Chairman (00:00):
The larger policy, the real headline then becomes the fundamental shift in trade policy since President Trump's inauguration where the United States now actually plans to do trade again. My colleagues and I in Congress want to pursue a real trade policy. That was put on hold during the Biden years. We now have a president who will partner with us in that effort, and together we will enforce our rights, we will negotiate again, and we will expand opportunities for Americans. This administration is not deliberating endlessly over whether trade can be a force for good, like the past administration, which refused to even engage in bipartisan or bilateral market access trade negotiations. Trade today is the centerpiece of our international economic engagement, and we have plenty of substantive trade ideas to discuss. Businesses want certainty from good policies that will continue so that they can invest confidently in prospects that create jobs and wealth. That is one of the primary reasons that I'm working hard to make the Trump tax cuts permanent to provide businesses with the certainty they need to make long-term investments to drive growth and increase prosperity across all segments of the economy.
(01:22)
Contrast this kind of certainty and forward-thinking on trade with that of the last four years where the only certainty was that you were going to lose ground because your government fundamentally rejected free markets, free enterprise, and free trade. The last administration turned to industrial policy because it was certain that the free market failed in delivering what government planners believed was necessary for climate and social agendas. Indeed, China's central planners saw their own strategic thinking in the inflation reduction acts approach of bestowing massive subsidies to stimulate investments that the market would not. We can restore faith in free markets by making it easier than ever to do business in America. The president's executive order last week to assist major investors to navigate our regulatory system efficiently is a good start. We plan to do more. The Biden administration provided us with only the certainty that in the face of a foreign government's discriminatory policies like digital service taxes, data localization, or other non-tariff barriers, it would not stand up for its citizens because it believed that the so-called right to regulate trumped the principle of free enterprise.
(02:45)
Respectfully, democratic governments do not have rights, they exist to secure rights for their citizens. One immediately welcome change under the Trump administration appeared last week in the USTR's National Trade Estimate. Last year the Biden administration deliberately cut from the estimate a number of discriminatory measures imposed on America by foreign governments because it sided with those governments over our citizens. This year's estimate is exhaustive because the administration carefully identified all of the ways that Americans lose out in the global marketplace. Finally, the validity of free trade will be seen again. The last administration did not pursue market access in its negotiations. Instead, it demanded governments to undertake a number of social and environmental commitments, even ones Congress did not approve of domestically.
(03:47)
Not surprisingly, our partners did not put their trust in such negotiations. While tariffs inherently may be seen at odds with free trade, we must also acknowledge that many of our trading partners deploy barriers that have gone unchallenged for too long. Free trade, by definition, must be reciprocal. We do not have it if others can impose barriers on us unchallenged. Our failure to enforce our rights over the last four years lost a lot of ground for us. This cannot continue because what I am certain about is that American goods and services are innovative, high quality, and globally competitive. Senior administration officials say that a number of countries are coming to the table to engage with the USTR. We look forward to hearing about this engagement and the steps toward better opportunities for Americans. With that, I turn to Senator Wyden for his remarks.
Mr. Wyden (04:45):
Thank you very much, Mr. Chairman. Mr. Chairman and colleagues, today's hearing on the president's trade agenda begins with American retirement funds, investors, and our economy in purgatory thanks to Donald Trump's plan to hike tariffs to levels not seem since before the invention of the automobile. Prices are continuing to increase. Markets for made in the USA products are slamming shut around the world. The US economy has gone from the envy of the world to a laughing stock in less time than it took to finish March Madness. Through it all, Donald Trump and his advisors have yet to provide a understandable explanation, any explanation for what his tax hike on the American people is supposed to accomplish. And so this morning I'd like to focus on one central question, what is the plan?
(05:53)
In the last week, the White House has been all over the map when it comes to this question. There is no clear message of how the tariffs were determined, what they're supposed to accomplish, how long they'll be in place, whether they're a negotiating tool or a move to try and cut the United States off from global trade and usher in a new era of 1870s style protectionism. In the days since Donald Trump announced his tariffs, the president and his advisors have repeatedly changed their stories on all of these questions. Last Thursday, Donald Trump said quote, "The tariffs give us great power to negotiate." Just after Secretary Lutnick and a top economic advisor told reporters, "The tariffs were not up for negotiation." Then the stories changed again on Sunday when the Secretary of Agriculture and the top White House Economic Advisor, Kevin Hassett, both said, "Trump's tariffs were bringing foreign countries to the table, hoping to negotiate new deals to cut tariffs."
(07:01)
At nearly the same time, the Treasury Secretary was on TV Sunday saying the tariffs would remain in place for quote, "Days and weeks." Asked if the tariffs were up for negotiation, the Commerce Secretary said Sunday, "The tariffs are coming." He announced it and he wasn't kidding. The tariffs are coming. And yesterday in the Oval Office, Donald Trump said, "There can be permanent tariffs and there can also be negotiations." So again, this morning what we want to know is what is the plan? The stock market is up a bit this morning on yet another round of rumors that Donald Trump might not go through with his full barrage of tariffs. Yet this weekend, Donald Trump retweeted a post on Truth Social arguing that Trump is crashing our economy and markets on purpose as a strategy to lower interest rates. Is it possible that's the plan, tank the economy so wealthy people can borrow money more cheaply? We know that billionaires like Howard Lutnick and semi-billionaires like Scott Bessent won't mind paying more for groceries or gas. It's a drop in the bucket for them. But for families, higher costs are going to hurt.
(08:20)
The nonpartisan Yale Budget Lab predicts the tariffs will cost families $3,800 in the first year alone. In Mr. Greer's confirmation hearing, he argued that economic security leads to strong national security. Our country is getting the opposite with these pointless tariffs. Destroying the foundations of our economy is not only disastrous for workers and families, it makes our people less safe. So you look at Stellantis, the auto company laying off 900 workers in response to the tariffs. I talked to Pacific Northwest fruit growers are being told no more American exports. And I hear from small businesses in Oregon that they'll have to pay more for the materials they use to make their products. And I worry that Americans will soon be poorer and face greater threats to our national security thanks to these Trump policies. Is that the plan?
(09:14)
Colleagues, I'm going to close with this, the Trump aimless chaotic tariff spree has proven beyond a doubt that Congress has given far too much of our constitutional power over international trade to the executive branch. It is time to take that power back. On a bipartisan vote, 51 senators sent that signal last week by stepping in and passing legislation to lift Trump's reckless tariffs on Canada. Well, now Donald Trump has slapped tariffs on about 180 countries, and this is a big unforced error that requires a big response. So let me close with this announcement. Today, I am proposing a new bipartisan privileged resolution to end the latest crop of global tariffs that are clobbering American families and small businesses. Members on both sides of the aisle ought to know that this is a call to action and Congress must step in to reign this president on trade. Thank you, Mr. Chairman.
Chairman (10:22):
Thank you, Senator Wyden. And Ambassador Greer, you may now make your statement.
Jamieson Greer (10:29):
Thank you, Chairman Crapo, Ranking Member Wyden and members of the committee. I appreciate you taking the time today for this hearing. Last Wednesday, president Trump declared a national emergency in response to the large and persistent trade deficit that has built up in recent years. This deficit is driven in part by non-reciprocal tariffs, trading barriers, and other economic policies pursued by our foreign trading partners. This situation is urgent. President Trump imposed tariffs to address this emergency and these measures are aimed squarely at achieving reciprocity and reducing our massive trade deficit to [inaudible 00:11:02] production in the United States. This national emergency declaration and tariff action is the most significant change in US trade policy since we allowed China to join the World Trade Organization. The American working class in particular has suffered concentrated losses from the so-called China shock and other adverse effects of past trade policy and the conditions that give rise to this massive trade deficit.
(11:25)
You've heard some of these numbers before. The United States has lost 5 million manufacturing jobs in 90,000 factories since 1994. President Biden left us with a 1.2 trillion trade deficit in goods, the largest of any country in the history of the world. The United States share of world manufacturing output declined from 2001 to last year. In the fourth quarter of 2024, US manufacturing as a share of gross domestic product was the lowest it had been in 20 years. During COVID, we were unable to procure semiconductors to build our cars or materials for pharmaceuticals and personal productive equipment. During World War II, we built nearly 9,000 ships. Last year, the United States built only three oceangoing vessels. Our agricultural trade balance, which historically resulted in trade surpluses for our farmers was in deficit the last two years of the Biden administration and likely will take some time to recover. These are all serious indicators of an economic and national security emergency and we can't ignore it.
(12:24)
One important driver of these negative trends has been unfair, unbalanced, and non-reciprocal trade. This includes the effect of higher tariffs imposed by other countries on the United States. The effect of non-tariff measures that promote other countries exports and obstruct US exports and other foreign economic policies favoring overproduction, and degrading America's manufacturing capacity. And the lack of reciprocity is an important driver of our global trade deficit and with particular countries, so it's common sense to focus on these indicators. For example, the European Union can sell us all the shellfish they want, but the EU bans shellfish from 48 states. The result is a trade deficit in shellfish with the EU. We only charge a 2.5% tariff on ethanol, but Brazil charges us an 18% tariff. The result, we have a large trade deficit in ethanol with Brazil. Our average tariff on agricultural goods is 5%, but India's average tariff is 39%.
(13:19)
You understand the trend here. Our trade deficit driven by these non-reciprocal conditions is a manifestation of the loss of the nation's ability to make, to grow, to build, and the president recognizes the urgency of the moment. On the first day of the second term, President Trump issued a comprehensive memorandum setting out his trade policy directive. And over the past 10 weeks, he has executed on nearly all of these priorities. He has tightened tariffs on steel and aluminum. He's imposed new measures on auto and auto parts not made in the United States. And on April 2nd, the president declared the national emergency that we've discussed. And so the president has imposed a reciprocal tariff along with a global baseline tariff to achieve reciprocity with other countries and to drive the dangerous deficit down.
(14:02)
And the president's strategy is already bearing fruit. Over the past few weeks, a planned layoff for an auto production shift in Tennessee has been suspended. Another automaker is hiring additional employees and expanding overtime to increase auto production in Indiana. Companies have announced $4 trillion in new investment in the United States. Nearly 50 countries have approached me personally to discuss the president's new policy and explore how to achieve reciprocity, and they've spoken with many members of the administration. Several of these countries such as Argentina, Vietnam, India, and Israel have suggested that they will reduce their tariffs and non-tariff barriers in line with the president's policy. And these obviously are welcome moves.
(14:39)
Our large and persistent trade deficit has been over 30 years in the making and it will not be resolved overnight. But all of this is in the right direction, particularly as we start to negotiate with these countries, we must move away from an economy that's based solely on government spending and the financial sector. And we must become an economy based on producing real goods and services that provide jobs for working class and middle class Americans in their communities. This adjustment may be challenging at times and in a moment of drastic overdue change, I'm confident, I'm certain that the American people can rise to the challenge as they've done before. I appreciate this committee's interest in President Trump's trade agenda. I'm glad we're talking about this, that's created debate. And we may not agree on everything, but I know that you want to do what's best for America, so does the President and so do I and we'll collaborate together on this. Thank you again for your time and I look forward to our conversation.
Chairman (15:31):
Thank you, Ambassador. Yesterday, Secretary Bessent stated that you and he both will lead trade negotiations with Japan. I'm very pleased that President Trump has decided to press for market access in this case. I hope we'll see more negotiations that press for zero to zero barriers. But could you explain a little bit, what is the scope of these negotiations?
Jamieson Greer (15:56):
Certainly. Thank you, Chairman. So as you know yesterday, the president directed Secretary Bessent and myself to interact with the Japanese. We've already been having several conversations with them over past weeks, so this is not a new development, but we are taking it to a new level. Obviously, we want to have more market access in Japan. For us, we feel like we could have more and better agricultural market access. There are also structural impediments to some of our industrial goods in terms of standards and regulations and that kind of thing. I also think that there are things we can do with our trading partners, things that aren't always purely in the trade sector with respect to economic security, whether it's export controls alignment or investment screening alignment or energy, making sure that our partners are tied up with us with respect to liquified natural gas and other resources as opposed to being dependent on other countries that may not be as friendly. And so I think all of these factors will go into these discussions with Japan in the coming weeks.
Chairman (16:53):
Well, thank you. And as you indicated in your testimony, you've been approached, the administration or you have been approached by about 50 other countries already. I assume that the objective in these approaches, and I assume that there will be discussions and negotiations with them, but first could you verify that is the objective here to engage in market access negotiations with these countries?
Jamieson Greer (17:21):
Chairman, as these countries approach us, the idea is that we've had years and years of non-reciprocal access and it's contributed to these trade deficits. As the countries come to approach us, what we've told them is, "If you have a better idea to achieve reciprocity and to get our trade deficit down, we want to talk to you, we want to negotiate with you." And it goes both ways. Sometimes they have exports to us that are driven by subsidies and unfair trading practices, and then obviously they have non-reciprocal treatment on their end where they block our exports, sometimes through prohibitive tariffs, quotas that are not administered in the appropriate way, or other unfair trading practices. So these are the kinds of things that should be targeted. And I don't want to prejudge the negotiations, but if they're able to provide an alternative plan that can further these objectives, I think we're open to that.
