WASHINGTON, D.C. – At a Senate Foreign Relations Committee hearing this morning, Senator Rob Portman (R-OH) expressed concern about the lack of clarity in the administration’s trade policy, urging the Assistant Secretary of State for the Bureau of Economic and Business Affairs, Manisha Singh, to be clear and realistic about the United States’ objectives with our foreign trading partners. Portman also cautioned about the use of Section 232 of the Trade Expansion Act to enforce trade infractions from foreign countries like China. Section 232 is a measure used in conditions of national security, and Portman stressed the fact that misuse could result in trade wars with America’s allies, or loss of the tool entirely. 

A transcript of his remarks can be seen below and a video can be found here:

 

Portman: “Thank you, Mr. Chairman. Ms. Singh on the on the heels of the NATO summit let me start by complimenting your boss. I thought that Secretary Pompeo’s comments about the importance of the alliance, calling it ‘perhaps the most successful and important military alliance in the history of the world’ was appropriate, and I appreciated his speaking out on that. 

“With regard to the issue we have before us today, I think you’ve heard clearly from some of my colleagues already on the broader issue of concern about what will happen both with increased tariffs and higher costs to our consumers and our companies, but also the impact on our exporters. Let me say that, I think, in response to your questions, respectively, you should also talk about the vision that the president laid out at the G-7 summit in June, which was no tariffs. And maybe I was just listening for what I wanted to hear, but what I heard was there was an ultimate vision here of getting us to a world where both tariff and non-tariff barriers are reduced substantially or even eliminated to the benefit of the economies of countries around the world, including ours. I hope that’s the ultimate objective here is to have the United States continue to play the leading role as the country that advocates for more open markets, more transparency, and less corruption. That’s been our historic role over the decades. 

“My concern is, and this is from talking to not just our negotiators, but also to people from some of these other countries, including China and including the EU and Canada, is that we have not laid out clear, realistic objectives as we take on these countries with regard to China, the 301, the 25 percent tariffs on the $34 billion, another $16 billion coming at 25 percent, another $200 billion at 10 percent. So, the Chinese are confused, they’re not sure if it is because we want to see them buy more of our products, which was an objective, I think, which was raised with them, specifically in regard to soy beans and LNG, liquefied natural gas. They’re not sure if it’s the structural changes that you talk about in your testimony, including, as you say, stopping their discrimination against international competition, technology transfer, theft of sensitive intellectual property. They’re not sure if it’s about steel over-capacity, which, for me is a huge issue. Ultimately, what we see around the world is partly a response to China now producing half of the world’s steel when they produced probably 15 percent of it about 15 years ago and therefore having that steel come through transshipment to our country. They don’t know. 

“I think the same is true for the European Union. Recently there’s been discussion with regard to the 232 case, again different than the 301, that it’s about autos. Well if it’s about autos then we ought to be very clear, and I don’t think that 232 is the right tool to use. But to the extent that we have these tariffs in place, we need to be clear and again realistic, in terms of our objectives. Senator Isakson talked about my being in this position and negotiating in the past, and I think it’s clear to all people who have been in that position that without having a clear and realistic negotiating objective, and as compared to that sending mixed messages, it’s very difficult to get to a solution. So I say this to you as the representative of the administration who’s here, knowing you aren’t in direct negotiations, but maybe you could respond to that. Do our trading partners know what our objectives are in regard to these trade cases that we’ve initiated?” 

The Honorable Manisha Singh, Assistant Secretary of the Bureau of Economic and Business Affairs for the Department of State: “Thank you, so much, senator. When it comes to the 232 steel and aluminum tariffs, we are having many bilateral conversations, as you may know. There are some countries who we have come to an agreement on quotas. There are other countries where we had a conversation and we were not able to come to an agreement. So we are talking to countries very individually and helping them understand what we would like to see achieved.” 

Portman: “And that’s an interesting response because it’s true in regards to some countries, we have been able to negotiate something. With regard to others, some of our strongest allies, including Canada, Mexico, and the EU we have not, and I’m not sure they know why. With Canada we’ve talked about their dairy program. By the way, that doesn’t fit within the national security criteria, but if that’s it, we should be clear. With regard to the EU, we’ve talked about the auto issue, and with Mexico we’ve talked about potatoes being able to be sold in the interior or state-owned enterprises. But I’m not sure from what I’m hearing from them that they understand what the objective is. NAFTA, of course, is the broader issue but again not a 232 issue. 

“Mr. Chairman, I see my time is expiring. I would just like to submit for the record some thoughts about 232. I believe that the entity that is best capable of determining what’s in our national security interest is the Department of Defense, and I believe the statute could be changed to do that. I believe there ought to be a tightening of the criteria so we understand what national security is using the CFIUS and joint chief’s definition. I believe that the disapproval, which is already in the legislation could be brought into all products, not just oil. I think there are things we could do to ensure that going forward we don’t misuse 232 because my concern is that we will lose the tool. We will lose it because one of two things will happen. Either other countries will respond in kind, as we’re starting to see, without showing injury, without showing any unfair trade. Or, we’ll go back to the WTO as we have been in the past and this time we will find ourselves losing an Article 21 case with regard to 232 because of the way we’ve used it so broadly. Thank you, Mr. Chairman for your indulgence, and I appreciate your testimony today Ms. Singh.” 

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