another, undermining U.S. manufacturing jobs.
Congress could help this by passing bills like the Level the
Playing Field Act 2.0 introduced last Congress by
Representatives Terri Sewell and Bill Johnson.
Second, workers negatively impacted by trade should have
access to training programs like Trade Adjustment Assistance.
Finally, we should not impose budget cuts on the agencies
that enforce our trade laws. Unfortunately, recent House-passed
legislation would decrease the budgets of agencies which
enforce our trade laws by over $60 million. Millions of workers
rely on our government to accurately review trade cases, and
Federal budget cuts will lead to lost manufacturing jobs.
My written testimony includes more examples of policy tools
that could make American jobs more competitive in a global
marketplace.
Thank you for your time today, and I look forward to
answering any questions you may have.
[The statement of Mr. O'Shei follows:]
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Chairman SMITH. I want to thank you all for your excellent
testimony, and we will now proceed to the question-and-answer
session, and I will begin first.
Mr. Turkel, America has led the world by banning the import
of products made with forced labor. I was proud to vote in 2015
to update our forced labor import ban and again in 2021 to pass
the Uyghur Forced Labor Prevention Act to address the
unprecedented scale of the Chinese Communist Party's systematic
use of forced labor. And, yet, there are credible reports of
products made with forced labor still entering the United
States.
What more can we do through our trade policies to shine a
light on China's human rights abuses and crack down on products
manufactured from forced labor entering the U.S.?
Mr. TURKEL. Mr. Chairman, thank you very much for the
question.
We can do a number of things to address that concern.
First of all, we have to look into the country-of-origin
concern. The law, the UFLPA, specifically focuses on the Uyghur
region that is formally known as Xinjiang.
But we do also know that there have been instances that the
Chinese Government supported entities making the product
without labeling and taking to the inland and then exporting to
go another country and making it into the United States. That
includes Mexico and Canada.
So, we need to close the loophole, starting with addressing
the country-of-origin concern, making a new rule.
And then, two, we have to work with our partners and allies
to encourage them to put in place a similar type of legislative
mandate.
And Europe is about to become a dumping ground for forced
labor-purchased products. Italy, during the period of 2019
through 2020, increased its import volume from Xinjiang almost
by 200 percent.
So, Europe needs to catch up. So do our Asian allies Japan,
Australia.
And then, finally, we have to continue to increase the
enforcement mechanism in the United States with additional
resources and tools. I know that Congress approved $70 million
for enforcement. We have to continue to add funding so that our
CBP colleagues can do their job.
And, finally, I would look into the possibility of amending
the UFLPA to make it applicable to the entire country of China.
That one geographical area has been focused, but we may end up
seeing human trafficking, internal migration.
Chairman SMITH. Thank you.
Mr. Romano, as you know, President Trump imposed tariffs on
China because of its unfair trade practices under Section 301
of the 1974 Trade Act. And President Biden has kept these
tariffs in place so far, although his administration is
currently conducting a 4-year review of the tariffs and may
make changes as a result of that review.
As a company that has had to deal directly with China's
unfair trade practices, can you speak to the relationship
between these tariffs and the protection of American production
and jobs?
Mr. ROMANO. Thank you, Chairman.
Yes. So, I have been with the company that I am working for
now for 35 years, and we have historically seen plants close
due to Chinese imports.
So, we had a plant in Savannah, Georgia, that closed in
2004, and the other half of that plant closed in 2007, and it
was directly related to Chinese imports for, I would say, a
lower grade of TiO2 that was sold into the paper industry.
We are not the only company that closed production. There
was another facility in Delaware that closed for that.
So how have the import of those 301 tariffs impacted us
since then? There hasn't been any capacity actually eliminated
since the trade barriers were put in place, the tariffs on
TiO2, and it has actually allowed us to expand our facility in
Hamilton, Mississippi.
We have spent $135 million, a 15 percent increase in
capital spend since those tariffs were put into place. We have
a $15.5 million payroll at that facility with 450 employees,
about 120 to 150 contractors working at that facility every day
as well.
So, it is not only helping us maintain our production
globally, but it is also helping us maintain jobs. Many of our
employees have been with the company for many years. It is
generations.
I said I have been with this company for 35 years. There
has been somebody in my family that has worked for this company
for 72 years.
So, the U.S. is a big part of what we do. That Hamilton
facility that we have in Mississippi is our crown jewel. And we
are looking at opportunities now to try to see how we might be
able to expand that business in the rare earth space and take
some of the resources we have out of South Africa and Australia
and bring them to the United States for upgrading.
Chairman SMITH. Thank you, sir.
Mr. Hemminger, trade enforcement is about making sure that
our partners provide the access to markets that they were
promised. Today, Canada is not meeting its obligations under
USMCA as it relates to American dairy exports.
If the U.S. fails to enforce obligations under our trade
agreements on dairy products or any other, what does that mean
for farmers such as yours or other businesses?
Mr. HEMMINGER. We just simply aren't going to be able to
continue to compete when it is a one-way street. We need a
level playing field. And the American public and people need to
realize that, generally speaking, we are either going to be
importing all our fruits or vegetables or we are going to stand
up for labor and equal opportunities for American farmers.
Right today, like I said, we can't ship our milk to Canada.
I expanded my dairy 30 years ago thinking that market would
open up. Yet, at Hunts Point right here in New York City, in
the Bronx, there is New York cabbage out of storage.
My first attachment is the Hunts Point report from Friday,
and on it, it shows a few products out of storage in Canada.
You look at this again, July through November, every single
product here will have a Canadian entry on it. At the same
time, my milk can't go to Canada. It is just common sense.
Chairman SMITH. Thank you, sir.
Mr. O'Shei, one quick question.
In your opening statement you made a comment about the
Chinese investing in a company in a GSP nation. What is that
country that you were referring to?
Mr. O'SHEI. They are very clever in circumventing our trade
laws. So, a question like that I have to think. And at this
point Serbia is the GSP country.
Chairman SMITH. Okay. Thank you very much.
I recognize the ranking member, Mr. Neal, for questions.
Mr. NEAL. Thank you for your informative testimony. The
common theme is pretty clear: enforcement. I mean, everybody is
nodding their heads in the affirmative as we say that.
Mr. O'Shei, in your testimony you demonstrate the
importance of enforcement of U.S. trade laws to protect
domestic workers and manufacturers against many of these unfair
practices of other countries; namely, China. We know that
without effective enforcement, trade liberalization measures
can have a detrimental effect on America's workers and
industries.
Could you talk briefly about how trade enforcement benefits
workers like those that you represent at the tire manufacturing
plant in Tonawanda, New York? And wouldn't the proposed budget
cuts that you referenced be of great harm to trade enforcement?
Mr. O'SHEI. Ranking Member Neal, thank you for the
question.
I believe they would. We could see before the 421 cases in
2009 that there were tire plants closing every year in the
United States. We could not compete with all the tires that
were being illegally dumped in the United States. In 2013, when
those expired, we started to feel it again.
But once that second trade case went through and was
properly enforced, rather than seeing tire plants shutting down
across the United States, you see them being built again in the
United States, employment going up, and offending countries
actually building plants in the United States, employing
American workers.
So that is a big impact for us. But we also have seen where
they would shift production to countries like Vietnam to avoid
tariffs or export tires to other countries and try and send
them to the United States tariff free.
So, it is a constant shell game they are playing. And
without the money for representatives to enforce our trade
laws, they will start getting away with that again.
Mr. NEAL. Thank you.
And a follow-up, Mr. O'Shei. The Trade Adjustment
Assistance Act for workers has provided workers adversely
affected by trade with opportunities to gain new skills and
credentials and the support needed to rebuild skills in future
jobs.
This is an ideal opportunity for community colleges across
the country to address those who because of trade economics
involved for dislocations an opportunity to get back into the
workforce with upgraded skills.
The program expired last year. We have been pushing very
hard on this side for the Department of Labor to begin the
process of putting together legislation that would come to the
assistance of those who have been unfairly impacted.
So, in the COMPETES Act, we were all in. We need to get our
other side here to enjoy the same enthusiasm we do as it
relates to trade adjustment assistance.
Can you reference how that has worked in your area?
Mr. O'SHEI. At our plant in 2010, we had a big layoff.
Truck and bus tires were under a lot of duress from Chinese
imports. We had a big layoff. The intent was to eventually shut
the plant down because we were under so much pressure from
those imports, and we didn't see a recovery coming.
We filed. Our members received TAA. Eventually, through
luck and hard work, we did return those workers to work after
over a year of layoff. But during that year, they had received
enhanced unemployment benefits, so they did not run out of
unemployment, which gave them the opportunity.
Many of our members had gone for welding certificates. We
had some members who had their first year of a nursing degree.
And you could see if we had not come back up without luck and
hard work, people were on their way to being able to at least
get decent employment after the plant would have closed.
Mr. NEAL. Mr. Chairman, the trade component to American
economic life once enjoyed great support. It is now severely
diminished. And much of it is because of the dislocated
workers, workforce across the country and some of the trade
practices that international competitors offer.
It is a really important part of our economic agenda. But
you can see the constituency for it in America has considerably
shrunk over the years, and I think that this is something
through enforcement that we can hope to change.
Chairman SMITH. Thank you, Ranking Member.
I recognize the gentlelady, Ms. Malliotakis.
Ms. MALLIOTAKIS. Thank you very much. Thank you all for
your testimony. This hearing is critically important because we
need to implement commonsense progrowth tax and trade policies
that will boost our economy, the businesses, like those here
today, and the American worker. I want to thank the
International Longshoremen's Association for being present here
and the work that they do at this port; the Steelworkers
Worker's Union, thank you and your members, what they do; and,
of course, our Port Authority Police, who are here to keep our
ports safe.
Let me start with Mr. Atkins, while many industries were
eventually able to return to former habits post-pandemic, the
seaports continued to grapple with altered consumer patterns
and a shifting global supply crisis. How do seaports continue
to adapt to these supply chain patterns that have emerged post-
pandemic?
