[Congressional Record Volume 165, Number 86 (Wednesday, May 22, 2019)]
[Senate]
[Pages S3039-S3041]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                                 Trade

  Mr. PORTMAN. Mr. President, I am here on the floor today to talk 
about international trade. It is a very complex issue, but also a 
really important issue to our country. Our goal with trade should be 
pretty simple: It is to level the playing field for America's workers, 
America's farmers, and America's businesses.
  One, we have got to be sure they are not hurt by unfair imports 
coming into our country, so that is really a fairness issue and a trade 
enforcement issue.
  Second, we should expand our exports. Opening up more foreign markets 
to our products is great for America. That is the balance. As a trade 
lawyer and as the U.S. Trade Representative in the George W. Bush 
administration and as a member of the Finance Committee, which has 
jurisdiction over these issues, I have worked on the trade matters 
quite a bit. It is really important to my home State.
  Ohio has products that are manufactured by workers and crops grown by 
our farmers that are shipped all around the world. In fact, in Ohio, 1 
of every 3 acres is now planted for export. So our farmers are 
dependent on trade, and 25 percent of our factory workers--
manufacturing workers--have their jobs because of exports. Twenty-five 
percent is a big part of our manufacturing economy.
  These jobs aren't just good for Ohio's economy. They are great for 
the people that have them. Trade jobs pay, on average, 16 percent more 
than other jobs, and they have better benefits, so we want more of 
these jobs.
  With 95 percent of the world's population living outside of our 
country, we want to sell more of our stuff to the rest of the world to 
continue to grow and maximize the potential of our economy. So in my 
State and a lot of others, manufacturing and ag jobs that are the 
bedrock of our economy depend on balanced trade. That goes for our 
trading partners around the world, but particularly for our two biggest 
neighbors: Mexico and Canada. They are, by far, Ohio's biggest trading 
partners.
  Since 1994, we have linked our economy to Mexico and Canada in the 
form of the North American Free Trade Agreement, or NAFTA. In 2018, 
Ohio shipped 39 percent of our exports to Canada, more than twice the 
national average. Along with our trade with Mexico, this accounted for 
$20 billion in trade. In all, trade with Mexico and Canada now supports 
450,000 jobs in Ohio. So it is important.

  We all know that the existing agreement--again, called NAFTA--has to 
be updated. It is 26 years old. It needs to be modernized. It needs to 
be improved. We need to be sure that we are doing a better job of 
leveling that playing field that we talked about and be sure that we 
are reflecting the nature of the 21st century economy.
  Think about it. Back when NAFTA was negotiated, there was no digital 
economy. So we need to have new rules with regard to digital economy, 
as we do in our more recent trade agreements.
  Also, as an example, there were no biologics. So we have no 
protections in the NAFTA agreement for biological pharmaceuticals. Of 
course, we need to have that in the new agreement, but it is more than 
that. Labor standards and environmental standards that have been in all 
of the more recent trade agreements need to be incorporated into the 
NAFTA agreement. There are lots of reasons for us to update the North 
American Free Trade Agreement and to improve it. Although no trade 
agreement is perfect, the new USMCA does those things.
  By the way, according to a recent study by the Independent Trade 
Commission, the new USMCA, which is used to replace NAFTA, is estimated 
to raise wages and add 176,000 jobs to the U.S. economy. That is good. 
I support this U.S.-Canada agreement, or USMCA.
  Last week, President Trump and his administration took a major step 
toward realizing the USMCA by announcing they would be lifting the so-
called section 232 steel tariffs on steel and aluminum coming from 
Mexico and Canada. This is really good news. It is something I had 
advocated for, as had others, in order for us to pass the USMCA here 
but also to be sure that other countries--Canada and Mexico--could 
ratify the USMCA.
  It ends the retaliation by Mexico and Canada on Made in Ohio exports 
to our northern and southern neighbors. This was really starting to 
bite in my home State and around the country.
  By the way, it also protects against import surges and 
transshipments, particularly with regard to steel and aluminum. We 
worry about transshipments coming from China into

[[Page S3040]]

countries like Mexico and Canada and then being shipped or sneaked into 
the United States. You don't want that. That protection is in there as 
well. I think this was a good agreement.