Chairman (18:09):
Well, thank you. The America First Trade Policy memorandum rightly tasked the USTR to review China's compliance with the phase one agreement. Under the agreement, China is obligated to purchase more US goods and change basic practices and laws, the so-called structural commitments. The prior administration refused to discuss whether China complied with its structural commitments. And by the way, these were commitments made in response to tariffs in President Trump's first presidency, correct?
Jamieson Greer (18:40):
That's right.
Chairman (18:42):
What is your analysis of China's compliance with the structural commitments that it made in phase one so far?
Jamieson Greer (18:48):
Our assessment chairman is that in the initial stages of implementing the agreement, China made significant movement to make these structural changes, whether it was with respect to agricultural rules, financial services, or IP. We found during the Biden administration there was little enforcement and little communication and that the Chinese did not comply with this agreement in large part. I've had a call with my counterpart, I've communicated to him our feeling on this, that they have not complied with the agreement. And I think we're disappointed by this. It's not surprising, but we are certainly disappointed by that.
Chairman (19:24):
And now you're engaged to, again, see if we can get compliance?
Jamieson Greer (19:30):
We will see. The Chinese obviously have agency in this. It's not just a matter of US policy. We of course welcome and we hope that foreign countries will change their practices to make sure that they're fair and we look forward to continue to monitor that situation.
Chairman (19:45):
Thank you. The administration has announced its negotiating an agreement also with India, and it appears already to be yielding results such as India dropping its digital services tax. Although India has high tariffs, its non-tariff barriers are just as significant, if not more so. Will you try to include commitments on matters such as intellectual property, technical barriers to trade, and science-based agricultural rules to take on those barriers?
Jamieson Greer (20:14):
Yes, and I have a standing call with my Indian counterpart to address these very issues.
Chairman (20:20):
All right, thank you. Senator Wyden.
Mr. Wyden (20:23):
Thank you. Thank you very much, Mr. Chairman. I saw at page four of your testimony, Mr. Greer, you said the president's strategy is already bearing fruit. Well, I can tell you for a lot of Oregonians who have 401(k)s that are being drained out, that's pretty rotten stuff. And you ought to realize how serious this is for the country. Now everybody in the administration practically has a different story about the Trump tax hike. So I'm interested in knowing what the story is today. Will higher tariffs go into effect tomorrow as announced?
Jamieson Greer (21:00):
Senator, yes, they're scheduled to go into effect. We are having negotiations with all kinds of countries at this time. The president's fixed in his purpose. The nature of the emergency that I discussed earlier is not something we can wait on anymore. So we will have the president's plan go into effect, and we're coupling that with immediate negotiations with our partners as they seek to-
Mr. Wyden (21:21):
It's not a question is something being scheduled, you're committing this morning that they're going to go into effect?
Jamieson Greer (21:27):
This is what the president has said, Senator, yes.
Mr. Wyden (21:29):
How many countries? I understand it's over 50.
Jamieson Greer (21:33):
That are negotiating with us?
Mr. Wyden (21:34):
Yeah.
Jamieson Greer (21:35):
We have about 50 that have come to speak with us, and I'm constantly talking to my counterparts. I have staff right now at USTR meeting with others, and we will have the tariffs in place. And if the other countries can come to agreement on reciprocal trade, then that's something that the president can consider. I don't want to prejudge the negotiations or the president's decision, but that's what we're doing.
Mr. Wyden (21:55):
Now, you've said you've been negotiating deals. Foreign countries have already retaliated against our farmers and ranchers and small businesses. How can you commit that negotiations are not just going to stop bleeding, but are actually going to open up markets that the Trump tariffs have closed off?
Jamieson Greer (22:16):
So Senator, we've already had many countries, many of our markets explained that they are not going to retaliate against the United States. And in fact, Vietnam for example, they've lowered their tariffs already on cherries, they've lowered them on almonds and apples. Things I know are important to the Pacific Northwest and this is exactly the right direction that we want to go in. I look forward to hearing from you what other kind of market access you want as we enter these negotiations.
Mr. Wyden (22:40):
What's the status of China? As you know, that's a big market for us in the Pacific Northwest. What's the status of discussions there? I don't see much progress. What I see is it looks like it's going to escalate and escalate some more and hurt our consumers and our small businesses in our part of the world.
Jamieson Greer (22:55):
Well, Senator, unfortunately, China for many years seems to be choosing its own path on market access. Again, they have agency in this, they elected to announce retaliation. Other countries did not. Other countries signaled that they'd like to find a path forward on reciprocity. China has not said that, and we will see where that goes. I think we need to work with our closest friends to make sure that we have trading arrangements that work. And if the Chinese are open, we'll see what… But they haven't signaled that at all. So I don't think that's in the very near term with China.
Mr. Wyden (23:28):
I just am concerned that there's no strategy at all. I'm committed. We understand in the Pacific Northwest what the stakes are to have a smart, tough strategy. I don't see any strategy at all. And you really haven't said much about what the strategy is this morning.
Jamieson Greer (23:45):
Senator, I appreciate your concern. I want to keep having a conversation with you about this, but I see a distinct difference between those countries who have come to us and they said, "We understand your issues, we understand the deficit, we understand your desire for reciprocity, and we want to work with you on this," and the Chinese approach, which has been, "We're going to retaliate." We're trying to remedy a situation. We're trying to remedy a situation that's persisted for many years. And it would be wonderful if the Chinese agreed with that and wanted to persist and work with us on that, but that's not where they are. And the president has recognized this and he wants to focus on others.
Mr. Wyden (24:19):
Let's talk before my time is up about services. The United States is a services powerhouse from travel and technology to finance and media. Our services industry account for nearly 80% of the US GDP at eight out of 10 American jobs. Other countries are responding to Trump's global tariffs by retaliating against American services. Can you explain how your tariff actions aren't putting our services exports at risk like so much of your trade policy?
Jamieson Greer (24:48):
Senator, and Chairman Crapo mentioned this, we had India already pull down a digital advertising tax that affected some of our most competitive tech companies. We're already in conversations with other countries that if they want to have reciprocal trade with us, that's something that we need to consider as well. And we expect them not to discriminate against our services companies. We have some of the most competitive in the world, I agree with you and to me that's part of the calculation.
Mr. Wyden (25:14):
I wrapped up with the services question, because it seems to me it's classic Donald Trump, really good at talking about problems, even saying that there is some reason to go forward identifying a problem, but pretty damn bad at fixing them. And there's going to be a whole lot of collateral damage in the process if you all continue with these trade policies and services and in other areas. Thank you, Mr. Chairman.
Chairman (25:38):
Thank you. Senator Cornyn.
Speaker 1 (25:41):
Ambassador Greer, thank you for being here today. I know there's been a lot of discussion about tariffs, but would you just briefly discuss non-tariff barriers to trade? In other words, the barriers that countries put up to deny market access from US exports into those countries that aren't tariffs per se?
Jamieson Greer (26:08):
Yes. Thank you, Senator. I have here in my hand a book that's become very popular in recent days. This is the National Trade Estimate Report on Foreign Trade Barriers. And the Office of the United States Trade Representative puts this together with input from civil society, unions, industry, business, small business, and this is 400 pages of all the non- tariff barriers that you're talking about. Just a few examples, India, huge trading partner, they restrict imports of ethanol for fuel use by using restrictive import licenses. These are the types of border measures that don't sound very sexy to talk about and they don't make for a great soundbite, but these are the things that actually block our exports where they have licensing regimes or they have fake science that they use to block our imports.
Speaker 1 (26:59):
[inaudible 00:26:59] Just one example that seems to me to make the point is that all friends in Australia basically have put up barriers to the export of beef from the United States. My state, Texas, happens to produce a lot of beef cattle and Australia basically denies access to its huge market, but not as a result of tariffs so much as non-tariff barriers to trade. Could you speak to that?
Jamieson Greer (27:30):
Yes, Senator. And it's always surprising because we have a free trade agreement with Australia and we would expect that we would have fair and reciprocal trade. Last year, I think we imported about $3 billion worth of Australian beef and we exported $0 of American beef to Australia. And it's not just beef, Australia also blocks on species, fake science grounds the export of fresh and frozen US pork. So it's incredible that they do this. We have zero exports of the fresh and frozen US pork to Australia.
Speaker 1 (27:58):
I find it interesting that people express surprise at President Trump's policies when he's been talking about these policies for, best I can tell, for decades and how unfair trading arrangements are between various countries. And indeed, some of these unfair trading practices have resulted in the de-industrialization of America. We've exported manufacturing to Asia and particularly China and other countries that now appear to be willing to hold us hostage to those supply chains.
(28:37)
A few years ago we passed the Chips and Science Act, we worked with Secretary Pompeo, secretary Ross during President Trump's first administration, and later was signed by President Biden, but to bring advanced semiconductor manufacturing back on shore because we recognized that the vulnerability that existed if there was another pandemic, there's a natural disaster or heaven forbid, a military conflict breakout in Asia, we wouldn't have access to these advanced semiconductors that run everything from your cell phone to the avionics on an F-35 Joint Strike Fighter. But China has basically held us hostage and continues to use some of these vulnerabilities to our detriment. For example, critical mineral processing. Would you speak to the vulnerability that exists as a result of China basically processing 90% of the critical minerals in the world that are essential for our daily lives?
Jamieson Greer (29:43):
Yes, Senator. And that figure is always one that gives me great concern, that the 90% of the processing. We do have critical minerals in the United States. We have lithium here, we have other critical minerals here. And a lot of it is that China has centralized the processing of minerals. We have in the Western Hemisphere in Bolivia and Chile, we have all kinds of critical minerals and that's in our hemisphere, but they get sent to China, they're processed, and they come here. And then if China wants to exercise economic coercion or other practices, they do have a stranglehold on these kinds of things. That's a very dangerous situation to be in. I mean, this is part of the urgency of what we're talking about, and I think as the Trump administration certainly takes action on trade, but also takes action on the environmental side and permitting and regulation, that's an area where we can actually have more of that activity here in the United States, or we can work with our trading partners to try to incentivize production there as well.
Speaker 1 (30:37):
Thank you very much.
Chairman (30:40):
Thank you. Senator Bennet.
Senator Bennet (30:45):
Thank you, Mr. Chairman. Ambassador, it's good to see you again. Could you talk a little bit about relationship of the tariffs that you have put on and rising prices for the American people? What is it the American people should expect
Senator Bennet (31:00):
Expect to be able to suffer as a result in terms of rising prices. I understand your position is that the long-term gain is worth the short-term pain, but what is that short-term pain going to look like?
Jamieson Greer (31:12):
So Senator, I think we should look at history and data for this. It's hard to project what's going to happen with prices, but we know in the first Trump term, the president imposed historic tariffs on China on an enormous amount of goods coming from China, and during that time, inflation went down by 0.1%. During the Biden administration, the historic inflation was not on imported goods or related to tariffs that President Biden put in place. It was related to frankly, services, healthcare, education, etc. So I think there's not really a one-to-one on tariffs and price effects and so many things go into price. I know you think I'm probably dodging and weaving on this but-
Senator Bennet (31:53):
Well I-
Jamieson Greer (31:53):
But I'm looking at data, sir, and the data shows that's not [inaudible 00:31:56].
Senator Bennet (31:56):
I know you're smart enough to know that the likelihood is that prices are going to go up for the American people as a result of the tariffs that you put in place. Do you disagree with that?
Jamieson Greer (32:05):
I think-
Senator Bennet (32:06):
When you say in your testimony you expect the American people will bear the burden and I'm sure they will bear any burden on some level, but what do you think that burden is actually going to look like?
Jamieson Greer (32:22):
Well, I think the challenges, frankly, are going to be more for companies that are largely dependent on imports from China and Asia, where they have to adjust their supply chains in a quick set of time and the way the tariffs get allocated between the foreign producer and the importer, that's where the majority of adjustment comes.
Senator Bennet (32:41):
We have a bunch of those companies in Colorado, and I know that Osprey packs, for example, they probably don't want me to mention them, but I will, in southwest Colorado would be a very good example of that. They're very dependent on the supply chain from Vietnam, and they probably are really worried today about what's going to happen, which a lot of people are. I think one of the things about the situation we find ourselves in is the degree to which we've now created huge uncertainty in our economy, and I'm worried that that is going to result in a lack of investment, capital investment. You mentioned some new investments that have been made in our economy, but I think that anybody who knows anything about the economy, knows that uncertainty results in people freezing up, a paralysis, a lack of investment, which is going to make it hard for our economy and may actually provoke a recession. Could you comment on your concerns about that and how you're thinking about that? And I have one more question before I'm out of time.
Jamieson Greer (33:45):
So Senator, the best way to have certainty is to build in the United States. That's the best way to have certainty.
Senator Bennet (33:53):
But that's going to take a long, long time and what's going to happen in the meantime, do you think?
Jamieson Greer (34:01):
So Senator, we have, I would say dilly-dallied for years on this issue. We've done these broad studies, which are interesting and helpful that we saw come out of the Biden administration, but we have to act. I can't sit for three years and try to find some emergency.
Senator Bennet (34:16):
I hear you, but you could have made a different choice, which was to strategically target a geography, strategically target Beijing, strategically target certain industries where all industries in America weren't affected at the same time. You didn't make that choice. You're in the midst of having trade negotiations with 90 different countries at the same time by your own testimony, all of whom can make their assessment, I assume, these are sophisticated people, about where the pressure points are on you, where the pressure points are going to come for us to not necessarily get the best deal because we're spread all over the globe, negotiating every one of these agreements at the same time, rather than a more strategic approach, which would've had the benefit of giving us, I think, a much greater degree of certainty about where we were headed. Obviously, you made a different choice and I'm just curious about how you think about that.