Mr. ATKINS. As everyone has noticed then on the way down to
the site here that we are pretty wide open at our facility
here. Our volume, year over year, is down about 42 percent at
this facility. If you look at what our volume is now over 2019,
we are down about 15 percent. So, what we are grappling with
here is the consumer reaction post-pandemic. Once the pandemic
hit and people were working from home, online purchasing went
up dramatically. The shippers and the folks that owned the
cargo that everybody goes online and buys flooded the shores
with material that we saw here. That added to the congestion
that we saw going through all the ports and all the facilities.
Now that things have returned back to whatever this new normal
is, a lot of the cargo owners that had rushed to ramping up
their supplies are now working down that inventory. So, we see
the decrease in numbers for, A, the inventory work-down that
you see. And, right now, the interest rates on mortgages and
that you see on any kind of consumer credit is impacting one of
the biggest purchasing areas, and that is home goods.
Furniture, by commodity, is the number one mover into the
country. And, with interest rates as high as they are for 30-
year mortgages, people are not looking to trade in their 2 or 3
percent mortgage into looking larger houses or build new
houses. So, if you look at the furniture and home goods sector,
that is down dramatically.
Ms. MALLIOTAKIS. You mentioned some of the causes of this,
say, freight recession.
Mr. ATKINS. Right.
Ms. MALLIOTAKIS. What are some of the policies that you
would like to see implemented that would help get this economy
back on track, maybe pausing the interest rates and better
trade policies to export more to build our GDP? What would you
say are some of the things that can help.
Mr. ATKINS. Well, any of the beneficial moves that can be
made to incentivize the export market will help not just the
American worker but will help the ports that we see here today.
And, overall, just the more--we are tied so tightly to
consumerism, that a healthier economy is what brings that
through. So, anything we can do to get more people employed
through the trade policies or whether it is enforcement,
anything that gets people to work, gets money into the economy
system.
Ms. MALLIOTAKIS. Great. How can we help streamline the
process and ensure that American businesses and workers have a
reliable system to prevent delays at the ports that hurt both
exporters and the port's bottom line?
Mr. ATKINS. Yeah. Well, actually, there are many
stakeholders in the supply chain that have to help with that.
It was the inland distribution that caused a lot of what we saw
during the pandemic in the supply chain crisis: Warehouses were
full. Distribution networks were full. So, we saw that cargo
back up into the ports. So, anything--when you look at these
large warehouse complexes, there just was not enough of them.
And, talking to our friends in the warehouse industry, there
are a lot of regions that it does take quite a bit of, I won't
say legislation, but maneuvering through the local ordinances
and county ordinances just to get more warehouses built to be
able to get more cargo and velocity moving.
Ms. MALLIOTAKIS. Well, thank you very much. The House
Republicans have put forward some great ideas on how we can
reignite our economy and get people back to work. Work
requirements for some public benefits. If they are able-bodied,
they can help stimulate the economy, work, produce. And I think
that would help resolve some of your problems if we also do
that in conjunction with smart pro-growth tax and trade policy,
which we hope to work in a bipartisan manner. Thank you very
much.
Mr. ATKINS. Yes.
Chairman SMITH. Thank you.
Mr. Buchanan is recognized.
Mr. BUCHANAN. Thank you, Mr. Chairman. I want to thank all
of our witnesses. I just know--I grew up as a blue-collar kid.
I have been in business 30 years before I got here. We have got
to come together. The time is now. And what I mean by now, I
mean business and unions--my parents were union workers all
their life--we have good-paying benefits here. I mean, we are
talking about we were sharing 150,000 in terms of all in. That
is great benefits. And we can have the governance come in and
make a difference. So, I just want to say that I know we can. I
have been to 80 countries in the world. I have done business
abroad. We have got the best and most able people, but we need
a shared vision. We need a shared plan, and we need to work
together to make it happen and leave nobody behind. So, I just
want to get that out of the way because I feel very strong
about it.
International trade, obviously, is critical. I will just
say, I have got a seaport in Florida, Tampa Bay area. It is
actually in Manatee County. We are up 35 percent. I am not
saying because of one reason or another, but I was looking at
the numbers, and we are up 35 percent.
Ports in Florida, we have 15, and 1 in 5 jobs is trade-
related in terms of Florida. 107--you know what this number
means better than I do--but 107 million tons of cargo was moved
last year in Florida. And so that has come up, and I know some
people get tired of hearing about Florida. I am from Detroit
originally. But my point is, is that they are moving in the
right direction. We are going to have a delegation meeting,
Greg, and myself, and others, to meet with all our ports in the
very near future. We are going to talk about, what more can we
do? What more can we do to help? Because these are good-paying
jobs, and it is very important.
The other thing I just want to say in terms of FTAs, the
free trade agreements, we need to find a way we can work
together. USMCA, I felt was a good blueprint that we came
together on. We had 380 votes. So, we have got to make sure
that we are doing that. I think in terms of U.K., the EU, if
you want to deal--it is just my opinion; I am not an expert--
but if you want to deal with China, you have got to work to
find a way to work with the EU. That seems like we have a lot
of shared values. They get good benefits, get the month of
August off from work. So, they have got some really good
positive things. We have got to find a way. If we can come
together, I think that will make a big difference in terms of
having an ally.
Let me share this with you, is that a lot of people--you
know it, but maybe you haven't thought about it--but I was on a
trip this week, and someone brought up, we have got 8 billion
people on the planet now. So, let's say the United States is
350 million, but 8 billion, that is a lot of opportunity. And
we have got to make sure we get our fair share. But we do, as
someone mentioned, you know--a lot of them don't play the game
right. We will talk about that in a minute--but USTA, Bob
Lighthizer, and Richie knows, we worked together, and we got
that. We got 380 votes out of there. We need to go to work and
make some differences.
The other thing I will just tell you--someone said about
free trade--I am a free trader, but it needs to be fair. And I
personally feel like we have been played. And I am a
Republican. So let me just tell you that. I just feel strongly
about that. Obviously, with China, we have been played for a
lot of years. And I will say we got other good friends, even
the Japanese--and I do business with the Japanese over the
years--but we have been played there as well. At the end of the
day, it needs to be somewhat fair. However you want to look at
that. So that is just my strong feelings about that.
I just got off yesterday, the plane at 4 o'clock on a
CODEL, and we met with Korea, Indonesia, Jakarta, Poland, and
north--one of the countries north--Moldova--so, anyway, we met
with four or five different countries. And the bottom line is,
is that all of them are very enthused about us. We need to be
engaged. We need to be working together, and a lot of them were
business groups that we met with--not all of them, but usually
the receptions at night were business groups. And we had a lot
of good dialogue, and they realized that they are--that our
embassies were there. American businesspeople were there, and
they are making some progress, but they need more help because
what they do better, in a sense that way, it also helps us out
as well.
John, I wanted to mention, Mr. Atkins, a little bit, you
said your business is down 42 percent. What is creating that
because I really do want to better understand that? Is that the
market? I don't think it is all the market. There are probably
other factors, but I think we need to know what those other
factors are so we could be helpful.
Mr. ATKINS. It is partially driven by the trade lanes that
you service at your individual terminal. The ones that we have
here with Far East trade, with China being so far off with
reduction in consumer purchasing here. It probably took or did
take a more drastic hit than some of the other facilities that
have more diversified services. Let's say Transatlantic or
South America trade lanes. They tend to be more resilient
because out of South America, you are bringing fruits,
vegetables, food stuff, those type commodities. So, this
facility that we are in today suffered more than probably the
other ones in the harbor based on the services that it has.
Mr. BUCHANAN. Well, as you have been asked, let's figure
out how we can be helpful.
Mr. ATKINS. Yes.
Mr. BUCHANAN. Mr. Turkel, let me ask you, as it relates to
intellectual properties, IP, 30 years ago, I was in Beijing
with a group of businesspeople, and that was biggest issue back
then. And I don't think it has got a lot better today with the
Chinese in terms of intellectual properties. What are your
thoughts about, how can we turn that around and get that where
it makes more sense, or can we?
Mr. TURKEL. Congressman, thank you for the question. I
think we have to acknowledge something important, and our
policymakers not being straightforward with American people
that what we are dealing is a regime----
Mr. BUCHANAN. Can you speak into the mike a little bit
more.
Mr. TURKEL. What we are dealing here is a regime that
enslaves its own population; subsidizes key industries, making
it impossible for American companies to compete fairly; and
also steal our technology. This is one of their methods; been
ongoing for a long, long time.
So, I know it is a very complicated question, but this is
something that I have been advocating that the United States
Government that needs to go hard, tough in its dealing with the
Chinese regime.
Mr. BUCHANAN. Okay.
Mr. Romano, let me ask you. You talked about minerals. I
was just in Jakarta, Indonesia. I met with the President,
myself, Members of Congress. They have got a lot of minerals,
things that we need. People are very active and engaged there.
Of course, the Chinese are at the front of the line, but we
have got to find a way. They don't want to--they have got to do
some business, like all those countries do, with the Chinese,
but they don't trust them, don't want to work with them if they
don't have to. But they have made it very clear, we need to be
here. And, of course, when we go down looking down the road in
terms of EV vehicles and everything else, they have a lot of
those minerals there.
What is your thought on what we need to be doing?
Mr. ROMANO. Yeah, so we are a large miner. We have five
mines in Australia and South Africa. So those minerals also
contain rare earths. And historically what we have done with
those rare earth minerals is ship them as tailings to China,
and they have updated those into rare earth oxides and
ultimately into magnets. So, we are now looking at exporting
that material to the U.S., to our facility in Hamilton,
Mississippi, so that we can actually----
Chairman Smith. We are going to have--you are way over
time.
Mr. BUCHANAN. I didn't see the light there.
Chairman SMITH. Thank you.
Mr. Blumenauer.
Mr. BLUMENAUER. Thank you, Mr. Chairman, and for your
patience and bringing us together. There is one area that I
think this committee ought to be able to get their arms
around--and I appreciate Mr. Turkel and Mr. O'Shei, talking
specifically about the de minimis loophole.
Mr. Turkel, you talk about how this is used to allow goods
used by forced labor to come to the country--you have excellent
testimony. You didn't have a chance to speak to it in just your
5 minutes. But I would commend the committee to look at Mr.