  Tariffs, especially on our allies, ought to be something we try to 
avoid--used tactically, sparingly, and targeted as to when we are going 
to use them.
  There has been a lot of talk recently about the use of these section 
232 tariffs by the administration not just on steel and aluminum but 
also with regard to automobiles and auto parts. Section 232, the law 
that this will be done under, is really an exception to our trade laws. 
Our trade laws say that if you unfairly trade with us--in other words, 
if you subsidize your products overseas or if you dump them, meaning, 
you sell them below their cost--then that is illegal, and we get to 
retaliate by adding tariffs to your product.
  We also have laws that say if there is an import surge that domestic 
industries are substantially harmed by, that is a time for us to step 
up. But our other trade laws require one of those two things: either a 
finding of injury to a U.S. industry or some kind of unfair trade.
  Under section 232, which is an exception to that, you don't have to 
do that. You can block imports simply by saying it is a national 
security issue.
  It is a pretty powerful thing that the executive branch has, but it 
has been used very infrequently, and that is how Congress intended it. 
Congress intended it just to be used for true national security 
purposes.
  The agency in charge of investigating these 232 tariffs is the 
Commerce Department. A recent Commerce Department investigation 
concluded that imported automobiles under the 232 criteria would be a 
national security threat. I think that is not accurate. I think 
minivans from Canada, as an example, aren't a national security threat 
to us. It may be that if they are unfairly traded, then we should 
enforce our trade laws. It may be that if there is an import surge that 
hurts our domestic industry, then go after them. But I think to use 
this tool in that sort of way is not appropriate.
  That is why, over the past 50 years since this has been in effect, 
the section 232 tool has been used only a few times. In fact, it hasn't 
been used in the last 33 years.
  One President tried to use it--George W. Bush, for whom I worked--and 
his Commerce Department said: You know, that is not a national security 
issue. So he used another trade provision that, again, required that 
you showed material injury to a domestic industry. That is the 232 
issue.
  I think it is important to have the tool. I think if it is a true 
national security concern, it is good to have it in the toolbox, and we 
ought to be able to use it. But we have to be judicious about it and 
not misuse it.
  One reason to be careful is if you were to impose tariffs on cars and 
automobiles, as the Commerce Department has said you could do, it would 
really cost U.S. consumers and businesses.
  First, on average, U.S. cars would cost about $2,000 more, and I am 
told that is a conservative estimate. We don't want that.
  Second, if you put these 232 tariffs on cars and auto parts with no 
fairness rationale, the retaliatory tariffs on our exports would be 
swift and painful.
  Finally, if you misuse this 232 tool, I think you risk losing it 
altogether.
  The World Trade Organization might not have too much influence these 
days, but they do have the ability to say whether something is legal 
under international trade rules. They have an exception for these 
national security waivers, but not if they are misused. So I think we 
have to be careful about how we use it.
  President Trump and his administration made a decision over the last 
several days that I applaud them for. They decided not to move forward 
on these 232 tariffs against auto parts and automobiles. They decided 
to put it off for 6 months. I commend them for that.
  Again, I hope we would never go there, but I think it is really 
important that we put that off for 6 months so that we can get not just 
the U.S.-Canada-Mexico agreement accomplished but so that we can also 
focus on other things, specifically, our issues with China.
  I recently introduced a bipartisan bill on section 232. It is a 
commonsense approach that says: Let's be sure we are going under the 
original intent of section 232, that we are not misusing it. It is 
really simple. It says that instead of having the Department of 
Commerce make the decision, it should be the Department of Defense. The 
Department of Defense has the expertise to determine whether something 
is a national security issue.
  With regard to the recent decisions on these 232 tariffs, the 
Department of Defense did not agree with the Commerce Department and 
thought that it was not a national security concern. They said that 
explicitly with regard to steel and aluminum, as examples. I just think 
the men and women who are hired to protect our country ought to be the 
ones who decide whether that is a national security threat.