Jamieson Greer (35:25):
So I would note, and I think it's thoughtful to think about things in this way, if you look at the results of the reciprocal tariff, the Western Hemisphere generally is at the lowest tariff rate. If you look at where we have our largest problems with non-reciprocity in deficit countries, it's mostly in Asia. And so you do actually see pretty strategic outcome with respect to promoting production in the Western Hemisphere as opposed to where we have all this overproduction in Asia that's given rise to our current problems on trade.
Senator Bennet (35:54):
I would just say in closing, Mr. Chairman, that that's true. What the ambassador said is true, but I still cannot fathom why we are treating Canada and Mexico, our largest trading partners, basically the same way we're treating Beijing. It doesn't make any sense to me. It makes no sense that we would do it all at the same time like that. And we're going to have to stay on it, which is why some of us have introduced legislation to make sure that Congress begins to take its appropriate role again in making these very important trade decisions. Thank you for your testimony.
Chairman (36:34):
Thank you. Senator Lankford.
Senator Lankford. (36:35):
Mr. Chairman, thank you. Thank you for the work that you're doing. You've got a lot on your plate and appreciate the focus right now on this. Let me come from a perspective of a lot of Oklahoma farmers and ranchers and the manufacturing folks and retail folks, and quite frankly, folks that sell to retailers that are in Oklahoma. They've got several questions that they've actually sent to me pretty quickly, so I want to be able to bounce a few of those. The goal of this is to do more trade internationally, that the United States would be able to manufacture here or produce here and sell more internationally, and that we would have that opportunity to have increased market access. Is that correct?
Jamieson Greer (37:13):
So Senator, I think that's accurate because when we're trying to get down the deficit and have more production here, necessarily part of it is making sure we're not getting too many imports that are driven by unfair trade practices, but also promoting our exports overseas.
Senator Lankford. (37:25):
So then right now there's a lot of negotiations going on. There was a lot of questions for several days, whether we're negotiating or not negotiating. I'm hearing from you pretty clearly today, we are open to negotiate. We're trying to be able to establish better trade agreements to be able to move forward. Do you have any timeline on certain countries or places that you have set internally to say we hope to have negotiations complete by this point? Obviously negotiations can extend as long as they have to, but is there a timeline you're dealing with?
Jamieson Greer (37:52):
So the president has indicated that he's willing to negotiate with parties that want to pursue reciprocal trade with the United States. We don't have any particular timeline set on that because, as you pointed out, Senator, the outcome is more important than setting something artificially for us. What I can say is I'm moving as quickly as possible, and a lot of these countries are moving very quickly and we're working on the weekends, we're working at night as folks want to engage on this.
Senator Lankford. (38:19):
Great.
Jamieson Greer (38:20):
Now, I will say, I know you want to ask something, the trade deficit has been decades in the making and it's not going to be solved overnight.
Senator Lankford. (38:29):
Everyone understands that well, and everyone that I talk to is grateful that we're actually attacking the trade deficit issue and try to be able to bring down barriers to trade. They also want to get a timeline. Let me give you a for instance. I've got an Oklahoma company that several years ago spent millions of dollars to be able to move out of China. They moved into Vietnam for production because literally what they're producing, the parts were not created in America. So they were looking for other places to go. They spent all the money, spent all the time, shifted out of China, got to Vietnam and established there. Now they're saying, "We've got giant costs in Vietnam at this point."
(39:03)
So they're going to have to renegotiate with every single retailer that they sell to, which is going to take a lot of time to be able to do it. What they're trying to be able to figure out is, do we hold on those negotiations and try to renegotiate with Walmart and Target and Costco and everybody else they're going to have to renegotiate with? Or do they press on with those negotiations? Now, if things are going to get resolved soon, they can pause. If they're not going to get resolved, they're going to have to renegotiate every contract again to try to figure out which way to go. So the time piece does matter to them.
Jamieson Greer (39:35):
Senator, I understand completely, and Vietnam is one of those countries that understands that it is frankly one of the major targets of this action because their trade surplus with us is so lopsided. I think it's every $15 they export to us, we send them $1 and they remain closed to our exports where we can be in competitive agriculture, etc. But they've come to the table with an offer, right? We didn't go out and say, "Please come talk to us." They beat down our door and they want to talk about it.
Senator Lankford. (40:03):
Good. I don't anticipate that we're ever going to have equal trade with Vietnam. We're a much larger economy than they are, but bringing down the trade barriers would be helpful so that they would accept American products to be sold there. I think that's beneficial, but most countries in the world are never going to buy as much as we're purchasing because we just purchase a lot more from there. Another issue has come up about garment manufacturing. Obviously this is a challenge that we'll have different pieces that are bought from different countries. We don't have a lot of garment manufacturing here in the United States. For those garment manufacturers that are here and for others, some in Oklahoma, they're asking me about exclusions and exceptions and how this is going to be handled to say, "We can't buy it in America. This is the only place that's actually manufacturing it." I know long term the hope is to be able to have a more diversified, but in the short term, they don't have another option. How do you plan to handle that?
Jamieson Greer (40:55):
Senator, the president has been clear with me and with others that he does not intend to have exclusions and exemptions, especially given the nature of the action. If you have Swiss cheese in the action, it can undermine the overall point, which is to get rid of the deficit, achieve reciprocity. To my point earlier to Mr. Bennett, the Western Hemisphere countries have a much lower tariff than many of the Asian countries, and I've heard from textile manufacturers for many years that they would love to have a situation where Western Hemisphere textile and garment manufacturing is more competitive, and maybe we're setting up the conditions for that.
Senator Lankford. (41:30):
So in the short term, there's no exemptions that are coming on it, so for companies that are currently buying from Asia at this point, whether it be for textiles, whatever it may be, the goal is to be able to push them out of Asia into the Western Hemisphere, or where do they need to go at this point?
Jamieson Greer (41:46):
Well, the president has been clear, again, that he's not doing exemptions or exceptions in the near term. My own sense is, given the tariff differentials between Asia and Western Hemisphere, I think people can start making decisions based on that.
Chairman (42:02):
Senator Whitehouse.
Senator Whitehouse (42:04):
Thanks. Thanks, Ambassador Greer, for being here. Just to frame our conversation, tell me what a negative externality is.
Jamieson Greer (42:14):
This is something you and I like to talk about.
Senator Whitehouse (42:16):
Yes, we do.
Jamieson Greer (42:17):
This is a situation where you have a foreign country where perhaps they have actions such as poor environmental regimes or lax labor laws, and they don't bear the cost of that. Instead, they send their goods that are the product of these processes where they have lax regulatory regimes, they send it here, and we end up bearing this. They externalize these negative externalities to us and we have to bear it and our workers have to bear it, and we don't compete on a level playing field.
Senator Whitehouse (42:43):
So two things are wrong with this. One, the customary negative externality is pollution, and to the extent, for instance, on an issue I've done a lot of work in bipartisan fashion, plastic in our oceans. Now it's in our drinking water, it's in breast milk, we've really gone down a very weird pathway with respect to plastics. If China, for instance, is responsible for dumping 60 or 70% of the plastics into the Pacific, then that's a harm to us. Correct?
Jamieson Greer (43:23):
Yes, I agree.
Senator Whitehouse (43:25):
Because it's a commons, the ocean, and we suffer from that. And then if the Chinese company is exporting their goods to the U.S. and that Chinese company has a lower cost for its product because it doesn't have proper pollution control with respect to plastic and the U.S. company does, then that's an unfair trade imbalance. Correct?
Jamieson Greer (43:52):
Yes, I agree with that.
Senator Whitehouse (43:53):
So two things are wrong when we get into the situation of foreign countries allowing pollution that our companies pay to prevent.
Jamieson Greer (44:06):
That's right.
Senator Whitehouse (44:06):
And that's an appropriate place for tariffs to be deployed to offset that trade imbalance and help protect the commons from this particular tragedy. Correct?
Jamieson Greer (44:20):
I think trade action can be appropriate. And when the president announced his reciprocal tariff regime last Wednesday, he specifically referred to pollution by other countries in his speech. You may not have listened to it, but you may want to go back and listen to that part because that's very true, and I agree with you.
Senator Whitehouse (44:35):
Well, it might be the only place in which the administration shows the slightest interest in pollution, so good for that. The issue of plastics is I think a pretty significant one. Again, there's been a lot of bipartisan interest. I even went up to the Oval Office during Trump One to have one of my bills signed by the president, and he gave a very animated riff on Asian countries polluting our beautiful oceans and how it comes ashore very often in Alaska by the ton along their beaches. So I hope this is an area we can continue to work together. And in particular, I hope that you'll sit down with me and Senator Cassidy on legislation that we are working on. Will you give us that meeting?
Jamieson Greer (45:27):
Senator, I'll take any meeting with you that you would like to talk about this issue, and then I'd like to also let you-
Senator Whitehouse (45:33):
We'll sit down with Senator Cassidy's team and have a conversation there. The other thing I wanted to flag for you is that you pretty well successfully deflected all of Senator Bennet's questions about what the immediate impact looks like in the short-term pain for the long-term gain. I just want to flag for you one issue that is very important to me. Rhode Island is a small business state. We don't have a whole lot of big mega corporations there who can balance things and move things around. Canada is our largest trading partner. We have companies who fill an important niche in the global supply chain, and particularly in American companies' supply chains because they get something from Canada, or let's say China could be, but Canada is our major trading partner, and they process that thing and then they put it into the supply chain for the larger corporate entities, that's their business. That's all they've got.
(46:44)
So if we're not looking out for these small businesses that are actually going to have to lock their doors and close the shutters and fire their employees and go out of business, I think you've missed a huge hole in the problem that these tariffs have created. If all you're listening to is the big mega corporations who can move things around the world and have the resources to dodge these effects, you're not getting the straight story. I think in every one of our states, there are going to be small businesses that occupy a niche in which trade is an important factor and that are going to go bust because of these tariffs. And I urge you to look out for those businesses because I don't think they're getting their voices heard at all.
Jamieson Greer (47:31):
So Senator, I've talked to you about this. I've talked to Senator Hassan about this and others. One thing I asked my team to do last week was to convene a meeting of… I have a trade advisory council for small business. I've asked them to convene that meeting. I've connected with the Small Business Administration. They have an international trade desk there. I have an office that also deals with small business because I do want to hear it. I think it's important that we hear it because they don't have the same voices in Washington. I will say right now, Canada and Mexico, things coming from Canada, Mexico that comply with the United States-Mexico-Canada agreement come in duty free. They continue to do so if they follow the rules. They don't follow the rules, they're trying to put in Chinese stuff, that's going to be tariffed. But if they follow the rules, they're going to be getting the duty-free treatment they're due.
Senator Whitehouse (48:12):
Well, a small business that has gone broke is not very amenable to a meeting. They don't exist any longer.
Chairman (48:18):
Senator Hassan.
Senator Hassan (48:22):
Thank you, Mr. Chair and Ranking Member. Good morning, Ambassador Greer. Thank you for being here. Before I start with a couple of additional questions about the impact of these tariffs, I want to associate myself with Senator Whitehouse's comments just now about the impact on our small businesses, particularly those who are critical parts of supply chains for some of our larger corporations in the country. As you know, Canada is our biggest trading partner too, and we are already seeing the impact of these tariffs with our small businesses, especially in our tourism industry, which is being decimated because Canadians are not coming down to New Hampshire the way they usually do.
(49:04)
Let me ask you about a couple of other things. President Trump's tariffs have made almost everything that families buy more expensive. The president imposed a 10% national sales tax on all imports into our country and an even higher sales tax on imports from more than 50 countries, including our allies like Canada. This is the largest tax increase in over half a century, and it's going to cost the average American family $3,800 a year. Their morning cup of coffee will cost more, so will new shoes for their kids, and so will fresh fruit. So my question to you, Ambassador, is, how much revenue from the president's national sales tax will be used to give tax breaks to billionaires?
Jamieson Greer (49:50):
So Senator, as you know, any kind of tariff revenue that comes in to the United States government, it goes to the Treasury and Congress will decide what happens to that money. Obviously, the president wants to have a very competitive tax policy that's good for everybody. That was part of why he had such a successful economy in the first term, is he married trade action with good tax policy to have $7,000 in increase in real wages over that time. That's what we're looking for.
Senator Hassan (50:15):
Let's be really clear, besides the contradictions in the way he talks about the purpose of his tariffs, the president has made very clear that he sees tariffs as a way of increasing revenue. At the same time, he's working with the majority in Congress to give additional tax breaks to the wealthiest people in the country at the expense of working people who are going to be paying more for everyday goods, goods they absolutely have to pay. Goods they were hoping were going to cost less given the president's campaign promises. But of course, he isn't keeping to those campaign promises as prices continue to go up. Now, the president's national sales tax is increasing prices for families. It's also causing huge losses in Americans' retirement savings. Ambassador Greer, would the administration reverse course if the president's tariffs led to 10% inflation?
Jamieson Greer (51:10):
Senator, the president is fixed in his purpose. This trade deficit and the offshoring and loss of manufacturing jobs is something that has persisted for too long and it's dangerous.