Turkel's page 10 and 11 about abuses here and the impact by
allowing over 2 million packages a day--un-inspected, un-
tariffed--to flow into the United States.
Mr. Turkel, do you want to talk about what you might have
added if you had time for your testimony?
Mr. TURKEL. Yes, I would like to point out that this is a
serious problem. For example, one-half were shipped with zero
digital data provided to U.S. Customs authorities.
Mr. BLUMENAUER. Could you speak a little bit closer into
the microphone. It is hard to hear you.
Mr. TURKEL. Yes. One quarter of those flagged for
inspection were never inspected because the importer failed to
comply with the order to hold items for inspection. And then
one quarter of those inspected--I am talking about de minimis,
those 2 million packages coming through to the United States--
one quarter of those inspected at JFK airport had some type of
violations. So, we need to look at why we have this loophole
continued.
One company that had been in the question is the Shein.
That is fastest--that, what, the most successful Chinese
company, even though their headquarter is in Singapore. The
download of this app has surpassed already TikTok, Instagram,
Twitter. So, this shows that this is one of the most effective
tools that the Chinese entities is using by taking advantage of
the de minimis rule.
We need to consider looking at the possibility of changing
the dollar amount. You mentioned--I mentioned 2 million, but
yesterday I was looking at other records. One of the world's
foremost experts on this issue, Dr. Laura Murphy testified in
Congress. She said 3 million. So that is the daily package
coming in into the United States. That is a big loophole that
we need to close.
Mr. BLUMENAUER. I appreciate that very much. I do hope that
there is an opportunity for the committee to look at this huge
volume of un-inspected. I mean, we are here in New York, the
home of exploding electric bike batteries. There are $800--or
excuse me, $799 E-bikes coming through under this loophole. And
I just think it is a simple fix. It would be broadly supported
on a bipartisan basis, and it is not just clothing.
Mr. O'Shei, you mentioned the potential use of the de
minimis loophole in your testimony about tires, the possibility
perhaps of a company shipping tires direct to consumers four at
a time?
Mr. O'SHEI. Yeah, it only makes sense. They found every
loophole they could to get around our trade laws and trade
cases. And you could get a set of four tires shipped here less
than $800 and put them on the road, and they wouldn't be
following our Department of Transportation rules either. It is
another way of cheating our trade laws, and it is dangerous.
Mr. BLUMENAUER. Mr. Chairman, I will try and help you get
back on schedule here. I am not going to deal with your
patience. But I think this is something that the committee
needs to look at. We see companies use what is called creative
invoicing, that: If what the product you are getting actually
costs $800 or more, let us work with you, and we will find a
way to get that invoice under $800 for the un-inspected and un-
tariffed. These are dangerous. It undercuts American business.
There are actions of forced labor that come through using this
loophole. And I just urge the committee to look at the
testimony from our two witnesses that zero in on the de minimis
because I do think this is, you know--the legislation that I am
going to reintroduce would only exclude a nonmarket economy
that is on the watch list. And that is--let's see that is
China. And I think they should actually be excluded. It is a
small signal that we are not going to be overrun. But this
loophole is swallowing the exception in ways that are really
detrimental to American business and the safety of American
consumers. Thank you for your patience, Mr. Chairman.
Chairman SMITH. Thank you, Mr. Blumenauer. It appears that
that loophole is almost a $800 free trade agreement for China
for any products underneath that. That is what it looks like to
me.
Mr. Smith is recognized.
Mr. SMITH of Nebraska. Thank you, Mr. Chairman.
Thank you to all of our witnesses, certainly, for unique
perspectives, but also expressing common concerns. And, as we
sit here, it is a very relevant place that we would be here at
a port as a Representative from Nebraska, the number one
agriculture district in the U.S. House, trade is important.
Getting products out of our country to other markets is
important and to do so reliably. And the reverse of that too.
We know it is important, whether it is fertilizer or other
products, be it for agriculture specifically or our economy in
general. So, we saw such difficulties during COVID that further
complicated what was already a problem.
Mr. Atkins, can you outline for us what you believe were
the specific chokepoints here at GCT in moving goods during
COVID and how you overcame them and then if you have any
insight into ways that we might be able to alleviate them in
the future.
Mr. ATKINS. Sure. Thank you, Representative Smith. Where we
saw the chokepoints were the long dwell times of the imports
that were coming off the ship. There were a few reasons that
that was created. Number one was some warehouses just did not
have enough space to bring the containers out and put the cargo
into the warehouse because they were full. Their parking lots
were full with other imported containers. So, they tended to
sit here and dwell at any of these facilities for longer than
average period of time.
There was also an issue with lack of chassis. Those are the
sets of wheels that detach from the container and actually
move. Where were all the chassis? They were tied up in the
parking lots of all the shippers with loads on them that they
could not unload them and get the empties back in time to
return the empty and pick up the next one.
So, it was a chassis issue. It was a space constraint
issue. And it really just backed up the pipeline into the ports
and went beyond that to the point that, for most of 2022, the
Port of New York had on average about 15 to 17 ships at
anchorage waiting to come in, and they could not come in and
discharge the goods because there were no room at the
facilities.
So now you see driving down here today time has somewhat
resolved that issue. You see not enough cargo coming in. There
is plenty of space now. There is plenty of chassis that are
available. So, it was working down inventories that has helped
that. And also, the purchasing volume has just gone down over
the pandemic time period.
Mr. SMITH of Nebraska. Thank you.
Mr. Romano, you have spoken about the vertical integration
at Tronox and the importance of raw materials in Africa and
Australia. Can you tell us about what you have seen regarding--
further tell us what you have seen regarding the Chinese
attempts to aggressively secure the raw material resources
globally so that they can control and exploit those?
Mr. ROMANO. Thank you for the question. So, yes,
historically you would have--so Australia--I mentioned we are a
big miner in Australia. And you get a lot of junior miners in
Australia that have historically not only mined but they have
upgraded that raw material. What you are seeing now is a lot of
these junior miners are getting interest from the Chinese. So,
they buy into these companies, get board seats, and, in many
instances, they are getting a hundred percent right--offtake
rights to material.
So, I mentioned Mozambique is another good example where
they are running out of titanium in China in the minerals that
they mine. So, in Mozambique, they go in there; they buy the
mining rights. They are taking the raw material in a form of
what is called heavy mineral concentrate. It is not upgraded.
Then they ship everything back to China to be upgraded and
processed.
For us as a miner, we have very strict rules on how we
actually have to take the mining work that we do and then put
the property that we mine on back to its normal--the way it
came, the natural flora and fauna. You know, that is a
significant disadvantage that we have; an advantage they have
because of the unfair practice that they are using by going and
exploiting other countries to get raw materials to send back to
China.
Mr. SMITH of Nebraska. Okay. Mr. Hemminger, just briefly in
the interest of time, can you perhaps reflect on the need for
enforceable trade agreements and maybe touching upon USMCA in
addressing Canada's dairy tariff rate quota system?
Mr. HEMMINGER. It seems like ``close the loophole'' seems
to be the common theme here today. That is certainly the case
there, I think. In my attachment no. 3 with my testimony, the
CEO of our milk co-op, Upstate Niagara Co-op, articulately
explains the issues here. It is really confounding that, for 30
years, this has gone on. I have thought numerous times this was
going to be enforced the next 2 or 3 years, but somehow, they
cleverly keep figuring out a way to not live up to their side
of the agreement.
Mr. SMITH of Nebraska. Well said. Thank you.
I yield back.
Chairman SMITH. Mr. Steube is recognized.
Mr. STEUBE. Thank you, Mr. Chairman.
Mr. Hemminger, we will stay with you. Thank you for your
testimony today. And I agree with you that the American farmers
are losing a competitive edge in the global marketplace. It
seems like there are two parts to this problem. First, other
countries are stacking the deck against American imports,
whether that is Mexico banning certain GMO crops or Canadian
subsidies to undercut American farmers. Or perhaps, more
importantly, our government isn't doing enough to help American
businesses, farmers in particular. We are imposing ridiculous
regulatory burdens on labor, environmental standards, a laundry
list of other areas. We have created a policy towards farmers
that is definitely not America first.
In your testimony, you said money goes where money can be
made. With that in mind, do you have any further examples or
predictions going forward of how States like New York or
America in general are losing agriculture production and
resources to competitors because of bad policy.
Mr. HEMMINGER. Well, thank you for the question, and I am
very concerned. We are just stacking the deck against the
American farmer, particularly those that have more intense
labor needs with the fruits and vegetables and dairy. I believe
that, in New York State, where we are a little more traditional
with family farms that would have a handful of employees or
maybe even 10 or 15, that the regulations they are looking at,
that they are going to get pushed out of business. I am scared
for them. I have a little more mechanized, but as I have
learned in the process of the vegetable business when I was a
major shipper for Birds Eye Foods, being the last guy standing
doesn't make you very smart; everybody else moved on first.
And, fortunately, I stayed in the dairy business, and that is
my primary business today, along with the cabbage.
But we have to do something to stay competitive. I mean,
there is talk about E-Verify system in Washington right now.
Folks, 70 or 80 percent of the employees on dairy farms in the
United States will struggle with an E-Verify system; the
hospitality business and food businesses in a lot of our big
cities. This didn't happen overnight. It has evolved over the
last 30 years. And we need to listen to small business and hear
them and understand that we need a comprehensive immigration
bill that addresses this. Some of the finest families in my
community or my employees with me for 20 years that I am not
sure that they can live up to an E-Verify system. And it is a
very, very big concern.
As far as GMO and whatnot, I mean, it is just a playing
card by Mexico right now. There is absolutely no validity at
all in any of their concerns about GMO. Sound science is how we
are put together doing our cropping whatnot with as minimal a
carbon footprint as possible with a lot of cover crops is what
we are about. And, with that, we need modern farming practices.
Mr. STEUBE. Yeah, I have seen that in my own district in
Florida. We have seen it after NAFTA was passed. We have lost
tomato growers because they can obviously produce it a lot
cheaper without the labor standards, without the environmental
standards in Mexico than they can here in the United States.