  Second, our legislation increases Congress's oversight here and 
allows for Congress to have an expanded role, to provide a legislative 
path for Congress to disapprove one of these 232 tariffs decisions if 
we think it is the wrong way to go. I think it is important to bring 
some of the power back to Congress, where it resides in the 
Constitution.
  I hope my colleagues on both sides of the aisle will help us with 
this commonsense legislation and avoid the misuse of section 232 on 
issues like autos and auto parts.
  Again, in the meantime, the administration has made the right choice 
by delaying the imposition of these 232 tariffs on longtime allies with 
regard to autos and auto parts.
  As I said earlier, balanced trade is about enforcement, being sure 
that it is fair in terms of what imports are coming into this country 
for our workers, for our farmers, and for our service providers.
  It is also about exports. Do you know what? Because of that goal of 
balanced trade, I support what the Trump administration is doing vis-a-
vis China. Unfortunately, when you look at what has happened to our 
relationship with China, we have more and more reasons to say that 
China is not playing by the rules.
  China needs to make structural changes in our trade relationship in 
order for us to have that level playing field we talked about earlier. 
Right now, this U.S.-China economic relationship lacks equity, balance, 
and fairness. It also lacks durability.
  The big trade deficits and the structural problems we have can't 
last. To put it simply, China is not playing by the rules.
  First, they unfairly subsidized their exports. We talked about this 
earlier, but it is not fair for another country to say ``We are going 
to use government money to subsidize what we send to the United 
States,'' and then have our workers and our farmers have to compete 
with that. Subsidies are unfair under international rules and under our 
trade laws.
  China does it in a number of ways. One, they have a bunch of State-
owned enterprises, and they have actually expanded their State-owned 
enterprises at a time when it looked as though China was going the 
other way, that they were going to have a more market-based economy, 
where the government wouldn't be controlling industries. But they have 
also committed massive subsidies to some of their favorite industries, 
companies, and technologies.
  Second, China doesn't grant reciprocal access to U.S. investors and 
engages in coerced technology transfer in intellectual property theft 
from U.S. companies. Often, that intellectual property or technology 
then goes to a Chinese company.
  To be clear, as a condition of doing business in the huge Chinese 
market, U.S. companies regularly have to hand over their intellectual 
property, their technology, and their innovations, like manufacturing 
processes, let's say, or blueprints, designs, trade secrets, and other 
things of value. Then, typically, a Chinese competitor uses these 
advantages to compete against U.S. companies. Again, that is just not 
acceptable.
  I encourage you to check out the administration's section 301 report 
on USTR.gov. Go on USTR.gov, and you will see the section 301 issues 
that are laid out in that report. If you want to learn more about it, 
it is pretty clear.

[[Page S3041]]

  Let me give you an example of how this technology transfer works. If 
a U.S. automaker wants to make cars in China--and a lot of them have 
wanted to and have made them there--China requires joint ventures in 
order to gain access to production technology that then helps foster 
China's own domestic auto industry.
  In a number of businesses, China requires a 51-percent Chinese 
partner in a joint venture. Again, that is one way that technology 
transfer happens.
  At first, China's foreign investment catalogue encouraged--that was 
the word--foreign auto investment. I was in China back in 1984, I 
believe it was--maybe 1985--at a Jeep plant. And I watched the first 
American vehicles go off the production line in China. I was there. I 
saw it. It was very positive. People were thinking: This is 
interesting. We are going to do business with China. Those Jeeps can 
then be sold in China and sold in other parts of Asia. It wasn't going 
to compete with the U.S. market. This was good for Jeep and good for 
China. That was at a time when they were encouraging foreign auto 
investment. But as China learned about auto manufacturing from these 
investments--in other words, they got knowledge about how to 
manufacture automobiles themselves--the foreign investment catalogue 
changed its position on auto investment from ``encouraged'' to 
``permitted'' and then, more recently, in 2015, to ``restricted.''
  Again, this is an evolution, initially, bringing in a joint venture 
partner and getting the technology. It goes from ``encouraged'' to 
``permitted'' and then finally to ``restricted'' now that China has 
that technology. That is kind of leapfrogging us, isn't it? Again, that 
doesn't seem fair, and it certainly is not reciprocal because we don't 
do the same thing here in this country.