Senator Hassan (51:19):
I understand your justification for the policy, even though there are some very contradictory justifications coming out of the administration, but my question is, what's the inflation rate where you guys would reverse course. Ten percent inflation that I just asked you about, that is higher inflation than we saw at the peak of the COVID economic crisis. But you aren't going to say here today that you would reverse course even if you created inflation as high as we had at the peak of the COVID economic crisis?
Jamieson Greer (51:50):
I think the most serious inflation we saw was during the Biden administration. When we did tariffs in the first term, inflation went down. It's not going to be a one-to-one. Inflation is about how much money you're putting into the supply. It's not about tariffs on products.
Senator Hassan (52:02):
Let's just be really clear that the Trump administration is here today to say that, even if inflation hits Americans' pocketbooks at 10% because of these tariffs, then the Trump administration is still going to go charging ahead. So Ambassador, would the administration reverse course if the president's tariffs caused a 50% stock market crash, which would hurt Americans' retirement savings even more than they've been hurt in the last 10 days or so?
Jamieson Greer (52:30):
Senator, the fundamentals of the economy are so strong. We had 228,000 jobs last month. We have 9,000 additional manufacturing jobs from the month before.
Senator Hassan (52:38):
So again, your answer is, even if the stock market crashes 50%, which is how much the stock market crashed in the Great Recession, you're not going to say here today that you would reverse course even if you crash the stock market and harm retirement savings as drastically as happened during the Great Recession in 2007?
Jamieson Greer (53:00):
Senator, your hypotheticals are not consistent with the history we've seen with the use of tariffs.
Senator Hassan (53:04):
My hypotheticals are based on the fact that a lot of Americans are looking at their 401(k)s today and wondering how much of a lifestyle change they are going to have to have or whether they're going to be able to retire when they plan to because of the recklessness and haphazard nature of the Trump administration's imposition of tariffs. Nothing was thought out about this. This has been a haphazard, incompetent effort and it's showing. Thank you, Mr. Chair.
Chairman (53:33):
Thank you. Senator Cassidy.
Senator Cassidy (53:36):
Hi, Mr. Greer. Thank you for being here. When I speak to my rice people and my shrimp people back home, they say that the tariff barriers and the subsidies by other countries for those products are so much that it is putting some of our shrimpers and some of our rice people either out of business or in incredible financial binds. So the fact that the president is attempting to address these as well as the non-tariff trade barriers is incredibly important. Let me first say that. But I also hear from my producers that the mean tariff being selected to apply to a country may not account that, for rice for example, the tariff is much higher for that particular product and that it is not adequate to address that which is taking place. Any thoughts on that and how can we have something more particular for products which are really over, over tariffed?
Jamieson Greer (54:36):
Yes, thank you. And I appreciate that concern and the tariff rate applied to many of these countries, again was a country-wide rate. It wasn't product specific. My sense is, if countries come to us and they expect to have some kind of a different plan, they will need to change these things and they will have specific products, specific barriers that they would have to address, right? Or else, the president, again, he's fixed his purpose. He wants to see production back here. He wants to see our agriculture producers doing well, and these countries just have to have reciprocal trade with us, and that means taking care of the types of barriers and tariff rates you're talking about.
Senator Cassidy (55:12):
So it sounds like one of the things, I think they want to know is that, since shrimp might be a relatively small part of trade with some of these countries, that the interests of, for example, shrimp will not be sacrificed in part of a greater whole?
Jamieson Greer (55:26):
No, I think, and I saw a really interesting article today in New York Times on shrimp, you may have seen that, where the tariffs have actually given a bit of a lifeline to these shrimpers. And I think that, if there's going to be any kind of change to any of this, and I'm not going to prejudge that, we have to make sure that our industries are protected adequately so we don't go backwards with the deficit.
Senator Cassidy (55:48):
Let me ask, in the president's America First trading policy, there's several sections relating to free trade agreements and how they will be evaluated. Senator Bennet and I are working on an Americas Act, which would be a hemispheric trade policy, which would have several purposes. One, to strengthen those ties. Secondly, to keep the Chinese from making the incursions that they're absolutely making throughout the hemisphere. Some are calling the Caribbean a Chinese lake. And so this would allow us to push back upon that. Can you share anything regarding the analyses of the free trade agreements we have within our hemisphere and then specifically on countries like Argentina who would like an FTA with our country?
Jamieson Greer (56:35):
Certainly, I would say that we are first and foremost focused on addressing this emergency and the reciprocal tariff action and implementing it appropriately. With respect to relations in the hemisphere, any kind of trade arrangements with these trading partners I think need to be coupled with strong rules about third countries. What I don't want is a situation where these countries are using their export platforms to incorporate content and goods from China or other Asian countries where we have a real issue with our deficit and offshoring of manufacturing. I would expect any kind of changes to these arrangements to be accompanied by changing the rules of origin to ensure that the United States and U.S. workers are really benefiting from these agreements.
Senator Cassidy (57:16):
So nothing from an FTA in general, but the specific of where it's being used to circumvent the intent of the FTA is the concern of the administration?
Jamieson Greer (57:25):
Yes, that's certainly a huge concern. And again, the president wants to see factories back here. The most certain way to not have a tariff is to build your factory in the United States. If people want to use other countries and insist on that, then we want to make sure that they're not using that to arbitrage for higher tariff jurisdictions to use them as an unfair export platform.
Senator Cassidy (57:43):
Let me ask you this. Louisiana has some of the largest ports in the nation by tonnage, and all the commodities going from the Midwest flow through my state going out to the world. Earlier, USTR proposed imposing a million dollars for every vessel built in China, and I'm told that if the Koreans have a fleet of 50, and five of the ships are built in China, then the million dollars would apply to all 50, not just to the ships that are built in China. Now, that would clearly impact a ship coming to the United States to offload, if you will, impact my ports and the ability of our goods throughout the nation to move through the Mississippi. Is USTR going to hang by that or considering modifying that? Can you give us any idea about that?
Jamieson Greer (58:32):
So to address the lack of shipbuilding in the United States, USTR's proposed actions are just those. They're proposed actions, they are a series of potential remedies that could be used to incentivize shipbuilding in the U.S. They're not all going to be implemented. They're not all going to be stacked. We've asked for a lot of input and we've had a hearing on that. We've collected comments, we've reviewed it. I've met personally with certain stakeholders during that time period, and I think the president will look very carefully to make sure that we have the right amount of time and the right incentives to create shipbuilding here without impacting our commodity exports.
Senator Cassidy (59:03):
Thank you. I yield.
Chairman (59:06):
Senator Cortez Masto.
Senator Cortez Masto (59:08):
Thank you, Mr. Chairman. Ambassador, as USTR's chief of staff in the first Trump administration, you oversaw the negotiation of the US-Mexico-Canada Agreement, the USMCA, and the renegotiation of the Korea-US Free Trade Agreement, the KORUS. President Trump signed both of these agreements. He called the USMCA a colossal victory and KORUS a historic milestone, and yet, with President Trump's new blanket tariffs, he is ripping up these agreements with our allies that we negotiated with. Why would any country want to do business with us much less negotiate a trade deal if we don't even honor our ongoing agreements?
Jamieson Greer (01:00:00):
So Senator, we are the consumer of last resort. These countries have to sell here. Many of them, especially in Asia, have built their entire economies around exporting to us. They're very dependent on it, and that's part of why we have this huge trade deficit. With USMCA, those parties continue to enjoy duty-free treatment for many of the products that continue to comply with the rules that were set out five years ago. There's a big concern, Senator, that we did not have adequate other protections to stop the flow, particularly of autos into the United States.
Senator Cortez Masto (01:00:33):
But there was a process for you to renegotiate that agreement this year. We talked about that in my office. Isn't that correct?
Jamieson Greer (01:00:39):
That's correct. We have a process for that.
Senator Cortez Masto (01:00:40):
And it wasn't to do these blanket tariffs. Correct? And so let me-
Jamieson Greer (01:00:43):
What we have to address is an emergency, Senator.
Senator Cortez Masto (01:00:45):
That's true, and you should be honest, at least as you sit here, as you were in my office, be intellectually honest. Now, let me just ask this, because this is also true, and I so appreciate Senator Lankford asking this, time matters. How long did it take to negotiate that agreement, USMCA, that you were part of?
Jamieson Greer (01:01:05):
We did it at breakneck speed. We did in about two years.
Senator Cortez Masto (01:01:07):
Two years. And now you're telling us you have nearly 50 countries coming to you, approaching you to enter in a negotiation, and you think that you can do that overnight?
Jamieson Greer (01:01:19):
India for-
Senator Cortez Masto (01:01:19):
Man, you're pretty superhuman here if that's the case. So let's be realistic. That's all we're asking. Common sense and realism here, Ambassador, as you sit here before us, and let me talk about something else that is really important for my state, and I think this entire country, because this administration is forgetting that we have a billion-dollar economy when it comes to tourism into the United States. People know Las Vegas. My state is Nevada, we rely on tourism to our state, and now we're seeing an impact because of these tariffs, not just from Canada, but I am hearing from so many that are in the tourism
Senator Cortez Masto (01:02:01):
And leisure industry. We are seeing impacts because now this billion-dollar industry of international tourism is having an impact on our economy. And this is a service industry. Let me just say this, I'm kind of offended by your testimony today that says we must accept self-inflicted economic pain. And I quote you by saying, "To become an economy based on producing real goods and services." What does that mean? What does that mean to my service industry? And every service industry across this country that relies on tourism and travel that is the backbone really part of our billion dollar economy? What do I tell them that they just have to suck it up, that they're not really part of this real services, that you have another idea for the jobs that they should engage in? What do I tell them?
Jamieson Greer (01:02:51):
Oh, Senator, of course those are real services. The whole-
Senator Cortez Masto (01:02:53):
So what are you doing about the impact… What are you doing about the impact of international tourism and now these blanket tariffs having a negative impact? What are you doing to address that?
Jamieson Greer (01:03:02):
The whole sentence, Senator said that we needed to get away from government spending as funding our economy and financialization. And we need to move to real goods and services, including the tourism you're talking about, it's incredibly important.
Senator Cortez Masto (01:03:12):
So what are you doing to impact the negative impact of tourism right now?
Jamieson Greer (01:03:15):
Well, one thing I'll say is we can't have the status quo, right? I keep hearing that we should… Essentially, what I'm hearing is we should have the status quo. We should keep the $1.2 trillion trade deficit that Biden left us with.
Senator Cortez Masto (01:03:25):
I'm asking you-
Jamieson Greer (01:03:25):
And I don't think that's adequate.
Senator Cortez Masto (01:03:26):
What are you doing in this administration to address now the impact that you're having with these blanket tariffs, not targeted tariffs, blanket tariffs on international tourism, that is a big impact to our economy? What are you doing to address that?
Jamieson Greer (01:03:41):
Well, Senator, as we're talking to all of these countries, we are talking about services. We are talking about making sure that we can export services to other countries. A lot of those that we export are… We have digital services-
Senator Cortez Masto (01:03:54):
Well, let me say, they only have so much time and apparently you're not. So here's what I would like, because you haven't thought about this and the administration hasn't really thought about it because I haven't heard anybody talking about tourism. So why don't you come talk to me in my office and let's talk about and put a plan together because these blanket tariffs are having an impact on tourism in my state and across the country.
Jamieson Greer (01:04:15):
Senator, I'm happy to talk-
Senator Cortez Masto (01:04:16):
Instead of just defending it, why don't you just come sit down with some of us and try to address the concerns that we are seeing and feeling in our states that this administration has not taken into account?
Jamieson Greer (01:04:28):
I'm happy to come speak with you. Thank you, Senator.
Mr. Chair (01:04:33):
Senator Grassley.
Senator Grassley (01:04:34):
Ambassador Greer, thank you for being here. I've made very clear throughout my public service that I'm a free and fair trader. The constitution gives Congress the authority to regulate interstate and foreign commerce. I believe that Congress delegated too much authority to the president in Trade Expansion Acts of 1962 and Trade Act of 1974. That said, I support President Trump's agenda to lower tariffs and non-tariff barriers other countries impose on American goods. I support President Trump's agenda to get a better deal from China and other countries for our farmers and manufacturers. In fact, even back in 2003, I sent a letter to the Chinese Minister of Commerce at that time, pointing out China's failure to live up to its WTO obligations.
(01:05:33)
And then I went further in 2018 when I was on Senator [inaudible 01:05:40], I told top Chinese leaders I made a mistake supporting China in the WTO. That's why during the first Trump administration I was support of president agenda to get fair trade with China. At the time, I raised alarm bells when tariffs are used, we all know agriculture is usually the first place of retaliation. In response to Chinese retaliation to tariffs, the first Trump administration set up the market facilitation program for farmers which gave direct payments to farmers affected by the tariffs. This helped farmers weather the short-term impact of trade retaliation. But as you know, farmers still overwhelmingly want to get their money from the marketplace and not from a government check.
(01:06:37)
So far in this administration, we've seen even more sweeping tariffs with some countries already retaliating agriculture, including China. I have been very vocal in my wait and see approach to these tariffs because I believe President Trump and you, Mr. Ambassador, are using them to get fair trade for Americans with many countries. If that's not the case, level with me. So to help farmers in the meantime, instead of relying on payments from the government, I'm going to give a suggestion that you don't have much to do with. But the administration could move very quickly to increase RVOs on the renewables fuel standards so that farmers get more robust domestic markets for their crops.