In general, American farmers and businesses follow the
rules. If something is prohibited, they don't do it. But, in
Mexico or in China, rules and bans are more of suggestions.
When something is banned in Mexico or China, it often just
means someone needs to be bribed; businesses don't really play
by the rules. This is also true for environmental and human
rights regulations as well.
Mr. Romano and Mr. Hemminger, if you want to touch on it
too. Can you speak to the unlevel playing field created when
countries like Mexico and China implement rules that are
followed by American businesses but aren't actually enforced or
followed by their own businesses.
Mr. Romano.
Mr. ROMANO. Yeah, so I think it is a great question when
you think about how we are producing in the United States.
Specifically, we actually have a plant in China as well. So,
when we think about how we bought that plant back in 2019 in
part of another acquisition, and that is a small facility that
we struggle to compete with because, when we--using our
technology and our resources the way we need to invest in the
U.S., we use those same principles in China. And we find that
we are very uncompetitive because of the things that we are
doing as we manage our production to ensure that we are
treating the environment the appropriate way.
Mr. STEUBE. Well, and you spoke about the need to consider
increased tariffs on China in regards to the titanium dioxide.
Can you speak further as to why, and when dealing with
unscrupulous trading partners such as China, a simple free
market approach doesn't always work and economic tools such as
tariffs are necessary?
Mr. ROMANO. Yes, so I mentioned that, as the tariffs have
been put in place, exports into the U.S. have halved. I will
give you another example of another country where we supply a
lot of material into is India. So, in that same timeframe,
India has a market that consumes about 400,000 tons a year.
Imports in 2017 were 89,000 tons. They are now 210,000 tons.
So, the import duties that have been put in place, along
with the 301, have helped us manage our business, and we
struggle to do that in Europe as well. So, Europe is another
country that we have got three production facilities in, and
the Chinese imports in that area have gone up to 82 percent
since 2017.
Mr. STEUBE. Thank you. My time has expired.
Chairman SMITH. Thank you. Mr. Pascrell.
Mr. PASCRELL. Thank you, Mr. Chairman.
Mr. O'Shei, I want to start off with a couple of quick
questions, if you will. Should Congress make it easier for
unions to file trade petitions by lowering minimum percentage
thresholds for a union to show interest in anti-dumping and
countervailing duty cases?
Mr. O'SHEI. I agree with that statement. Thank you for the
question, Mr. Pascrell. For the most part, especially in our
industry, most of the major tire manufacturers in the United
States have plants in China. And they don't want to get
anywhere near a trade case that we bring to the International
Trade Commission because they all fear repercussion. And, you
know, talking to our legislative representatives, they are not
inexpensive cases to bring. When we go before the ITC, China
has the best lawyers money can buy. They are very hard to
prove. They don't give up the information easy.
I believe our most expensive case might have been Truck and
Bus. It was $3 million to bring. They don't get that type of
dues money from all the union rubber workers in the U.S.
combined in a year.
Mr. Pascrell, my second question is trade cases cost a lot
of time, a lot of money. If you want to file, that is what you
have to look forward to. How should the Federal Government
support easing this complicated process for smaller companies
and unions? Just quickly give me an idea of what you see
ahead--you would like to see ahead.
Mr. O'SHEI. What we would like to see is, number one, a way
where you don't have to show 3 years of injury before you bring
a case because usually, by that time, you may be so damaged you
never recover. Also, you know, it would be nice to see maybe
even if the government could bring cases for us, or
representatives, or, you know, smaller companies not having the
money to bring a case have some sort of advocacy there for
them. But, you know, we actually had one case where a major
tire company testified against us because they made--tire
overseas.
Mr. PASCRELL. Thank you for your brief response. We need to
talk a lot more about that. Because I think something can be
done in this area for everybody's health.
And welcome to everybody.
The witnesses were excellent, Mr. Chairman. If you look
back at their records, and they have done about everything.
And I don't know how long you lasted in this business, Mr.
Atkins, 30 years, but it is not bad. Congratulations.
Mr. ATKINS. Thank you.
Mr. PASCRELL. Working with both business and labor is not
an easy task, but one worthwhile for the economy, I believe.
And nearly 40 percent of the Nation's population live in the
tri-state area. So welcome.
Having a field hearing here at the busy port in New York
and New Jersey is definitely welcome. We are just a golf shot
from the Garden State. I am right happy to show the committee
more real folks living in Patterson, New Jersey, my hometown.
The operations at Global Container Terminals underscore the
vital role the Federal Government plays in a vibrant economy.
The Federal Government worked with the Port Authority on a $1.8
billion dredging project here. This project ensured the
terminals would welcome big ships with speed and efficiency.
That was the promise. Strong Federal partnership with the Army
Corps dredged our region's harbor 50 feet. Correct me if I am
wrong. It helped us maintain our leading global shipping
destination, but the Army Corps was a valuable agency to what
you were trying to do with this port. But, considering their
budget plan, the other side I respect deeply, but it doesn't
make sense. Because we have to agree, in order to do what we
promised, which we did not do.
Just 13 days ago, we passed a terrible plan that hacks
Federal spending by at least 22 percent. This would be the
biggest cut to nondefense programs in our history. Republicans
are following the footsteps of their disgraced and indicted
leader. Mr. Trump tried to chop 16 percent, a billion dollars,
from the Army Corps' budget. Those are the facts.
So, the budget would gut the Department of Homeland
Security. It could devastate our economic future and trade
enforcement. So, it is one thing to talk about it; it is
another thing to put the money where your mouth is and do it,
if it is meaningful.
Rolling back funding would slash Customs' frontline
enforcement by 2,400 agents. It sounds like the IRS 10 years
ago. These cuts would cripple our forced labor enforcement.
Talk is cheap. I don't have to tell you, Mr. Atkins. So, it
is going to undo our work if we pass this budget.
I am a long-time champion of strong trade enforcement, but
it is not free. I have longed pushed for more funding for
Customs' trade office. Cuts of the magnitude my colleagues have
proposed are devastating and reckless. Let's be very honest
about these cuts, especially since we see the importance of
Federal investments right here today in Staten Island, USA.
Thank you all for being here. The testimony was excellent.
I am going back to Washington in a few minutes to fight the
fight.
Thank you, Mr. Chairman.
Chairman SMITH. Thank you, sir.
Mrs. Fischbach is recognized.
Mrs. FISCHBACH. There we go. I had to figure out the
technology.
But, first of all, I want to thank you all for being here
because I think the field hearings are one of my favorite
things because we get to hear from folks across the country;
you know, Georgia and Oklahoma and West Virginia. And so, I
appreciate it that we get out of D.C. for a variety of reasons.
But one of them in particular is being able to talk to folks
that what we do in D.C. actually affects.
And, Mr. Hemminger, I just wanted to talk a little bit
about--I am from Minnesota, heavy ag district. I have about 100
miles of Canadian border on the northern part of my district.
And I know that Mr. Smith had mentioned USMCA. Very concerned
about--excuse me, the dairy enforcement now. We have got the
issue with the GMO corn from Mexico. So very concerned that we
actually do the enforcement that we are supposed to on that.
And then Mr. Steube had mentioned about the competition.
I was wondering if you could talk maybe a little bit about
the workforce issues. You mentioned and I think briefly in your
opening statements, you mentioned the H-2A; I think you
mentioned E-verify, you know, in responding to one of the
questions.
Workforce is a huge issue and particularly for the ag
industry. So, I am wondering if you have any ideas, what can we
do? Is there an answer through visas, immigration policy? What
can we do that would make sense to open up that workforce
shortage.
Mr. HEMMINGER. Thank you. An excellent question. First of
all, we need a comprehensive immigration program that we have
kicked down the road for over 15 years. And, with that, we have
to have a system that at least gives a green card to these
people that are here and have been working hard. We had a
reasonable bill in front of the Congress here 6 months ago or
so, and it failed again. That is a where we need to start.
The H-2A program, I have participated for 15 years.
Unbelievably bureaucratic. We got it a little bit simplified
and some things coming along to make it a little more workable.
And then, in the last 2 years, it has gone just the opposite
way.
Their formula to figure out the wages is absolutely
bizarre. We are priced now so that, when I pay overtime on a
$16.95 an hour in my greenhouses and cabbage operation, I am
double my competitors' in Canada salary. Double. They don't
have to pay overtime. And their foreign visa program is more in
the $11 to $12 program.
And keep in mind, on top of that, we pay--we have brand new
housing for the people when they are here. We supply them with
all their transportation, including to and from the store. And
then part of the program is we pay all their transportation to
and from Mexico.
In Mexico, what they make in an hour here is a day's wage
there. And these people are wonderful. I have a few guys--I was
only getting a handful 15 years ago--I have a number of them
that are still with me. I have more than half my crew that have
been with me around 10 years. And they are family to us now.
And they come, and our farm runs well.
We need to embrace that program. It needs to be allowed to
be more than just seasonal. Right now, it is seasonal only. The
dairies need an opportunity to be a part of that program to
bring people here for multiple years. The training and
technology on our farms today takes people that need to be
trained, and it could take 6 months to train them. We are
literally crippling our industry and making our industry have
to seek these undocumented workers. It is just so frustrating.
And enforce the trade agreements. And I have a very, very
soft heart for the people that are being misused in other parts
of the country. I am glad that we heard that testimony today.
And I believe with trade we could help fix that as well.
We need to support the American farmer, or we are only
going to be growing corn, soybeans, and wheat here. And nothing
against my friend from Kansas, but if we want crops that take
labor, we have got to fix this. Otherwise, we are going to
slowly just watch labor-dependent agriculture dwindle here in
the United States. And it would be foolish for us to continue
to spend money on these enterprises if we are going to be axing
them.
Mrs. FISCHBACH. And thank you very much, and I appreciate
that. It was very well said. And we will continue to pursue
what we can to make sure we get that workforce shortage dealt
with.
And I just want to say, I apologize; I have to leave early.
I have to get back to D.C. for another committee hearing. But
thank you again, all, for being here.
And, with that, I yield back 2 seconds.
