U.S. Trade Representative Robert Lighthizer told Senate appropriators Thursday it could take years to get China to change trade policies that he says undercut U.S. businesses. But he added that the Trump administration’s aggressive push for change in Beijing will eventually result in better deals for American companies.
While Lighthizer defended the administration’s tariffs action on Chinese imports, lawmakers on the Senate Commerce-Justice-Science Appropriations Subcommittee pressed for quicker action to open up additional export markets for U.S. products.
The panel, which has oversight over the U.S. trade representative’s budget, called Lighthizer in to explain the administration’s trade strategy and to underscore the fallout from tariffs in their states. The subcommittee is just the latest in a string of congressional panels that have held a hearing on the consequences of the administration’s tariff regime.
Committee members said their business constituents want to know when the U.S. will end its Section 301 tariffs on Chinese imports that triggered matching retaliatory duties on U.S. exports. Lighthizer said he could not give them an end date. The administration, he said, sympathizes with businesses harmed by China’s retaliatory response, which he called “unjustified.” The goal, said Lighthizer, is for U.S. companies be free to compete in China.
“There are an awful lot of small businesses suffering from unfair treatment (by China),” Lighthizer said.
Sen. Brian Schatz sparred with Lighthizer over the wisdom of U.S. tariffs on Chinese imports that are economically harming some U.S. industries. The Hawaii Democrat said the administration has correctly identified the problems but picked “stupid fights” with a state-run economy that can withstand extended economic pain. Essentially, Schatz said, China would outwait the United States in a game of tit-for-tat tariffs that harm constituents and make politicians squirm.
“It seems to me we’re playing chicken with China,” Schatz said.
“If your conclusion is that China taking over all of our technology and the future of our children is a stupid fight, then you are right, we should capitulate,” Lighthizer responded with his voice rising. “I don’t think it’s a stupid fight … to say that China should not be able to come in and steal the future of American industry.”
The Commerce Department slapped a 25-percent tariff on imported steel and a 10-percent tariff on imported aluminum in April, while earlier this month USTR imposed $34 billion in tariffs on Chinese goods under Section 301 of the Trade Act of 1974. Another $216 billion in similar duties is still pending.
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No aid for lobsters
Maine Republican Sen. Susan Collins said the lobster industry in her state saw sales to China plummet after it levied higher tariffs on U.S. seafood. The industry is also worried about another trade blow because of a recent trade deal between Canada and the European Union. Under the agreement, Canadian lobster can enter Europe duty free while U.S. lobsters face tariffs of 8 percent to 30 percent.
“When you combine what’s happening with Canada with the retaliation by the Chinese, my lobster industry is saying to me, ‘How are we going to survive while the administration works out its long-term plan?’ ” Collins said.
Lighthizer said Wednesday’s agreement between the U.S. and the EU may rectify that.
“The good news is that is something we can now focus on in our talks with Europe. It is something very much on our minds. I do think there is hope on the European side in the not too distant future that we can rectify that,” Lighthizer said, referring to a deal struck between President Donald Trump and European Commission President Jean-Claude Juncker to defuse the trade fight while the two sides work out their differences. U.S. steel and aluminum tariffs will remain in place as will the EU’s retaliatory tariffs.
Ranking Democrat Jeanne Shaheen of New Hampshire and Alaska GOP Sen. Lisa Murkowski noted that the Agriculture Department announced a $12 billion aid package for farmers and ranchers adversely affected by retaliatory tariffs by China, Canada, Mexico and the EU. Shaheen wanted to know if small businesses harmed by tariffs could also expect federal assistance, while Murkowski asked if commercial fishers like those in Alaska could qualify for USDA help since Alaskans consider them “farmers of the sea.”
Lighthizer said he was not an expert on the nuances of the USDA program and that he has not heard of an aid package for nonagricultural businesses.
Chairman Jerry Moran said the hearing allowed members to deliver several messages to the Trump administration: “We hope USTR takes it to the full administration. We’ll have another hearing with Commerce officials involved in trade.” The Kansas Republican said that hearing will likely occur in August.
Lighthizer told the committee that U.S. industries would eventually be helped by revisions to existing trade deals as well as new agreements his office is pursuing. He said a revamped North American Free Trade Agreement with Mexico and possibly Canada could be ready by the end of August “if everyone is reasonable.”
He said Mexico appeared more amenable to reaching an agreement with the United States and that talks will resume soon. He was scheduled to meet Thursday with trade representatives of the current Mexican president, who leaves office Dec. 1, and of the incoming president.
The United States is also eyeing the possibility of trade negotiations with the Philippines and something short of a full trade pact with Japan to address specific areas of U.S. concerns.