(01:07:33)
And one place to start would be where the Biden administration came up short with the RVOs only three and one 10th billion over three year period of time on biodiesel to make that 5.3 as far as you can see into the future. And that would very dramatically increase soybean prices. So my question to you is, in the medium to the long term, do you plan to turn these tariffs into trade deals to reduce tariffs and non tariff barriers? I support that. On the other hand, if the purpose is to stall on negotiations in order to keep tariffs high for the sole purpose of feeding the U.S. Treasury, I oppose that. So is this administration for trade reciprocity or for treasury replenishment?
Jamieson Greer (01:08:40):
Senator, thank you. And thank you for your years of service on the trade space and you're one of the deans in this area. It's important to understand the sense of the emergency that we're facing and urgency with the need to reshore and do manufacturing here. It's incredibly important to the president. Yesterday, he stated very clearly that he is happy to engage in negotiations immediately with countries that believe that they can help us reduce our deficit and get rid of the non-tariff barriers and the tariffs that affect that. I think the answer, Senator, is it's going to be country by country.
(01:09:13)
There are going to be some countries where they're not able to address their non-tariff barriers or their tariffs or the deficit fully. And there will be others who I think will be able to do that and where the president will have the option of making a deal with them. So we're certainly seeking reciprocity. Now, if we have the tariff on a country, there's obviously going to be a revenue effect. But we need to reshore manufacturing. We need to get rid of our agricultural deficit and we need to make sure that if countries are going to trade with us, it has to be on a reciprocal basis.
Mr. Chair (01:09:43):
Senator Cantwell.
Senator Cantwell (01:09:46):
Thank you, Mr. Chairman. Ambassador Greer, good to see you. You and I have had many conversations about trade. I think my question this morning though starts with the consultation that Congress deserves on trade issues from the trade ambassador. And what did the Trump administration do to prepare us, to communicate with us to tell us about findings as it relates to these emergency orders by the president?
Jamieson Greer (01:10:14):
Thank you, Senator. As you know, I find consultation requirements very important and not just as a requirement, just a matter of good practice. Our staff, the USTR staff in the past two months that we've been in office have had over 200 formal engagements with staff on the hill, obviously here in the Senate, also in the House. The day of the reciprocal trade announcement, we had our staff also up here briefing your staff. And we also had the president issue very publicly, his America First trade policy memorandum, which specifically said that he was going to look into the trade deficit and the possibilities of tariffs.
Senator Cantwell (01:10:49):
So we've wreaked havoc on the economy by having one of the largest drops of the market. We have people's 401 in panic. We have retail organizations like the retail industry, National Retail Federation, American Apparel Industry, Outdoor Association, consumer Technology, Computer Communications Industry, Main Street Alliance, Small Business Majority, all anxious, asking us to do something. And you're saying, "Well, some people have passed some notes to staff." What the requirement is, and this is where I believe the president has misted and actually exploited this authority is not communicated to us nor these interest groups that are now panicked over the effect of tariffs.
(01:11:37)
So I would say that the skillset of USTR office or even a treasury secretary could have opened these conversations with these countries without the tariffs and saved a lot of people, a lot of pain and anguish. I worry that this trust issue because I have a different worldview, that we should be building alliances as a way to counter China, that the alliance building process now will become harder and people are going to wonder, well, is the United States going to pull another fast one again and just wreak havoc when in reality, countering China with [inaudible 01:12:15] NATO or something like that is a more powerful tool. Do you have a comment about that?
Jamieson Greer (01:12:22):
I do, and I think we do need to be thoughtful about this. I think what we can't do is weight. We have had many, many times in past decades when we have had real robust trade disputes with our partners, Japan in the '80s and early '90s over cars, semiconductors. And they ended reshoring a lot of those factories here and it didn't make us less of a security partner to Japan. I think we can have these conversations like friends do. And that's what the president said yesterday. He said, "Listen, China's trying to retaliate. They're taking different paths, but for others you want to have meetings-"
Senator Cantwell (01:12:52):
Okay. I want to reclaim my time for a second because I only have five minutes and you have lots of time to answer lots of questions for members. But you can see all my colleagues, we are thoughtful people with specific issues about our constituencies. I just met with raspberry growers. They're concerned, they want to know if they're going to get some seat on a council so they can have their issues heard. I'm for trade, I represent trade, I represent a trade economy. I represent the success of what innovation and trade gets you. But you're coming here this morning with this not only tanking of the market and 401s. Now you're coming here telling me that tariff is the tool. And I'm telling you, innovation is the tool. You are telling us in your testimony you want a tariff on semiconductors. I'm saying that the last administration and this organization here passed the CHIPS and Science Act.
(01:13:41)
So we could reshore semiconductors here in the United States. So you're not going to win the innovation economy by tariffing semiconductors and reshoring that. I don't know what you think. I'm not trying to get the semiconductor. I want to lead on next generation semiconductor manufacturing. Because I'm pretty sure I'm sitting next to the intel ranking member here who's going to tell me, if we don't lead on semiconductor manufacturing and semiconductor next generation technology, then we're not going to be leading in defense or in AI or in anything. So I want to innovate my way to that future and I want to use the alliance power of different countries to force China and other people to follow us. Instead of this berating of the American consumer who has to pay the price for this policy.
Jamieson Greer (01:14:32):
Senator, TSMC has announced a new announcement where they're going to have more investment here in the United States so they can make those things here and have that innovation.
Senator Cantwell (01:14:41):
Thank you, the people who voted for the CHIPS and Science Act in the past administration. Thank you for that. We are going to lead on innovation despite this administration.
Mr. Chair (01:14:51):
Senator Warner.
Senator Warner (01:14:56):
Well, Ambassador Greer, it's good to see you. And let me first of all completely agree with Senator Cantwell. I mean, I just don't get it. The fact on semiconductors, why you gave a small exemption. You didn't exempt GPUs, you didn't exempt lithography equipment. You put a huge hit on Taiwan, where we need collaboration with the TSMC, I'm baffled. I mean, you're going to hear from me what I'm sure you're hearing from most of us incredulous about I think probably the worst economic policies that I've seen in my lifetime. And the data reflects that global tariff of 10 to 50% on almost every worldwide country. Although, I'll note from my Republican colleagues, you'd be probably glad to know that Russia didn't get a tariff increase.
(01:15:56)
Yeah, I believe that when all these global tariffs go into effect, I think most of them as of midnight tonight, tariff rate will be approximately 23%, highest since 1909. I believe that'll translate into the largest tax increase since 1968. We've seen the numbers of about $4,000 per family cost. Since inauguration day, more than $11 trillion vanished from the market. And I will acknowledge that we got a little blip today, but I just talked to one of the senior folks in Wall Street and he described today's market as a good day in hospice. I wouldn't use his name because there are no good days in hospice, but that's kind of how I feel.
(01:16:46)
And again, I know you guys are supposed to know more than all of Wall Street, but when every firm says we're going to see increased chance of recession. And I've met you Ambassador Greer, I think you're a smart guy, but I don't think just because this is the way Donald Trump wants the world to be for the last 40 years that he can simply will it into happening. In my state, the Port of Virginia accounts for $124 billion in trade. That amounts about half a million jobs. Those are all up for grabs now. We got 800,000 small businesses in Virginia. These tariffs are going to wall up them. I had last week a guy in from a local brewery in Alexandria, the owner's name is Bill. He's got a triple whammy. He gets his pilsner from Canada, he gets his bottle caps from Mexico, he gets his kegs from Germany.
(01:17:50)
So already even advance of these all kicking in at midnight tonight, he's laid off 10% of his staff. Even if the president flips on all this, he's not bringing folks back. I mean, candidly had another guy in who makes bourbon and sells a lot to Canada. He thinks it'll be a cold day in hell before the Canadians start buying American bourbon again, simply because our trust relationship has been broken. So I guess the first question I want to give, I'm trying to figure out what would be a question that maybe folks haven't asked. Let me ask you on this one. Australia is one of our strongest allies. We have the [inaudible 01:18:35] relationship, which is key to their national security. It's key to our industrial base so we can continue to build subs.
(01:18:44)
Terribly important. Interesting thing with Australia is we have a free trade agreement with Australia. We don't have tariffs. We even have… One of the few industrial countries, we have a trade surplus with Australia. So Ambassador Greer, can you explain to me how it helps America's national security or our trading balance when we have… And I loved your fancy Greek formula, which was basically bad math on steroids formula. How with the trade surplus, with this strong relationship, Australia got hit with a 10% tariff as well?
Jamieson Greer (01:19:22):
Senator, Australia has the lowest rate available under the new program. They ban imports of American beef-
Senator Warner (01:19:29):
Ambassador, excuse me. There is a trade… We already have a free trade agreement. We have a trade surplus. So getting the least bad. Why did they get whacked in the first place?
Jamieson Greer (01:19:41):
We're addressing the $1.2 trillion deficit, the largest in human history that President Biden left us with. We should be running up the score in Australia. The ban-
Senator Warner (01:19:49):
Ambassador Greer, answer the question on Australia.
Jamieson Greer (01:19:50):
They ban our beef-
Senator Warner (01:19:51):
We have a trade surplus with Australia. We have a free trade agreement. They are incredibly important national security partner. Why were they whacked with a tariff?
Jamieson Greer (01:20:02):
Senator, despite the agreement, they ban our beef, they ban our pork. They're getting ready to impose measures on our digital companies-
Senator Warner (01:20:09):
[inaudible 01:20:09] with your Greek letter formula, the fact that we have a trade surplus.
Jamieson Greer (01:20:14):
We have a global tariff on every… We're trying to address the $1.2 trillion deficit that Biden left us with, sir.
Senator Warner (01:20:19):
I think that answer… Sir, you are a much smarter person than that answer. The idea that we are going to whack friend and foe alike and particularly friends with this level is both, I think insulting the Australians, undermines our national security and frankly makes us not a good partner going forward. The lack of trust from friends and allies based upon on this ridiculous policy that goes into full effect at midnight tonight is extraordinary. I go back to what the market believe today is happening. A good day in hospice. I'm afraid if we keep these tariffs in effect, we're looking like an economy that will be in hospice. Thank you, Mr. Chairman.
Mr. Chair (01:21:03):
Senator Daines.
Senator Daines (01:21:07):
Mr. Chairman, thank you. Ambassador Greer, welcome to Capitol Hill. I share the president's determination to end these unfair trade practices, whether they are tariffs or non-tariff barriers. I hope we can avoid an all out trade war. A trade war will mean higher prices for the American consumer because I think we could do a little [inaudible 01:21:32] exercise at the moment. Who pays these high tariffs? In the short, medium term, it'll be the consumer. It'll be the consumer. And so I'm worried about the inflationary effect. I'm worried if there is a trade war, that we're going to have markets shutting down for American farmers, ranchers and manufacturer.
(01:21:50)
I'll give you an example of that here in a moment. But I'm encouraged because the president's announcements has gotten the attention of a lot of countries. I would encourage to see Kevin Hassett this morning talking about negotiation occurring, looking at President Trump's latest posts on Truth Social. The fact that we've got Koreans now coming to the United States, literally dispatched to engage with us to lower these barriers, tariff and non-tariff. The Japanese in some 70 countries now that want to come and work and address the issues of the barriers for American companies, American producers doing businesses in their countries with 95% of the world's consumers outside the United States, critically important.
(01:22:40)
So this is very encouraging. I think that's in part why we're seeing the rebound today in the equity markets, because there's hope that these tariffs are a means and not solely an end. And if that's the case, I think we're on a really good path, this kind of tough position we're taking to actually solve some of these problems in barriers in trade that have been lingering for decades. And President Trump is taking bold leadership to address it, and I'm hoping for a good outcome. My hope is this is a sign of things to come, that these countries will offer major concessions and make historic trade deals with President Trump.
(01:23:26)
Ambassador Greer, I encourage the administration, encourage you to use this opportunity to secure better terms with our partners, with our allies to protect and grow American jobs, to grow access for our American farmers, our ranchers, our manufacturers, and American families. Three weeks ago, I was in Hanoi and met with General Party Secretary Tô Lâm, the highest ranking official in Vietnam. And then I went to Beijing and met with high ranking Chinese officials, including the Premier Li Qiang. I carried President Trump's America First message directly to these leaders. I spoke with Premier Li Qiang and demanded that China stop the flow of the fentanyl precursors into Mexico, United States and Canada.
(01:24:22)
I raised concerns about developments related to the expiration of registrations for beef processing plants here in the United States and some non-science based barriers, which has impacted Montana and US beef exports. I want to remind you that in 2017, I went to China. I carried some steaks from a Montana rancher, Fred Wacker of Miles City, Montana. We met with the premier. In fact, I had one of your predecessors, Rob Portman, then the Senator from Ohio and a former USDR with me. I had Senator Barrasso with me, Senator Kennedy with me. And as a result of that meeting, 30 days later, they lifted a 14-year ban on US beef imports into China. Let me talk on what that has meant so far.
(01:25:13)
This is the largest beef export market in the world is now China. For US producers of beef, in 2021, we shipped $1.6 billion of beef. Keep in mind, the 2017 number was $31 million. It was $2.1 billion in '22, 1.6 billion in '23, 1.6 billion in '24. But here's the concern, that's been shut off now in the last three weeks. March exports of beef to China, US beef declined 92%. So the valve is shut right now for US beef producers. My question is what can we do to hold China's commitment to US beef and other ag imports, which are so critical right now for US producers?