Chairman SMITH. Thank you.
Mr. Estes is recognized.
Ms. ESTES. Thank you, Mr. Chairman.
And thank you to all our witnesses today for being here. I
appreciate having field hearings outside of the D.C. Beltway to
hear firsthand, really, how our policies that are made in
Washington affect families and businesses. And I think today is
really useful as we talk about trade here, particularly in the
hub of global commerce.
There is strong bipartisan support for some of the trade
themes we have talked about today: expanding markets for our
manufacturers and producers, continuing the good work we
started with USMCA, enforcing our existing agreements, and
holding China accountable.
I briefly want to touch on a nonpartisan commonsense bill
that I believe will help us in a competitive--on the global
stage and enhance our ability here at home to innovate and
expand trade opportunities. The bill restores the immediate R&D
expensing for American innovators and entrepreneurs, the
American Innovation and R&D Competitiveness Act. I was joined
with my Ways and Means colleague on the other side of the
aisle, Congressman John Larson, and many others on this
committee.
According to the R&D Coalition, the U.S. share of global
R&D investments in 2019 was 30 percent, which is down from 33
percent in 2009 and 40 percent in 1999. On the other hand,
China, heard their global shares of R&D expense has gone up. It
was 24 percent in 2019, a big jump from 5 percent in 2000. And
15 percent in 2009. That means that China's R&D expenses have
grown by 400 percent in just two decades.
By disincentivizing R&D here at home, American tax policies
encourage manufacturers and production to move abroad. And we
know where R&D occurs is critical for job manufacturing, job
growth, and having jobs period that then allow us to export
American-made products.
Mr. Romano, the National Taxpayers Union called this bill a
no-brainer and thinks that, given its broad bipartisan support
and real-world application, it should pass with ease. Do you
agree with this is a no-brainer? And what would you say to my
colleagues to help encourage them to support legislation like
this?
Mr. ROMANO. I would absolutely say that I would agree with
that. From the standpoint of research and development, you
think about what we do. We are a miner. And we upgrade the
products that ultimately we sell as finished goods to people
like you. Our product is a quality-of-life product. And the
only way we are going to stay ahead of the Chinese is through
investment and technology; technology for the products that we
make, the way we make them, and obviously reinvesting in
technology and supporting growth with our own employees so that
they have the technology and the skills that are required to--
as we upgrade our facilities, they have got the capability to
run those facilities with new techniques.
Mr. ESTES. Well, thank you. And, you know, I mentioned,
talked a little bit about China and their R&D investments. We
also know that China has been involved in predatory trade
practices and participates in atrocious human rights abuses. At
the same time, they have used their Belt and Road Initiative to
deepen ties with other countries while United States has taken
a backseat to some of these practices, including expanding
trade. This is deeply disturbing and has a detrimental impact
to U.S. workers and small businesses.
From a human rights and economic standpoint, Mr. Turkel,
what is your assessment of China's aggressive approach to
trade, and what should the U.S. be doing to counter the Chinese
Communist Party and these practices?
Mr. TURKEL. Thank you very much for the question. The BRI
that you mentioned also has something to do with the ongoing
genocide and the enslavement of the Uyghur people. When you
look at the--at least in the last 10 years of Chinese economic
growth, it has been slowed because they claim that they got
millions of people out of poverty, but at the same time, they
created a vacuum, a labor shortage, which still is the case.
And they tried to resolve that issue by using the Uyghurs as a
modern-day slave. That is one.
And the other is a political reason. As I alluded earlier,
it is about total control.
So, one of the things that we have to do in order to
address this is to look at the ways in which that we cannot
only enforce, fully enforce, the existing laws but also looking
at new laws. One of the new laws that I think would be very
helpful is the modeling the FCPA, Foreign Corrupt Practices
Act, to make human rights abuses, enslavement of the Uyghurs,
atrocity crimes, a law enforcement matter, attaching it to the
existing law that we are discussing today.
The other thing is that we need to implement Uyghur Human
Rights Policy Act that specifically mandates the administration
to continue to sanction Chinese entities. And the UFLPA also
requires Entity List designations. Since last June, there were
only 20 companies that have been designated. We need to expand
that. There are 55,000 entities doing business in the Uyghur
region. We don't have to designate all of them at the entity
list, but the vast majority of them, including this one here
that I am showing this amazing report produced by my colleagues
at the Uyghur Human Rights Project, reporting the dates, the
red dates coming to the United States that are produced,
exported by Xinjiang Production Construction Corps, which is
recognized by the United States Government as a paramilitary
and also sanctioned under the Global Magnitsky Act. I would
like to ask chairman for your permission to include this in the
record.
Chairman SMITH. Without objection.
[The information follows:]
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Mr. ESTES. Thank you. There are so many issues to talk
about. I would love to talk about some agriculture issues from
Kansas with New York, but, unfortunately, I am out of time.
Mr. Chairman, I yield back.
Chairman SMITH. Thank you. I would like to recognize the
gentlelady from West Virginia, Mrs. Miller.
Mrs. MILLER. Thank you, Mr. Chairman, and Ranking Member
Neal.
And I want to thank all of you who are here today. What a
gorgeous day. I, along with my chairman, probably wish that I
was wearing the Panama hat that I received in Ecuador when we
were down on a trade trip with many of our neighbors and allies
talking trade.
I want to thank each one of you personally: Mr. Atkins, Mr.
Hemminger--I am a fellow farm girl member--Mr. Turkel, all of
you--Mr. Romano, Mr. O'Shei, which we would say O'Shay in West
Virginia, so I am sure you get that a lot.
I am from a beautiful State full of incredible natural
resources and in particular water and these rivers that all
flow down to the Ohio River. And Huntington, where I live, is
either the first or second largest inland water way port. It
depends on what Cincinnati has to say about that. But we move
different things than you move right here in these ports.
Mr. Romano, I understand that your company is considering
building a rare earth plant in Mississippi. And my home State
of West Virginia, of course, has received similar interest in
developing these capabilities and bringing in an essential part
of the supply chain to the United States.
I am greatly concerned about China's dominance--we keep
hearing this through this entire discussion today--and their
dominance in the critical mineral market because the United
States absolutely has the capabilities to promote our own
domestic industry. And for too long the Federal Government has
gotten in the way. So, we are working to be able to change
that.
Can you discuss what challenges your company has faced when
deciding whether to develop critical mineral processing plants
right here in the United States? And do you have any
suggestions for Congress to ensure that the U.S. processing
plants can be competitive in the current market?
Mr. ROMANO. Thank you for your question. So, as I mentioned
in my testimony--or maybe I did it in a question--we have--
Monazite is a product that we mine at the same time that we
mine titanium in South Africa and Australia. So historically
what we have done with that, it was a waste stream that was
being processed and sold to China. So, over the course of the
last several years, we have turned that into a revenue stream.
But now we are looking at how we can step down the value chain
and actually build a facility in Hamilton and upgrade that
product similar to the way we upgrade titanium dioxide.
So, there is a lot of money when you think involved in
that. It is a capital expense. So, I use a different raw
material, cobalt. You think about there is a company not long
ago that just tried to build a mine there without any trade
barriers. The mine came up and running, and what did China do?
They dropped the price for cobalt. So, they have the same
capability to do that in rare earth applications. And that is
why China owns dominantly over 90 percent of that.
So, I think we have got to--we are uniquely positioned as a
miner and also an upgrader of raw materials to look at Hamilton
as a facility. We believe that is a great location for us to
expand our footprint, support the local employment of that
area, and also be able to develop products that will be used
here in America, and possibly even by the U.S. Government.
Monazite is the product that we would be selling into that--for
rare earth oxides, and it is used in military applications for
F-15s. You think about--every electronic device inside one of
those F-15s has a motor in it. Those motors have rare earths in
them. So, it is also wind turbines and electric vehicles. So,
we are looking to see how we can partner with companies in the
U.S. to make sure that we have not only a viable plan but one
that is economical for us long term.
Mrs. MILLER. One of the things I thought in office is that
I wish I had a degree in chemistry, particularly because of the
natural resources. And I think about all the byproducts left
over from coal throughout the years. But I will switch
direction with you a little bit to talk about how President
Trump's section 301 tariffs against China could have helped
your company remain as a viable competitor. I believe it is
essential that we deliberate with our tariffs in a strategic,
as well as providing potential relief for nonstrategic goods
that are important to U.S. businesses. Can you talk about
conditions for U.S. titanium dioxide producers before tariffs
were imposed?
Mr. ROMANO. Yeah. So, again, I have been with this company
for many years, and I have seen many plants close over time.
So, we had production in Savannah, Georgia, where we made a
titanium product that was specific to the paper industry. And I
can remember having meetings with customers at that time
telling them that we didn't choose to be competitive because
the Chinese were bringing that material in at half our costs.
Ultimately, that plant ended up closing. So, when we think
about, okay, now fast forward to 2017 when the tariffs were put
in place; there has been no plant closures.
Capacity has idled a bit, slowed down a bit just due to
supply and demand. But capacity as nameplate has not changed.
You think about the imports of TiO2 into the U.S. versus our--
the consumption of TiO2 in the U.S. versus production, we
consume as a country about a million tons a year of titanium
dioxide, and we have a capacity utilization of 1.5 million. So,
there is really no need to have that much material coming in.
Those tariffs have been extremely helpful for us.
Mrs. MILLER. That is great.
Mr. Atkins, thank you for hosting us here today. I have
traveled extensively since becoming a Member of Congress, and I
was thrilled to go to the Port of Singapore last year. As the
operator of the second largest port in America, I would be very
interested in hearing how you think U.S. ports compare to
others globally and what role Congress plays in maintaining
your competitiveness?
Mr. ATKINS. Yes, ma'am. Thank you for the question. The
U.S. side, it is a good blend of the equipment that we utilize
and how we work with the workforce. Over in Singapore and a lot
of the other ports around the world, they tend to be
transshipment hubs, highly mechanized, highly automated.
Automation doesn't necessarily mean that it is going to be
faster. It just means that it is consistent.