  This problem of fueling Chinese innovation with the hard work of U.S. 
companies is even more pronounced in the electric vehicle sector. 
There, China tries to incentivize the production of vehicles in China 
rather than imports from overseas. We would love to sell American 
electric cars in China, but they prevent this with a combination of 
things: tariffs, which are relatively high; subsidies for domestically 
produced electric cars; and a credit system that requires all 
automakers selling in China to produce a portion of their electric 
vehicles in China or face penalties. Again, we don't do that.
  It is clear from this experience that China's unfair trade practices 
are at odds with the current rules-based, multilateral trading system.
  I will continue to support the administration's efforts to increase 
pressure on China in order to reach a strong but fair and enforceable 
agreement. I argue that this is in China's interest, as well as in our 
interest. They are now a mature trading partner. They are now the 
greatest exporter in the world. They have an economy that is growing--
again, more sophisticated, more technology. They should want to protect 
their own intellectual property. They should want to be engaging with 
us and other countries around the world on a more fair basis.
  While I urge the United States to hang tough, the administration 
should work quickly to try to bring these negotiations to a close 
because a combination of the retaliatory tariffs on U.S. exports and 
tariffs on Chinese consumer products here in America is causing pain 
for our farmers, for our workers, and for our service providers. So it 
would be good to bring these negotiations to a conclusion.
  We were very close to doing that only a few weeks ago, and the 
reports back were that China had changed its view on some of the 
concessions they were willing to make. Let's get back to the table, and 
let's make a fair and enforceable agreement.
  As part of increasing pressure on China, as the new tariff increases 
are designed to do, the United States must also better leverage our 
allies. The European Union, Japan, Korea, Canada, Australia, not to 
mention Vietnam and lots of other countries in Southeast Asia--all 
share our concerns that the administration has raised with regard to 
China. They are all experiencing the same thing. Leveraging our allies 
helps put pressure on China by demonstrating the broad consensus that 
exists among those who believe China often acts contrary to our rules-
based, multilateral trading system.
  When I was U.S. Trade Representative, I laid the groundwork for a 
number of successful World Trade Organization complaints against China 
by working with our allies. Key to our victory in those cases was our 
ability to rally and to kind of come up with a posse--the EU, Canada, 
Mexico, Japan, and other countries--to show China that the world was 
watching and cared. The administration's work with the EU and Japan on 
WTO reform and subsidies, right now, is a good step in the right 
direction. It shows how much is possible when we can rely on our 
friends and, therefore, gain more leverage. It is why it is important 
we don't adopt policies that actively undermine our ability to work 
with allies also.
  That is another reason I was glad to see the administration delay any 
tariffs pursuant to this 232 we talked about on automobiles and auto 
parts. A lot of those 232 tariffs would have been imposed on our 
allies. Not only do autos and auto parts from our allies or anywhere 
else in the world not threaten our national security, but it also 
invites retaliation on U.S. exports and poisons the well of good will 
we need with our historic allies as we pursue a resolution of our 
differences with China.
  Let me end where we started--about balanced trade. All America needs 
is a level playing field. We can compete. We have the ability to 
innovate. We have the ability to be flexible. We have a lot of 
advantages in this country, but we do need a level playing field. All 
we ask for is fair and reciprocal treatment from our trading partners. 
The sweet spot for America is that balanced approach--again, opening up 
new markets for U.S. products while insisting on trade enforcement so 
that our workers can compete.
  As we talked about today, right now, we have a lot of balls in the 
air in relation to trade. This has caused some uncertainty among our 
trading partners, with American businesses, workers, and farmers that 
rely on trade. I get that.
  Let's prioritize passing USMCA with Canada and Mexico. That will 
provide some certainty. Let's support the administration in bringing 
home a strong agreement with China. That will provide a lot of 
certainty. And let's not impose new section 232 tariffs. That will also 
provide some certainty and predictability.
  With that predictability and certainty further leveling the playing 
field, we can help American farmers, American workers, American 
businesses, and our economy.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. CRAMER. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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