Jamieson Greer (01:26:08):
Thank you, Senator. And you've always been a leader on this and I appreciate that. China, of course, needs to take down their barriers. It's been a persistent challenge with them and they like to use economic coercion and they have their own method of doing things. But my hope would be is that they turn back on this course of action. I think President Trump is focused on making sure we have the right program in place, that we're dealing with partners who are going to be respectful and achieve reciprocity with us. And I think a lot of this is going to be up to the Chinese on how forward-leaning they want to be on having fair trade with us. I'm very sensitive to this issue in particular, and I want to make sure we open up beef markets other places too, so we don't have to be dependent on just one market.
Senator Daines (01:26:48):
Yeah. Well, Ambassador Greer, I'm encouraged by the negotiations that are going on as we speak with Japan, with Korea, with some 70 countries who want to now reduce their tariff and non-tariff barriers. This could be absolutely a monumental moment in trade for the United States. And Godspeed.
Mr. Chair (01:27:10):
Thank my colleague. Next is Senator Young.
Senator Young (01:27:17):
Good to have you here, Ambassador Greer. And let me just begin by commending you. You've been very accessible as we've tried to get some clarity on exactly trade policy and where we're headed and how we expect counterparties to move and all the rest. You return my phone call immediately and your team's been in touch with mine. And so that speaks very well of you and the Trump administration. Because this is creating some anxiety, this current tariff posture among some of my constituents. On balance, I would say most of my constituents are supportive and they recognize that some turbulence might be required in order to end up in a better spot and reset trade relations.
(01:28:09)
I think one of the things I'm hearing from constituents back home is that trade retaliation doesn't fall on everyone evenly. It has a different impact on a New York tech firm than it might have on a Hoosier soybean farmer. And I hope that's something that's being factored into your analysis as you think about how foreign countermeasures could impact the American economy generally, and then in terms of particular sectors and parts of the country. So unpacking those trade-offs for the American people I think is going to be very important moving forward. In Indiana, rural communities and export driven manufacturers oftentimes feel the consequences and they feel the consequences first. So Ambassador Greer, is USTR actively mapping out which sectors and regions are going to bear the brunt of certain retaliatory measures and thinking about contingency plans?
Jamieson Greer (01:29:20):
So Senator, thank you. Thank you for your concern. And I know this is something that we all watch. I watch it very closely. The president watches it. Whenever there's any kind of announcement of proposed retaliation, we look at it very closely. We look at the tariff lines, we look at what might get hit. The good news so far is that most countries have said they're not going to retaliate on this and that they would like to seek to talk to us first, find out more about the program, what they can do to meet our goals, which as you know, we're dealing with an emergency in terms of manufacturing and our trade deficit. And so that is what most countries have chosen to do. My sense is that if there are some countries that choose to retaliate, regardless of our need to address this emergency, our hope and expectation is that countries will do what they've said, which is bring down their tariffs and non-tariff barriers to provide better markets and alternative locations.
Senator Young (01:30:09):
Well, as I communicate some of the impacts in my state to your office, and as I know you and your team review this, I hope you will keep those considerations in mind as you develop your negotiating priorities.
Jamieson Greer (01:30:25):
Yes, we certainly will and look forward to continued collaboration with you.
Senator Young (01:30:30):
In other areas of federal policy, we have clear metrics or criteria to measure success. We do it in social policy, we do it with respect to education policy test scores. We do it in defense policy. We try and measure readiness and through various metrics. But in trade policy, especially tariffs, we seem to lack a clear set of metrics and a feedback loop. Does USTR have a formal process to evaluate whether these tariffs are actually achieving their goals, whether that's reshoring or market access or reciprocity, some metrics associated with that? I'll let you speak to that, sir.
Jamieson Greer (01:31:21):
Senator, as we've stated, the underlying basis for this action is the national emergency rising from the trade deficit. President Biden left us with a historically high $1.2 trillion trade deficit, which we understand and know to be driven at least in part, in large part by non reciprocity. And so when we're looking at whether that emergency is abating or being affected is we're looking at outcomes. Certainly if parties, if other countries are bringing in their tariffs and their non-tariff barriers, that's a good indicator. That's the right direction. We also want to make sure that the trade deficit is going in the right direction.
(01:31:56)
And that means two things. It means we have better access and we can export more to these other markets. But it also means that they're not using us as a dumping ground for their overproduction or their subsidized products. And so it goes both ways. And so it's a country by country analysis. We're looking at it case by case. They come in and talk to us on a country specific basis where we can articulate to them what their trade barriers are, right? I've got this big book with all the trade barriers, what their non-reciprocal tariff rates are and what we expect in terms of fair trade.
Senator Young (01:32:25):
Well, thank you. I'm already over time. It's amazing how quickly we go through this, which is why I really appreciate that direct line to you and your team. I should also mention that we heard from Secretary Bessent to discuss tariffs the other day as well. We'll be in touch. We want to work with you on critical minerals policy, on digital trade policy and many other areas that I know are your priorities as well and President Trump's priorities. And thank you for your ongoing efforts to bring more clarity to the markets and to our businesses and farmers
Senator Young (01:33:00):
So that we know exactly what lies ahead. Thank you.
Senator Ron Wyden (01:33:03):
Senator Johnson.
Senator Ron Johnson (01:33:04):
Thank you, Mr. Ranking Member. Mr. Ambassador, welcome. So you're hearing a fair amount of agreement from the Finance Committee here. First of all, I think there's agreement that we recognize that America's been very generous in opening up our markets. Our trading partners have taken advantage of us. We don't have fair trade. But I think you're also hearing that our constituents rely on trade, and they're going to be harmed by it. So I handed you 10 case studies. And by the way, for the 10 that were willing to go public, probably got another 50 that were concerned if they went public, that they may not get the exclusions. Now, I'm somewhat disappointed here that exclusions of some of these things are being ruled out at this point in time. They're very specific situations that I think you ought to consider exclusions for because I don't often agree with the members on the other side of the aisle.
(01:34:05)
But in many cases here today, particularly when they're expressing concern about small businesses in their states, I'm hoping you're very … And I hope you and the President are very sensitive about companies potentially going bankrupt by these actions. Again, we want fair trade, but I hope you recognize tariffs are double-edged sword, I would argue a somewhat blunt instrument. A question I have for you … There's no doubt that we have offshored some very crucial products, pharmaceuticals, high-end semiconductors, rare earth minerals. Do you have a list of what those products are that we must in some way, shape, or form re-shore?
Jamieson Greer (01:34:51):
Thank you, Senator. And I appreciate the communication we've had. And I've received your letters. And we'll take a close look at those to make sure we're incorporating feedback as we develop the policy. You'll note in the action we took last week, there were certain sectors that we excluded from the tariff action because we think they need their own investigation and consideration, whether it comes to tariffs or other actions. This includes semiconductors, it includes pharmaceuticals, like you're talking about, certain metals, like copper, and also critical minerals. These are areas where we have to re-shore. We need to be able to think about the best way to incentivize this. There are things we can do as executive branch. And there are things that Congress can do. And especially with the tax bill coming up, I think these are the kinds of things where we need to [inaudible 01:35:39] the right incentives.
Senator Ron Johnson (01:35:39):
So you're not using tariffs with pharmaceuticals and semiconductors or rare earth minerals.
Jamieson Greer (01:35:44):
So right now, they're not subject to a tariff.
Senator Ron Johnson (01:35:46):
Because you want them brought in here because you know they're crucial. There are other products are also crucial that you are applying tariffs to.
Jamieson Greer (01:35:54):
So we are doing investigations right now, and we're considering with respect to pharmaceuticals and semiconductors. The President's been very clear about this. He said it several times because tariffs are a tool that can use to create incentives. What we can't have is the status quo. The status quo has not worked.
Senator Ron Johnson (01:36:08):
Do you believe a trade deficit is just per se always bad?
Jamieson Greer (01:36:13):
I think the situation, what we have, Senator, is a large and persistent trade deficit. In normal economic structures and normal markets, you would have a deficit one year or surplus one year. But what we have is a structural, persistent and growing deficit.
Senator Ron Johnson (01:36:28):
And again, and as a result, offshore some crucial products.
Jamieson Greer (01:36:32):
Yes, that's a big part of it. Yes, sir.
Senator Ron Johnson (01:36:33):
Okay. But do you want to onshore, for example, very high-labor content products when, by the way, we're pretty low on employment rate? When I went to college, 5% was full employment. We're at 4.2. I've been in manufacturing since late '70s. You couldn't hire enough people in manufacturing. Back then, situations even got worse. So I would argue that I'm far more concerned about our budget deficit at 2 trillion. And I realize the trade deficit, we have problems with that, but I think a bigger problem is we don't have enough workers. So are you factoring that into your calculation in terms of what you're actually trying to accomplish here? All for bringing back these crucial products so that we don't have national security issues with the things that we can't manufacture. But again, I don't want to bring back high-labor content. Now we want to diversify our supply chain. Bad to have that all in China, as we saw certainly with PPE. But a diversified supply chain around the world because I think trade is a win-win situation. It should be. What are your comments on that?
Jamieson Greer (01:37:41):
So I think when it comes to workers, so first of all, we have about 2 million discouraged workers, right? And these are folks who should come off the sidelines, for sure. I think the factories that are being built and will be built in the United States will leverage both automation and workers, right? I don't think we're going to have lots of … It's not the kind of labor that's done in some of these other countries. I think our folks are innovative and the newest factories use a lot of automation, but also workers and people who make the products, the industrial robots that contribute to that automation. But I think we need to be in a situation where we have production here, right? We need to think not just in terms of quarterly earnings, but in the next century. And how do we set up the American economy now? How do we deal with the emergency now to make sure we can produce far into the future?
Senator Ron Johnson (01:38:27):
Again, I would ask that these case studies be entered in the record. And I just really ask you and President, focus on the products we actually need as opposed to using this broad instrument. There's going to be an awful lot of collateral damage. People are already feeling that pain. So I hope you're sensitive to that. Thank you.
Senator Mike Crapo (01:38:44):
Without objection. And Senator Tillis is next.
Senator Thom Tillis (01:38:46):
Thank you, Mr. Chairman. Ambassador Greer, thank you for being here. Back in the '90s, I was in management consulting. And there was a new platform that came out that promised to transform the business industry, ERP. Some of the early attempts at implementing the system proposed an alla prima approach. Let's do it all at once. Let's change the plumbing out. Let's get it all in, get it done. Rip the Band-Aid off. It proved to be hugely unsuccessful. There were a lot of very visible projects. And the industry decided there needed to be a methodical sort of prioritization of what parts of the business needed to perform better sooner. And how do you layer onto that a comprehensive strategy? It looks like we've got a novel approach here in terms of an alla prima approach. I'm not a trade expert. And I'm not going to question it at this point.
(01:39:39)
I do have a question about … At the end of the day, the other thing in management consulting we like to focus on is this concept of one throat to choke. In other words, when you're finally taking a look at a strategy, someone has to own it, and you can't say that it's the President or the Vice President. So my first question to you, in this scenario, the decision- maker who decided the alla prima approach, who has obviously had to have spent time anticipating what we saw in the markets and some of the pushback, I'm assuming this all got gamed out. Because it's a novel approach, it needed to be thought out. Whose throat do I get to choke if this proves to be wrong?
Jamieson Greer (01:40:18):
Well, Senator, you can certainly always talk to me, but I would-
Senator Thom Tillis (01:40:21):
But are you at the tip of the spear?
Jamieson Greer (01:40:23):
Well, I'm at the tip of the spear for … Certainly.
Senator Thom Tillis (01:40:25):
Did you propose the alla prima approach?
Jamieson Greer (01:40:27):
So first of all, I would push back, Senator, just a little bit on this. For now, we've excluded pharmaceuticals and semiconductors-
Senator Thom Tillis (01:40:34):
Okay. Well, let me-
Jamieson Greer (01:40:34):
… to take a different kind of approach.
Senator Thom Tillis (01:40:34):
That's good. Let's get to another question.
Jamieson Greer (01:40:36):
And we've excluded USMC [inaudible 01:40:37]-
Senator Thom Tillis (01:40:37):
Section 232 and 301. We know particularly section 232 is still in aluminum. Section 301 is Chinese imports where there's no other provider. I overheard you say that maybe … Or I thought I heard you say in response to another question that for the near term, there won't be any exclusions. Is that true of China where they have said the US is unilaterally bullying and completely groundless and they're going to fight to the end? Are they, 232 and 301 tariffs, exclusions on the shelves until we got to a reasonable agreement with China? I'm just trying to answer a question that I have several people in North Carolina asking.
Jamieson Greer (01:41:17):
So the President, again, is the final decision-maker on all of these things. And he has directed that there not be exclusions or exceptions.
Senator Thom Tillis (01:41:24):
There will not be any exclusions on steel, aluminum, or any products that are only manufactured in China for the foreseeable future until China determines what the end is. They said they're going to fight to the end. Again, I'm just trying to communicate-
Jamieson Greer (01:41:38):
Yes, that's the President's policy, sir.
Senator Thom Tillis (01:41:40):
… questions that I've asked. So there will be no exclusions.
Jamieson Greer (01:41:40):
Yes.