We have an operation over in Bayonne that does have a
degree of remote operation. We kept people in particular jobs
in equipment that actually performs faster than some of these
automated operations. So there needs to be continued investment
across the board, as we talked about, on dredging, on the
equipment that we have. I know there is a Buy America piece
when it comes to these large gantry cranes that we talk about.
There are just no manufacturers when it comes to any of these
large cranes that you see. And these cranes on average are $15-
to $18 million apiece. So, it is heavy, heavy investment. It is
not responsible for any type of Federal grants or subsidies. So
those are the type things that we can look to stay competitive
with other ports around the world. But it is a good blend of
the investment that you have on your infrastructure and the
labor that you have on your facility.
Mrs. MILLER. You answered my next question very well.
Thank you so much, and I yield back.
Chairman SMITH. Thank you. Representative Kustoff.
Mr. KUSTOFF. Thank you, Mr. Chairman. Nice hat.
Thank you to the witnesses for appearing today.
Thank you, Atkins, for hosting us.
I want to go to you, and you talked about this in your
testimony and in response to the questions, but maybe if I can
go a little bit deeper. The volume here today is less and maybe
substantially less than it was a year ago. Is that a fair
statement?
Mr. ATKINS. Yes.
Mr. KUSTOFF. And I think you gave these numbers, but can
you give the numbers of today versus a year ago and maybe at
the start of the pandemic?
Mr. ATKINS. So, our numbers today, year over year, going
back exactly 12 months, were approximately 42 percent down now
as from where we were last year.
Mr. KUSTOFF. Give that number again, I am sorry.
Mr. ATKINS. 42 percent. If you took our numbers that we
have today and go back to 2019, as we classify as pre-pandemic,
we are down about 15 percent year over year.
Mr. KUSTOFF. And how would you characterize the supply
chain issues today as compared to a year ago?
Mr. ATKINS. I think, as I phrased it earlier, the time kind
of dissipated the supply chain issues. What we were
experiencing last year was a large glut of cargo that all was
getting pushed out at once where everything--there was no place
to put it.
Now that trade has slowed down and, you know, the inventory
levels that we saw during the pandemic have come down, that has
greatly eased, if not eliminated, the supply chain issues that
we saw a year ago.
Mr. KUSTOFF. To be fair about it, it is more of a demand
issue than it is a supply chain issue.
Mr. ATKINS. Correct.
Mr. KUSTOFF. You have been in this business 30 years, you
have seen up and down cycles. How would you characterize this
cycle where we are now? Or are we in a cycle.
Mr. O'SHEI. This is a very cyclical business. When interest
rates are up, consumer purchasing goes down. When in 2008 and
2009, during the financial crisis, trade came pretty much to a
grinding halt. So, we appear to be in self-correction period, I
think you could call it, where we are--you know, the shippers
and cargo owners that you see across the board are working down
their inventory levels. Once they get to a certain point, you
will start to see a replenishment, and you should see volumes
then coming back.
Mr. KUSTOFF. Okay. Where we are today, not a true
definition, but would you characterize this as a--is it
softening, or are we in a recession now?
Mr. ATKINS. Oh, math and economics was never my strong suit
in college. But, from where we sit, you still see buying going
on. We do employ outside economists to help us try to read the
tea leaves. And you still see purchasing go on. It is just
working the inventory levels down. So, I wouldn't call it
necessarily a recession.
Mr. KUSTOFF. When you forecast out, say, 90 days, how does
this seaport look then compared to now?
Mr. ATKINS. From the larger shippers that we talk to, and
cargo owners, they are saying third quarter you should start to
see a bounce back.
But, historically, you start in June, inventory or volumes
start to pick up, getting ready for back-to-school goods,
starting to replenish warehouses for Christmas shopping, so
forth and so on.
So, a combination of the usual annual cycle that you see,
on top of inventories starting to need to be replenished,
should be around third quarter.
Mr. KUSTOFF. I think one example you gave was furniture and
lack of demand.
Mr. ATKINS. Yes.
Mr. KUSTOFF. And I think you characterized the rising
interest rates. So, if you expand that out, if interest rates
stay elevated compared to where they were, the demand for
furniture may not be what it was a couple years ago.
Would that be a fair statement?
Mr. ATKINS. That is a very fair statement.
Mr. KUSTOFF. If I can just in my remaining time, in your
opening statement and in your written statement you talked
about the media reporting in 2002 on the supply chain, blaming
it on carriers, and that that was misplaced.
Mr. ATKINS. Yes.
Mr. KUSTOFF. What were the reasons?
Mr. ATKINS. The reasons were an oversupply of the material
that was coming in, that there was no place left to go.
I mean, an ocean carrier does not make money with their
vessel while it is sitting anchored for 2 weeks waiting to get
into harbor. So, they have a vested interest to get in, get the
ship discharged and out.
But marine terminals, whether it is East Coast or West
Coast, both coasts, there was just no room left on the marine
terminals to discharge vessels.
Mr. KUSTOFF. Thank you, Mr. Atkins.
Mr. Turkel, just briefly, since I am out of time.
We all know about--following up on the supply chain--what
COVID demonstrated to all of us is we need certain
manufacturing--like to have all manufacturing--but PPE and
pharmaceuticals especially closer to home. And to your point, I
think you outlined it really well about the forced labor.
My question to you is, government can do what government
can do. Doesn't private industry itself, though, have some
responsibility as it relates to the forced labor?
Mr. TURKEL. Absolutely.
The private sector has been doing two things.
One, during the process of passing this bill they were
opposed to it, as you may recall.
And then after the bill, this legislation, became a law,
they are trying to slow down the process of implementation.
And then the third thing that they are doing is not
publicly talking about the things that they have done. When you
ask them, ``Why can't you just go out and tell them that you
terminated your relationship with a questionable supplier?''
they said, ``Oh, there would be retaliation.''
There is a company called OFILM that makes the iPhone
screens. Apple let them go. But to this day Apple never talks
about publicly why they let this company go.
So, the private sector has a huge responsibility. And now
they should have found out that this country that they have
been telling the American people is an ideal place for doing
business is becoming increasingly hostile.
Ms. MALLIOTAKIS [presiding]. Thank you very much. Thank you
very much.
The chair recognizes Ms. Tenney of New York for 5 minutes.
Ms. TENNEY. Thank you very much.
Thank you to the chairman for bringing us here.
And thank you, Ranking Member Neal.
And also thank you to my colleague, Nicole Malliotakis, for
hosting us here. Nicole was part of our special Farm Bureau
event when we were in the New York State Legislature, adopt a
New York City Legislator, where we brought her up to upstate
New York to visit a farm, to see what it is like to grow up on
a farm.
And so that is why I am just so excited and glad to be in
Staten Island for my first time. Sad to say I haven't been here
sooner. What a beautiful spot.
And thank you to Mr. Atkins also.
And I just want to say especially thank you to Mr.
Hemminger for your great testimony today. You are a very
popular person on the panel today.
And we appreciate your leadership in New York as an
agricultural leader, as someone who started with just a small
dairy farm and turned it into a large enterprise with real
automation. We watched your cows. I got to visit the farm and
watched them waiting in line to get into the self-milking
machine. That was pretty incredible to see. And then to expand
into the crops that you do.
We are grateful that your family is still part of this
business. I think that is so important, to highlight your
family is part of all of this, and they are still involved.
You are devoted to New York State. You face the obstacles,
and you are continuing to go forward. Not everyone in
agriculture has been able to do that.
But, yet, New York State is one of the most important
agricultural leaders. And, in fact, New York 24, which I
represent, is the number one agricultural district in the
Northeast and the number one dairy producer in the Northeast.
People find that incredible to believe, but I know Ms.
Malliotakis knows all about that because she has now been to
upstate New York and toured around, and just to see how
beautiful it is and how wonderful our soil is, something you
talked about, the importance of soil, water, the great
resources we have. And yet we have a government that makes it
difficult sometimes for us to operate.
So, at your business, though, I saw a lot of great workers
who are grateful to you, grateful to your leadership, a lot of
very happy cows. It seemed they enjoyed a good atmosphere, good
weather conditions, good nutrition, and that is the secret to
producing.
I also wanted to say, your leadership in not just your
family but everyone--and I wanted to just say, you have this
expression which I actually wrote--I took a picture of it when
I was at your firm, and I could see it in your employees, your
family, your happy cows.
And Hemdale Farms has this thing called COW TAILS. And the
C stands for can-do attitude. The O for ownership, and everyone
has an ownership in the business, including your great
employees, that are foreign workers in some cases. Winners,
having fun, and everybody was obviously having fun, especially
the cows.
Teamwork. Accepting change, which you have been through in
order to survive in New York; it is a tough place to be.
Integrity, which is really important, and a lot of people don't
understand how important our agriculture businesses are.
Land and environmental stewardship, something that our
farmers are doing every day, and preserving our communities and
our land, our great land. And you mentioned something about
that in your--and I want to ask you about the solar panels.
Instead of growing apples, we are growing solar panels as a
specialty crop. And I say that as a joke.
And service to community and family.
And I just want to say this is a great motto that you keep,
and that is why, I think, a secret to your success.
Pretty much everyone has asked you about all the different
issues, whether it is dealing with the USMCA, the unfair trade
with Canada, your 30-year struggle to get your products into
Canada and around the world.
And then you also talked a lot about labor and our farm
worker labor bill that we have tried to get through in many
ways and having people understand that, the challenges with E-
Verify.
But I wanted to ask you a little bit about what I mentioned
just now, which is the specialty crop known as solar panels,
and a little bit about what is going on with energy in New York
State.
So, the Democrats, who control everything in New York State
on the government level in terms of the State, just passed a
$229 billion tax-and-spend package, the largest budget in New
York State history, even beyond what we thought after the
American Rescue funds of $12 billion were inserted into it.
This makes the budget the first ever to ban hookups to natural
gas coming down the road.
How is energy impacted in your district, your operation, as
a multifaceted agricultural industry? And what is the future
with this? And is this sustainable considering the cost of--
whether we are talking about the cost of fertilizer,
maintaining your dairy operation, maintaining all of your
operations, to get them to market?
Mr. HEMMINGER. Well, thank you for the compliments,
Congresswoman Tenney.