Senator Thom Tillis (01:41:41):
I won't waste your time asking for them. That's the main reason I wanted to ask the question. So again, I'm just trying to get my head around the logic of an alla prima approach. And I'm waiting to see it be successful. But it just seems like we've decided to begin a trade war on all fronts. And that's okay if the person who thought this through has an answer for why you go after partners that we have a very long-storied relationship with. Maybe we give some developing countries a break because we're trying to actually get their economies functioning. Make them look to the West versus to Chinese investment.
(01:42:24)
So it just seems like I'm getting my head around the alla prima approach. I'm not condemning it because I'm not a trade expert, but I still at some point … And I understand that you are the trade rep. So if you own this decision, then I'll look to you to figure out if we're going to be successful. If you don't own the decision, I'm just trying to figure out whose throat I get to choke if it's wrong and who I put up on a platform and thank them for the novel approach that was successful if they're right.
(01:42:51)
But here's what I'm really worried of. I'm not going to ask any more questions. I'm just going to tell you every time we've talk about people having patience, we need to understand that the Founding Fathers made damn sure that that patience was never more than about 14 months, really. Everything that we need to do to know what the political environment is going to be about next year, it's going to be done by February of next year. So in your mind, do you believe that over the course of the next 14 months, we're going to have a level of certainty? And the people in the trailer park that I grew up in, who are going to bear the brunt of some of these short-term cost increases, maybe some job displacement for a period of time, how are they going to be feeling in Groundhog Day 2027 or 2026? Do we feel like the majority of this will be resolved? And I'll be able to thank whoever thought that the alla prima approach was a good idea? Because that's about the timeline we've got to work with.
Jamieson Greer (01:43:58):
Well, Senator, these people who voted for the President is the same situation I grew up in. You know that. These people-
Senator Thom Tillis (01:44:05):
I agree, but let me just finish here because I don't want to get in the way of my colleagues.
Jamieson Greer (01:44:08):
You're going to be [inaudible 01:44:08]. Yes.
Senator Thom Tillis (01:44:08):
I'll be 65 in August. Every day, 11,400 people celebrate their 65th birthday. That's 4 million a year. Let's say from 60 to 65, people looking at their 401(k) statements. They did vote for President Trump. They voted for me. I hope that they will again in both cases. Well, maybe not the President, but I intend to run for re-election. I'm just trying to figure out if they're going to feel good about this because a long-term play in American politics and long-term play in American policy, public policy formation is about 12 months from the beginning of an administration. I wish you well, but I am skeptical. Thank you.
Senator Mike Crapo (01:44:49):
Senator Smith.
Senator Tina Smith (01:44:51):
Thank you, Senator Crapo. And welcome, Ambassador Greer. So seems to me that President Trump has started a big trade war. And the war is with everyone on multiple fronts, with allies as well as adversaries. I think this is a little bit of what Senator Tillis was getting at. It feels really indiscriminate and chaotic. And apparently we're still just in the early days of this. And I just need to tell you that Minnesotans are freaked out. Farmers who are experiencing, you and I have talked about this, one of the worst farm economies in the last 25 years are looking at lower prices and higher input costs. Minnesotans who work on the Iron Range, which is a source of 80% of the iron ore that goes into American-made steel, they want fair trade. They want us to stand up to illegal steel dumping. But 500 of them have been laid off because demand for American cars has been slumping.
(01:45:50)
I could go on and on in every sector. Consumers are freaked out. This looks like a giant sales tax to them. Retirement, stock market plummeting. And it's very hard for people to understand what is going on here. So what I want to do is to get an understanding from you of what you see as the goals of this war that we're in because at various times, it's been described as goals to raise revenue, to stop fentanyl trafficking, close trade deficits. So is the goal here to raise revenue for the Federal Treasury?
Jamieson Greer (01:46:25):
Senator, this is not a trade war. Most countries have said they're not going to retaliate. We have an underlying emergency, the goal of the trade deficit, where President Biden left us with the $1.2 trillion trade deficit. And the goal is to address that and the offshoring that led to that and the non-reciprocal treatment that led to that. That's the goal. Certainly, there's a tariff revenue effect. If the countries do not do this, then they will be subject to the tariff. They'll have tariff on foreign goods instead of American-made goods.
Senator Tina Smith (01:46:51):
Okay. So if the goal is to close trade deficits, then that would mean that the tariffs are a negotiating tool here. Is that right? Is that how you see it?
Jamieson Greer (01:47:03):
So the-
Senator Tina Smith (01:47:04):
Or are you trying to use them to-
Jamieson Greer (01:47:05):
Well, it can go both ways, Senator. So on the first, we've talked a lot about negotiations because a lot of these countries, they have closed off markets to our exports in unfair ways. They've done it for decades, and nothing has persuaded them. Sitting down, talking nicely hasn't persuaded them.
Senator Tina Smith (01:47:20):
But if you were trying to … So I'm all for fair trade. And I'm all for the idea that if somebody is not trading fairly with us, if they're not giving us fair markets, then we need to have a strategy to go after that. But yet, this is a blanket approach. It's an across-the-board approach which is going to contribute to raising costs. And that's why it just feels, I think, so chaotic to people.
Jamieson Greer (01:47:46):
Well, the trade deficit is a global issue. So you can't … If you're trying to get the trade deficit, you can't just pick one or two countries and say, "We're going to do this and become Swiss cheese." That would not be coherent. What's coherent has a global approach to what's a global issue to take these countries country by country, figure out how we can address our trade deficit with them and address trade market barriers with them. And that's the right approach, and that's what's happening. That's what the President's directed.
Senator Tina Smith (01:48:09):
But as Senator Warner was pointing out, we have a … I guess it's a floor, you could call it, but a 10% tariff even with countries where we have a trade surplus. And by the way, this formula that the administration used to assign this so-called reciprocal tariff, it just seems so arbitrary. Where did that formula come from?
Jamieson Greer (01:48:31):
It's straightforward and it's common sense. It came from White House economists. And they proposed that looking at a country's trade deficit is a good approximation of the net effect of the unfairness, of the higher tariff rates, the higher trade barriers, the unfair trade practices, the dumping, the subsidies, all of that. And that's how you can capture that.
Senator Tina Smith (01:48:48):
Well, so would you adapt that as … It's based on one year. And of course you know, trade surpluses, deficits can vary quite a bit from year to year. Would your plan be to change it if you get new yearly data? And then that would suggest, I guess, that the tariffs would be in place for a long time.
Jamieson Greer (01:49:06):
Well, we need to assess. Again, I think it becomes country by country. We have the baseline 10% to make sure there's no arbitraging of different jurisdictions. And all these countries that are subject to the highest rates, most of them have already come to talk to us about how to get it down. We have to take this step by step. We have to take it country by country to address these issue. The status quo just won't work anymore. And we can't do it piecemeal, right?
Senator Tina Smith (01:49:29):
And I'm not arguing for the status quo, Ambassador. I'm not arguing for the status quo, but I am questioning the rationality of this policy that is doing … It's so chaotic and it seems so arbitrary. And again, it seems so internally inconsistent because, for example, if your goal is to onshore manufacturing, something that I think many of us on this side of the dais believe strongly, that we need to be making things in this country again. But then that would suggest that these tariffs need to be in place for a very long time because what Capitol wants is consistency and stability and predictability. Yet, at the same time, the administration seems to be arguing that we would be waiving some of these tariffs if we could somehow magically negotiate 50 new trade agreements with 50 different countries. I know my time is up here. I wanted to ask you a question about trade adjustment assistance, which I will follow up as a question for the record. But again, I think that my constituents are freaking out here. And I understand why. Thank you.
Senator Mike Crapo (01:50:36):
Senator Luján.
Senator Ben Ray Luján (01:50:36):
Thank you, Mr. Chairman. Thanks for holding this hearing. Now, Mr. Greer, it's been less than a week since President Trump started this, what I'll describe as a reckless tariff war. It certainly feels that way. Families are seeing higher costs. Businesses across the country are hurting. And we've seen one of the worst drops in the stock market in over 35 years. Do you believe that there's currently higher costs a week after the President put these tariffs into place?
Jamieson Greer (01:51:08):
Senator, we haven't yet seen how those costs are going to be allocated between the foreign producers and their importers here. We haven't seen the data on that yet.
Senator Ben Ray Luján (01:51:14):
Do you believe businesses are hurting a week after President Trump put these tariffs into place?
Jamieson Greer (01:51:20):
I've heard from a lot of businesses. Some of them are excited about the prospects. Some are concerned because they're import dependent instead of US product dependent. So I know there are varying views on this.
Senator Ben Ray Luján (01:51:29):
Let me ask this question because this one's based completely on fact, on something I think you look at every day. You probably have some of these numbers in your phone that I'm guessing might be in your pocket. Have we seen one of the worst drops in the stock market in over 35 years?
Jamieson Greer (01:51:44):
We've certainly seen volatility.
Senator Ben Ray Luján (01:51:47):
Have we seen one of the worst drops in the stock market in over 35 years?
Jamieson Greer (01:51:52):
I think … And Senator Warner-
Senator Ben Ray Luján (01:51:55):
You can say yes.
Jamieson Greer (01:51:55):
… talked about this-
Senator Ben Ray Luján (01:51:55):
We'll move on. If you don't want-
Jamieson Greer (01:51:55):
Well, I know everyone's concerned about Wall Street. And I'm just concerned about Main Street and getting these jobs back, sir.
Senator Ben Ray Luján (01:51:59):
Okay. Let's talk about Main Street, Mr. Greer. Last time you were here, I asked if President Trump's trade war would hurt New Mexico businesses and families. You dodged my question. You told me, quote, "I can't guarantee economic outcomes." When I pressed you, you told me that you want me to, quote … You asked me to, quote, "Hear from me on what the impacts of these tariffs are." Well, Mr. Greer, I'm here to tell you today New Mexicans are hurting. I understand why you would not guarantee that New Mexicans wouldn't be hurt because you probably knew what I thought then that we now see today that this is hurting people back home. Now, I want to ask you the same question again. Yes or no, will President Trump's tariffs harm New Mexican businesses and families?
Jamieson Greer (01:52:46):
Senator, I just don't think they will. Right now, you have duty-free trade with Canada to Mexico where they comply with the rules, where they have US, Mexican, and American content. This is designed. And I would hope that being a border state, this is something that you find valuable. And that's what we're trying to do. We're trying to incentivize production in the United States. We want North America to be competitive. We can't have the status quo. We have to have a situation where we have manufacturing here, where we have foreign market access for our producers. And we want New Mexico families and companies and communities to prosper.
Senator Ben Ray Luján (01:53:22):
Mr. Greer, do you agree with President Trump that families are going to have to feel a little pain?
Jamieson Greer (01:53:27):
I'm not going to speak for the President. My sense-
Senator Ben Ray Luján (01:53:30):
I didn't ask for you to speak for him. I know none of you have the courage to stand up to him. What I'm asking you, Mr. Greer, is do you agree with what the President said about these tariffs in that people are going to have to feel a little pain? That's my question.
Jamieson Greer (01:53:43):
If we have companies that feel pain because they're adjusting their supply chains, that more American product made by American workers, that's an adjustment we have to make to prepare for the future. We can't keep doing the same thing we always did. And if companies are having trouble adjusting their supply chains, which I'm very sensitive to, this is something that we have to deal. We can't do nothing for four years, like we saw under Biden where there was just nothing going on on trade. We have to act.
Senator Ben Ray Luján (01:54:04):
Let me ask the question a little differently. Yes or no, do you agree with President Trump when he said families are going to have to feel a little pain?
Jamieson Greer (01:54:13):
Of course, I agree with the President.
Senator Ben Ray Luján (01:54:14):
Thank you very much.
Jamieson Greer (01:54:15):
But I expect that the jobs we see for manufacturing is going to far outweigh anything.
Senator Ben Ray Luján (01:54:18):
Mr. Greer, please, I'm coming short on time, sir.
Jamieson Greer (01:54:18):
Yes, sir.
Senator Ben Ray Luján (01:54:19):
So look, economists are predicting that Trump's trade war is going to cost American families about $4,000 per year. I disagree with your assessment now in agreeing with Donald Trump that families should feel pain. When I asked you about the economic impact to families back home, you said, "No, they're going to do great. Things are going to be wonderful. New Mexico should be appreciative of all these things." I guess pain is the kind of relief that you believe that families should be going through. It is what it is. As I've been saying to my colleagues here, I understand the outcome of this last election. Donald Trump is now the President of the United States. He won the election. My Republican colleagues in the Senate won the election. They controlled the votes in this chamber. They controlled the votes in the House. That's why we're seeing these budget resolutions. Alls I'm saying is own up to what you want to do. You want to do it. Just be honest with the American people about what's going on. I appreciate the time today, Mr. Chairman. I yield back.
Jamieson Greer (01:55:13):
The same economists who are crying out now were the ones who said we were going to crash the economy in Trump 1. We put tariffs on China, and real median household income went up for Americans by $7,000. Inflation went down, unemployment went down. So we have history showing that we know how to use this. We know how to use these tools.
Senator Ben Ray Luján (01:55:31):
Mr. Chairman, since Mr. Geer went on, I will just follow up again. Then help explain the pain that people are feeling today with your assessment of what Donald Trump said that families should feel some pain. That's all okay with you all?
Jamieson Greer (01:55:45):
Senator, we're not going to be in a situation where we keep allowing Wall Street to run the economy. And as we're making that transition, companies will need to adjust, sir.