We are very concerned about this energy piece. To me, it is
way too much too fast. You would be interested to know my
greenhouse operation had the land already to expand to a couple
more greenhouses waiting for the farm labor bill to get
resolved. And because of that, and where we are today, we have
not built those greenhouses. We are turning business away.
Those greenhouses are heated by propane. No one has figured
out how to heat a greenhouse efficiently with electric yet. And
we dry the corn. We have to feed the cows in the winter for
grain. That portion of their diet we dry with propane. And, of
course, the robotic milkers are run with electric. And then the
tractors run with fuel, the trucks with diesel, and whatnot.
I am very concerned. I am actually confused. I don't
believe that this is going to work.
And I will just say again, as I said earlier, we are
looking more and more at just becoming a grain-only farm and
having a fraction of the employees we have and buying a big
combine right now with a little bit of grain. I have a neighbor
with a great combine who is a great operator run it. And just
changing our focus and having a lot less employees and a lot
less balls in the air because we don't believe we are going to
be able to survive.
My friends in the fruit business, apple harvest in
particular is their number one cost. Labor is over half their
expense at an apple farm. And they are seriously going to
bulldoze their trees out and put in solar panels.
In western New York near Batavia, there is a 400- or 500-
acre area of beautiful vegetable ground, farmland that is being
developed into solar right now.
I am all pro-solar, but I believe my children or my
grandchildren's generations will say, ``What were they
thinking, letting some of the best farmland in the world have
all these solar panels on it?''
Ms. MALLIOTAKIS. Thank you.
Mr. HEMMINGER. I am all pro-solar.
Ms. MALLIOTAKIS. Thank you, Mr. Hemminger.
Ms. TENNEY. Thank you so much.
I yield back.
Ms. MALLIOTAKIS. I would like to recognize Mr. Moore of
Utah for 5 minutes.
Mr. MOORE of Utah. Thank you. Great job hosting. Wonderful
venue. Thanks for setting this all up for us today.
Mr. Romano, your line of questioning with my colleague from
West Virginia actually hit on one of the things I wanted to
talk about. So, instead, I am going to pivot and actually ask
you and Mr. Turkel to just reiterate for the group today just
the salient point in both of your areas.
Mr. Romano, you are talking a lot about competitiveness
with China and some of the unfair practices that they are doing
with respect to international trade.
Mr. Turkel, we are talking forced labor camps in Xinjiang
Province with the Uyghur population, something I am proud that
the U.S. is working on. We are not there yet, but we are taking
action on this.
Just clearly communicate to us one more time, what do we
and the rest of the world or those partners of ours across
international coalitions need to continue to do or do more of
to combat both of your areas of influence and expertise?
Mr. ROMANO. So, as I mentioned, I gave a couple of
statistics around what is happening in other areas of the world
where things like Section 301 are not being utilized.
It is very public what some of the Chinese companies are
doing. Actually, I have got a document here that shows what the
largest company did. I made reference to it in my presentation,
where they are publicly saying they are at 50 percent, they are
adding more capacity, and their goal is to see the removal of
Western suppliers.
So, it is not just in the U.S. We operate on six different
continents. The U.S., we have our largest TiO2 facility, but we
also operate on every continent. We sell into 120 different
countries. We have a plant in Brazil where exports into Brazil
have gone from 60,000 tons to 90,000 tons. The way they are
continuing to penetrate, using stolen technology in many
instances, and then expanding that.
There is a book called ``Tiger Trap,'' which is a great
read, and it talks about how over time, decades, the Chinese
accumulate technology and then eventually start to put that in
place, and that is what you are seeing now. We have had
experience with plant closures in Georgia, as I have mentioned.
We closed a plant in Antwerp. There are at least two companies
today in Spain and Germany that are looking at closing down.
So, it is not just the U.S. The U.S. has done a great job
of managing that and, again, protecting U.S. business, and
particularly our businesses. But it is continuing to reinforce
what has been happening and continuing to revaluate, are those
tariffs high enough?
Today the Chinese--you can use an average price of our
product today is around $3,000 a ton. In many instances, we are
being undercut by more than a thousand dollars a ton, and we
know these companies are not making money.
Mr. MOORE of Utah. Thank you.
Mr. Turkel.
Mr. TURKEL. Thank you.
For starters, we have to acknowledge, recognize our own
problem, which is our complicity in the ongoing atrocity
crimes. American consumers need to know that more than 80
global brands that we consume on a daily basis--agricultural
products, cleaning supplies, solar panels, EV batteries--
literally everything is made with slave labor. I just mentioned
55,000 entities doing business in the Uyghur homeland, Uyghur
region. That explains.
And then, two, we need to close the loophole. The de
minimus is one of the areas that we need to target.
I commend the 24 Members of Congress who recently wrote
asking the SEC to demand the Shein Company to go through
mandatory independent auditing. That is one way to look at it.
And then also naming and shaming, it is so important. When
you deal with the issues at this magnitude, we should not let
any perpetuators, any bad actors, to stay anonymous.
We have about 50,000 companies that have been responsible
for internal labor transfer. We should go after them if 55,000
is too much to deal with.
And also, finally, we need to stop investing in our own
self-destruction. The American people are still investing in
Chinese high tech. There are 64 companies that have been
sanctioned because of the human rights abuses. Only 11 of them
are listed or identified as the companies that the American
people should not invest, make an investment.
Mr. MOORE of Utah. Thank you so much.
Mr. Hemminger, in the few seconds left, just to thank you
for your work with respect to USMCA. My northern part of Utah,
where my district is, strong dairy producers. And so, the work
you are doing can create competitiveness, and making sure we
are all playing by the same rules is very important.
And thank you for your comments as well on immigration and
comprehensive immigration reform. We have to think about every
step of this, and it is great to hear your perspective.
So, thank you.
And I yield the time that I don't have back.
Ms. MALLIOTAKIS. Thank you very much.
The chair recognizes Mrs. Steel from California for 5
minutes.
Mrs. STEEL. Thank you so much.
Thank you to all the witnesses coming for this important
hearing and raising awareness about the issues at our ports.
Even though the Los Angeles and Long Beach ports are the
biggest ports in the United States, companies are leaving Long
Beach and L.A. Ports in California have been in chaos and now
have turned into ghost towns. West Coast ports have major
backlog caused in part by ships idling off the coast of
southern California.
And to make matters worse, California regulations like AB5
and new environmental regulations cause independent truckers to
leave California and they cannot come back in.
There has also been a yearslong headache around the
longshoremen's contract, which is still being negotiated. It is
almost a year now.
In 2023, the output at Long Beach and L.A. ports are down
30 percent. You said here 42 percent, but 30 percent compared
to the first quarter of last year.
The fiscal year 2023 NDAA included my Supply Chain Task
Force Act to ensure the government works with our ports to
improve effectiveness.
So, Mr. Atkins, our ports need to allow automation, you
just talked a little bit about it, and modernization to compete
with our major port. We need to ensure that our ports are
always modernizing so that we can expand trade and move goods.
Do you think we can enhance ports with the new technologies
and automation that will help protect our workers and allow us
to compete with other ports around the world?
Mr. ATKINS. Well, that is a fantastic question, and it is
one that is equal on the East Coast and West Coast.
I don't think we should confuse automation with
modernization. Modernization of ports means bigger cranes to
service the larger ships.
When we talked about dredging in New York, in 1997, the
industry thought 5,600 TEUs, twenty-foot equivalents, was going
to be the biggest ship this harbor would ever see. We are now
handling 16,000 TEU-sized vessels, and they are scrapping
vessels smaller than 8,000 TEUs.
So, modernization really is keeping up with the size of the
vessels, looking at sustainability with hybrid equipment, all-
electric equipment, and also using data to be able to
streamline and pass off cargo from one part of the supply chain
to the other.
So there needs to be a consistent investment in the harbors
and the ports to be able to handle the larger ships. And larger
ships are beneficial to the U.S. consumer because the economy
of scales of a container load of shoes coming on a 16,000-TEU
vessel means it is much cheaper transportation costs than on
the smaller vessel.
So, it is incumbent upon government and private industry to
keep investing in the infrastructure and modernizing these
facilities, and everyone benefits from that.
Mrs. STEEL. Thank you for that answer.
I have a question to Mr. Romano.
I just read a Korean newspaper--I speak Korean as my first
and Japanese as my second, so I read all these newspapers. And
CCP--actually, Korea doesn't have those kind of, like, battery-
building materials.
So, what happened was yesterday they just announced that
they are going to invest over a trillion dollars to Korea, and
they are building these batteries, and then they want to sell
it that it was made in Korea and coming into the United States.
How are we going to stop these kind of loopholes?
Mr. ROMANO. Yeah, that is a great question.
Korea is a big market for us. It is probably the third-
largest market we sell into behind India.
I made reference to that even in Africa with regards to the
minerals that are being mined in that area by Chinese producers
who historically don't own assets there. I was not aware of the
article you just referenced in Korea.
But it is one of the biggest struggles that we have. And I
think the best thing we can do in the U.S. is support
development of that technology in the U.S., and other countries
like Korea should do the same.
Korea is a huge trading partner with China. A lot of our
business in Korea over the course of--through the pandemic has
been significantly impacted because China slowed down their
production; therefore, Korea slowed down theirs.
So, I think what we are talking about here in the U.S.,
trying to reinforce how we can make in the U.S. and sell in the
U.S., other countries need to do the same thing.
Mrs. STEEL. Thank you.
I yield back.
Chairman SMITH [presiding]. Thank you.
Ms. Van Duyne.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
China has been aggressively signing trade and economic
agreements across the Indo-Pacific, Latin America, and in
Africa, as we all know. The result is that these countries and
these regions are growing more dependent on Chinese technology
companies and supply chains, opening the door for China's
authoritarian digital practices to take root and putting U.S.
technology companies at a significant competitive disadvantage.
And this all serves China's broader strategic interests.
Furthermore, China's lack of transparency and disregard for
human rights has led to a growing concern among many nations.
I recently traveled to Cambodia and Singapore to discuss
trade issues, and the resounding message that we heard was the
Biden administration continues to leave a void that China is
more than eager to fill, and as a nation, we must reclaim our
leadership on the global stage and hold China accountable when
it comes to its trade and global influence.
Trade enforcement must be targeted to cut off unfair trade
while facilitating swift movement of fairly traded products.
Small businesses facing historically high inflation and a
protracted supply chain crisis cannot afford all of this
unnecessary red tape.
The United States must hold China accountable for its human
rights abuses and predatory trade practices that devastate
American jobs. And I am glad to join my colleagues on this
committee and work to improve our supply chain and advance a
trade agenda that protects American workers.
Mr. Turkel, you had mentioned in one of your answers just
recently, you were talking about how the U.S. needs to stop
fighting against itself. Can you expand on that?
Mr. TURKEL. You mean the--can you repeat that question
again?
Ms. VAN DUYNE. You had mentioned earlier, in one of your
last answers, that the U.S. needs to stop fighting itself.
Mr. TURKEL. Well, yeah, I mentioned that for two reasons.
One, the American consumers continue to purchase those
tainted products that have been shipped out of China through
the global supply chain.
And then, two, American investors' pension funds are
fueling this genocide and contributing to the Chinese political
economy.
And, finally, the Chinese tech--it is going both ways
actually--has been so effective, and it is Chinese developed,
tested, utilized, and now exporting all around the world. And
some of our Silicon Valley companies that are silent on this
issue have been helping the Chinese high tech. That is what I
meant when I said we need to stop.
Ms. VAN DUYNE. I would also argue that the U.S. Government
is doing the same thing. Last year, I had introduced an
amendment when I was on the Transportation Committee, and the
amendment would prevent the U.S. from importing materials that
were mined with forced labor or child labor. I couldn't get a
single Democrat to support that amendment.
Do you believe that that is happening today? Are we
importing minerals that have been mined by child or forced
labor?
Mr. TURKEL. It is highly likely. I am not a solar panel
expert, but I have consulted with people who know the industry,
for example.
The type of dirty work, using coal to make solar panels,
specifically Uyghur youth being subject to, is something that
the Chinese population, the majority Han population, will not
be involved in and engaging in.
So based on that, and also the internal migration that has
been in practice for years, even while I was living in China in
the 1990s, points to the direction that the Uyghur youth have
also been subject to forced labor practices.
Ms. VAN DUYNE. Thank you very much for that answer.
Mr. Romano, your company is using a supply chain, and it is
trying to create a rare earth mineral plant in Mississippi.
Recently the Biden administration signed critical mineral
agreements with Japan and are currently negotiating with the
EU. These agreements lack safeguards of where they are sourced,
where they source their critical minerals, and make us again
more reliant on China.
Can you tell me a little bit about what Tronox is doing to
build up the rare earth domestic industry? And what policies
can the U.S. purpose to ensure that critical minerals are
produced here at home?
Mr. ROMANO. Yeah. Thank you for the question.
So, as I mentioned earlier, we have for many years been
mining rare earth materials in the form of monazite and have
been processing that up until recently and been selling it to
China.
So that is where the market is. We talk about how does
China get to the point where it is today? It is because they
control the market. They have more than 90 percent of the
production capacity.
So, what we are looking at doing now is building a facility
in Hamilton, Mississippi, where we would take the products that
we would have historically shipped to China and bring them into
the U.S. and upgrade those into products that can be used in
the magnets that I referred to earlier.
I think there has got to be some sort of--301 is another
good example of how we have managed our core business, which is
TiO2, but making sure that China can't do what they have
historically done, and that is drop the price very quickly
where it makes it uneconomical for people like us to look at
investigating expanding what would be a natural transition from
us for mining those products and selling them to mining them
and upgrading them and selling them into the U.S.
We are looking at getting some funding from the U.S., and
we are making good progress in that area. But I think USTR 301
trade tariffs have had a huge impact on our business. Those
kinds of things will help us make sure China doesn't do that to
us in this particular space around minerals, around rare
earths.
Ms. VAN DUYNE. Excellent. Thank you.
I yield back.
Chairman SMITH. Thank you.
Mr. Feenstra is recognized.
Mr. FEENSTRA. Thank you, Chairman Smith.
And thank you, Congresswoman Malliotakis, for allowing us
to be in your district. It is pretty awesome.
Iowa is one of the largest agricultural producers in the
world, and my district is at the heart of that. We rank number
one in virtually all ag categories, including pork, eggs,
grain, soy, livestock, and so forth. Actually, one out of every
five jobs in Iowa depends on trade and foreign markets.
Here is the problem. More than two-thirds of all ag exports
are traded with six partners: China, Mexico, Canada, Japan, EU,
and South Korea. They all have the same thing in common: They
allow, for the most part, free trade agreements. And China,
obviously, makes up, dangerously, the largest proportion of all
of these countries combined.
It is clear that we need to establish more free trade
agreements. Opening new export markets will help American
businesses and farmers at the same time to reduce the intense
dependency on China.
So, Mr. Hemminger, my question is this. Having more
customers buying your products with new export markets is
essential. How important is diversification of export markets
to your business?
Mr. HEMMINGER. Well, it is very important. And like I said,
we wish we could send back to Canada the things that we are
producing because they are a big competitor of mine with the
greenhouse business and the vegetable business. So, the
diversified opportunities are very important.
We have consciously made a decision not to be just a grain
farmer. That is just how we are put together. We always grew a
bunch of vegetables for Birdseye, and now we have transitioned
to what we are doing now.
So, to answer your question, I believe that we as a
country, and also to keep ourselves diversified, diversified
crops in many, many different markets is critical.
Mr. FEENSTRA. Yeah. And I wholly agree with you. I mean,
you think about what is happening right now, when we have such
a narrow market group of six, a few more here and there. It is
really worrisome, especially in our commodity markets right
now, of how that changes price when you have one company
saying, ``Hey, I am going to buy X and not buy.''
You talked about Canada. Now you need to think about China,
Phase 1 and Phase 2 trade deals and stuff like that. Phase 1
went through; Phase 2 very little.
Can you just talk a little bit more about that, of when you
see trade markets failing or that just never happens, for
instance, like China? How does that affect your business?
Mr. HEMMINGER. Well, it is real simple: Without markets we
don't survive. Okay? And that is what happened with Birdseye. I
started to see my neighbors and competitors and actually some
cousins leave the business and thought, ``Well, I will be one
of the survivors.'' Well, in the end it didn't matter. They
sold every plant, and they are buying stuff overseas.
But back to your comments about China. I just read this
week one in six bushels of soybeans produced in the world is
used by China. You talk about a centralized market. And
soybeans have become critical to the future, to American ag.
Certainly, you know more about this than I could ever imagine.
Mr. FEENSTRA. Well, no, and you hit it on that. Seventy-one
percent of our soybeans go to China. That is a killer. So, if
they don't buy it, obviously, we are going to get crushed.
And I thank you for your comments on that. I mean, this is
so critical to the American farmer. I just don't hear it from
the administration, how important agriculture is and how
important our exports are. And we have Katherine Tai that is
just sitting on her hands, not doing anything for the ag
community.
One other barrier to new export markets is the lack of cold
chain storage in many of our developing markets. The lack of
cold chain is one of the major barriers in expanding and
diversifying markets in new countries. Each year we lose
billions and billions of perishable food products due to poor
cold chain system conditions.
Mr. Hemminger, could you talk about this? Obviously, you
have dairy. I have a lot of dairy in my district. I also have a
lot of livestock that is perishable, needs to be refrigerated.
How does this affect you also when the cold chain storage is
very weak in a lot of developing countries and how we can
expand on that?
Mr. HEMMINGER. Well, it is just common sense. We have to
have cold chain to maintain all the way to the consumer at the
other end. And without that, food spoils. So, your point is
well taken and very important.
Mr. FEENSTRA. Yeah. Thanks.
Again, we have talked about expanding markets. We need free
trade, but we also need developing countries to look at how we
can handle cold storage. I mean, that, again, helps dairy,
helps livestock, helps all our producers. And, again, this is
all tied in.
And then, finally, I think I have got--if I can see the
clock--I have got a little bit of time left.
Mr. Hemminger, you said this in your testimony: GMOs are
the most important scientific breakthrough in history for the
future of feeding a hungry world of 8 billion people.
We know GMOs are so essential, and yet there are a lot of
countries, like Mexico and others, that are sort of stepping
back and concerned about this. What would you say to those
countries?
Mr. HEMMINGER. There is no scientific base to stand on that
says that GMOs have any concern at all. You can actually find
natural GMOs in our foods that have evolved on their own.
And there is not a question in my mind that as we continue
to go from 8 billion people that we hit last fall in the world,
and they are talking about it being at 9 billion people here in
a bit, that we need science-based technology to feed this
world. And I just hope we have an infrastructure to get the
food around the world to the people that need it.
Mr. FEENSTRA. Well, thank you.
I want to thank each one of you for each of your
testimonies. It is so critical that we expand our export market
and do things, even in the Ag Committee when we have the next
farm bill coming up, with MAP and other areas, that we can grow
to expand our export markets. And it has got to be the number
one thing for me in Agriculture to get done here in the next
farm bill and through our Ways and Means. It is so essential
for this country.
Thank you, and I yield back.
Chairman SMITH. Thank you.
I want to thank every member of our committee. I want to
thank Ranking Member Neal for being here, Republicans and
Democrats, part of a historical hearing where it is, like I
said, they say it is the first outside full committee hearing
in a hundred years, and it is right here in Staten Island.
I also want to thank the Global Containers Terminals here
in New York for hosting it, and also the Port Police and Guards
Union and the International Longshoremen's Association for all
of your support.
And, of course, Representative Malliotakis for hosting it.
We appreciate your hospitality.
Please be advised that members have 2 weeks to submit
written questions to be answered later in writing. Those
questions and your answers will be made part of the formal
hearing record.
I want to thank each and every one of you again as well for
taking time out of your busy schedule and for being here and
sharing some good information.
With that, the committee stands adjourned.
[Whereupon, at 12:34 p.m., the committee was adjourned.]
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