Senator Ben Ray Luján (01:55:50):
You know what, Mr. Geer? Let's spend a little time at the grocery store, talking to some of my constituents back home. I'll take you around. We'll walk around. We're not going to give anyone a heads-up. You just go do it. And let's see what the regular folks back home are doing, including the people that come and talk to me that say they voted for this President. This is not what they stand up for. Farmers and ranchers are getting the short end of the stick from USDA where these grants are being cut. And they say, "Oh, no, it's because we don't want to give people food." Bologne. You're cutting the lifeline for these farmers and ranchers as well in addition to what's happening with these inputs with tariffs. Look, you all are a lot smarter than I. I'm just a regular person back home. I'm one of them.
Senator Mike Crapo (01:56:27):
Senator Warnock.
Jamieson Greer (01:56:27):
I'm happy to [inaudible 01:56:28] with you, sir.
Senator Ben Ray Luján (01:56:28):
That's the difference between you and I, sir.
Senator Mike Crapo (01:56:30):
Senator Warnock.
Senator Raphael Warnock (01:56:35):
Thank you very much, Brother Chair. Since President Trump announced his tariffs last week, the stock market has dropped more than 10%. We've talked about that. I'm more concerned about the impact on ordinary people. This, for me, is a regressive tax. It's a tax on families who are already dealing with increasing costs and are trying to figure out how to make their lives work. I heard you say, Mr. Greer, that you don't think this is a … That we're in a trade war. And I respect your expertise on trade. But tomorrow, the Trump administration will implement its reciprocal tariffs, which means businesses and families have had less than one week to plan for the largest tax increase in more than 50 years. So we are escalating. And so we can go back and forth about whether we think it's a trade war. I'm focused on how this is impacting families.
(01:57:37)
Normally, when tariffs are being discussed, businesses and industries have time to plan. And the government often provides an orderly and clear process for American companies to apply for exclusions from tariffs when it's not possible for them to sell a product without importing parts or all of it because no one manufactures it here. We all know uncertainty is the worst thing for business. I'm hearing this from farmers. I'm hearing it from folks in the manufacturing sector. So I hope we can provide some certainty. What should a multinational retailer do about their products made only overseas or that contain parts only made overseas? We're seeing this in our automotive sector in Georgia. Should they just raise their prices on families to account for the new tax? Or is there a process for that company to reach out to the White House for an exclusion?
Jamieson Greer (01:58:34):
So Senator Warnock, the section 232 on autos is a Commerce Department action. One thing they've done is they have said that they would be willing to give some kind of a credit for US content in parts and components, and they can approach the Commerce Department about this. It's not a decision I'm making, but I know that this is one alternative. I'm mindful when I hear this. Obviously, we're sensitive to these dynamics, but it just reminds me that we lost 5 million manufacturing jobs over the last 20 years, and that's part of the reason why we're in this situation now, and we just have to bring those back. It's important to bring them back now before the situation gets worse.
Senator Raphael Warnock (01:59:11):
But what … The question is, what do they do? Do they pass that price on to consumers?
Jamieson Greer (01:59:16):
Well, what we've seen is Ford and GM, for example, have announced actually that they're giving discounts. That was the big news last week, last Thursday. They'd be giving discounts going forward. These companies often are going to figure out how they allocate costs among themselves. And it rarely gets down to consumer and one-for-one basis.
Senator Raphael Warnock (01:59:31):
So the company might figure it out, I think, is [inaudible 01:59:33].
Jamieson Greer (01:59:33):
Well, they can approach the Commerce Department, talk about the credits they could get.
Senator Raphael Warnock (01:59:35):
Let me go smaller. Last week, my office met with Angela Hawkins. She's the founder of Bamblu, a small business in Atlanta that sells bamboo-based sleepwear and sheets, particularly for people with severe and sensitive skin allergies, like her husband. Angela's products are made overseas because you can't really find bamboo fabric made in the United States. What should Angela do? Pay the new tax, raise her prices, and risk losing customers? Or is there a process for her to apply for an exclusion from the Trump White House?
Jamieson Greer (02:00:07):
So Senator, the President has said that in connection with this action, he's not going to have exclusions or exemptions beyond what's in the program already for certain products.
Senator Raphael Warnock (02:00:18):
So she'll just have to figure it out.
Jamieson Greer (02:00:19):
She'll have to work with her business partners and find about sourcing. And they're-
Senator Raphael Warnock (02:00:23):
She'll have to either raise prices and risk customers basically is the answer, right? Because she can't get bamboo here.
Jamieson Greer (02:00:31):
It will depend on the tariff rate. Every country has a different rate, and some are much lower than others. And so there, again-
Senator Raphael Warnock (02:00:37):
So she might even go out of business. Let's go even smaller. Early estimates show that President Trump's tariffs will increase the cost of goods by $3,800 for an average American household. Many critical baby goods, like cribs and baby gates, are produced abroad or have foreign-made components. I went through this not long ago as a parent of young children. For an expecting family in Augusta, Georgia, who may now see a 50% price increase for that stroller or car seat, what is the process for that family to apply for a White House exclusion? I guess if the business owner can't get one, they can't get one either, correct?
Jamieson Greer (02:01:22):
So there's not an exclusion process. That's right.
Senator Raphael Warnock (02:01:25):
So they would just bear the costs.
Jamieson Greer (02:01:27):
Well, I think the studies you're talking about, the economists, they got it wrong in Trump 1. They said there was going to be inflation because of tariffs, and it went down. So when I hear them now saying the same thing, I just don't trust what they're saying. And the fact of history shows that it's not a one-to-one. The highest inflation we ever saw was under Biden for housing and education and healthcare and all of these things. And I don't know where everybody was then when that was skyrocketing by 20%.
Senator Raphael Warnock (02:01:51):
What if their child is potassium deficient and now bananas are more expensive? Last I checked, we don't have the climate to grow bananas in the United States. Who should that family reach out to the White House for an exclusion for that price hike on those bananas?
Jamieson Greer (02:02:05):
Well, again, as we've discussed, there's not an exclusion process. I think we've waited too long with the status quo. I know people want the status quo. They want the trading system that Wall Street likes, but we can't have it anymore.
Senator Raphael Warnock (02:02:14):
Let me be really … So here, you and I agree. Nobody wants the status quo. This economy is not working for working families, for ordinary people. And I would submit that what the President did last week in such a reckless and sudden way is adding even more pressure on these families. Thank you so much.
Senator Mike Crapo (02:02:36):
Senator Warren.
Senator Elizabeth Warren (02:02:38):
Thank you, Mr. Chairman. Donald Trump is single-handedly driving this economy off a cliff with no evidence to back him up. He's claimed emergency authorities to slap new tariffs on nearly every product we import from nearly every country. But Congress has the power to reverse these tariffs, and we should do so immediately. Tariffs can be a tool to help build things in America, but Trump has slapped tariffs on, then off, on, then off again with no rhyme or reason. And the uncertainty about the long-term rules makes companies far less likely to invest in manufacturing or jobs here in the United States. If Congress doesn't stand up to Trump, economists predict a recession before the end of the year. And Fed Chair Jerome Powell says we're in a real danger of, quote, "Both higher unemployment and higher inflation."
(02:03:39)
Translation? Trump's tariffs will push millions of workers out of jobs and push prices up at the same time. So Ambassador Greer, we've heard a lot of conflicting statements about whether these tariffs are here to stay, how many more rounds of on-off we're going to do. So let me ask
Senator Elizabeth Warren (02:04:00):
… the question from a different perspective. Ambassador Greer, we lost 700,000 jobs each month in the last recession. If 700,000 Americans lose their jobs, will the Trump administration suspend these tariffs?
Jamieson Greer (02:04:19):
Senator, I think the economists who are making these projections who often are in favor of fully unfettered free trade are the same ones who said in the first Trump term that tariffs-
Senator Elizabeth Warren (02:04:31):
Mr. Greer, let me stop you there. I'm not asking about projections. I'm asking if the numbers show that 700,000 people have lost their jobs because of these new tariffs that Trump has slapped on, will the administration reverse course-
Jamieson Greer (02:04:48):
Senator-
Senator Elizabeth Warren (02:04:48):
… and lift those tariffs?
Jamieson Greer (02:04:50):
Senator, that's not going to happen. We've lost 5 million manufacturing jobs over the years, which is the number I'm most worried about, and we have to get those jobs back.
Senator Elizabeth Warren (02:04:57):
So I take that as a no. Let me try another one. Moody says that, "If the Trump tariffs remain in place, we'll definitely plunge into a recession, which will ultimately cost three and a half million Americans their jobs." So Ambassador Greer, if Trump's tariffs push three and a half million people out of work, will the Trump administration reverse course and lift those tariffs?
Jamieson Greer (02:05:25):
Senator, the Wall Street analysts are wrong. They never want to have any kind of change to the status quo.
Senator Elizabeth Warren (02:05:29):
I'm not asking you for right or wrong.
Jamieson Greer (02:05:30):
But that's who you're quoting to me, Senator.
Senator Elizabeth Warren (02:05:32):
I'm asking you a number. If the number is three and a half millions, if it never comes to pass, you don't have to worry about your answer. But if three and a half million people lose their jobs because of these tariffs, is the Trump administration prepared to lift them?
Jamieson Greer (02:05:47):
Right now this minute we're working on negotiations with countries who believe they can achieve reciprocity with us and get their trade deficit down. And that's the emergency we're focused on. It's not going to be a situation years from now, we've lost millions of jobs.
Senator Elizabeth Warren (02:05:59):
Let me try one more time. If Trump tariffs push workers out of their jobs and raise prices, as Fed Chair Powell has predicted, will you reverse course then?
Jamieson Greer (02:06:13):
I think also with respect to Chairman Powell, who I don't know personally, but I know the president makes decisions on trade and he rarely takes advice from Chairman Powell on this. We found in Trump one that you could put tariffs on China and you could make it work and have a lower income unemployment, lower in inflation, and increase real median household income over time as we reshore. And that's what we have to do, Senator.
Senator Elizabeth Warren (02:06:34):
What I'm hearing you say is that no one can hear a rhyme or reason to why the tariffs are off again, on again, off again, on again. But what you're telling us is the fact that hundreds of thousands, even millions of people could list their jobs and that prices could go up, will not be a factor for you or for Donald Trump for rolling those tariffs back.
(02:06:56)
Look, if Republicans are serious about protecting American jobs and fighting inflation, then they can join Democrats right now to pass a resolution to fix Trump's restless tariffs. This economy is teetering on the edge of collapse. We have the power right here in the Senate and over in the House of Representatives to take this authority away from Donald Trump. We can get this voted on. Senator Wyden and I have already entered or about to introduce the bill to do that.
(02:07:30)
And if Republicans are serious about not playing the red light, green light with tariffs, but instead about protecting our economy, our families, our jobs, and keeping prices low, then Republicans should join us on that. Thank you, Mr. Chairman.
Chairman (02:07:45):
Senator Welch.
Mr. Welch (02:07:47):
Thank you. There's a place for tariffs, on China. Targeted tariffs make some sense. What is being rolled out and the way this is being done is so destructive and so reckless and so irresponsible that it's creating nothing but economic chaos, uncertainty and suffering for a lot of people. These are really disastrous for Vermont. I just want to go through this question of how did these roll out? You did not set as our trade representative the tariff rates on all of these countries that were on display when the president announced them. Right?
Jamieson Greer (02:08:28):
Senator, the president made a decision on how he wanted to have the tariff set and the economic cabinet advised him on that.
Mr. Welch (02:08:36):
Right, but you did not set the 50% rate on Lesotho.
Jamieson Greer (02:08:40):
I personally didn't. No.
Mr. Welch (02:08:42):
Yeah. Can you explain how that makes any sense?
Jamieson Greer (02:08:45):
So the way that the methodology works is the emergency we're talking about is premised on the trade deficit, which we think is-
Mr. Welch (02:08:52):
No, no, no. I meant-
Jamieson Greer (02:08:53):
Well, I'm trying to explain the methodology, Senator, if you want to hear it.
Mr. Welch (02:08:55):
I want… This has got to get concrete because this has real impacts on everyday people. So the rhetoric about what the goals are when the rollout is so in conflict with achieving anything other than economic downturn. How did the 50% rate on Lesotho be decided?
Jamieson Greer (02:09:18):
So when you have White House economists who assess the trade deficit-
Mr. Welch (02:09:22):
But you had no role in it?
Jamieson Greer (02:09:24):
Well, I certainly had a role in it. Everyone was advising the president on how to do this.
Mr. Welch (02:09:27):
Right. But tell me why he came up with 50% for Lesotho.
Jamieson Greer (02:09:29):
Well, I'd like to tell you, Senator. So when you look at a country's trade deficit, we believe that captures some of the unfairnesses and you have to have a uniform methodology. You can't be arbitrary or capricious.
Mr. Welch (02:09:39):
I'm going to keep going because Lesotho does diamonds in-
Jamieson Greer (02:09:43):
I'm happy to talk more to you about the methodology.
Mr. Welch (02:09:47):
My sense is there is no methodology. I asked Trump, just got fed up and said, "What the heck? We'll just go with this formula that makes no sense." Number two, the issue of these tariffs. Now the phone is ringing off the hook at the White House from countries wanting to get a break. Right?
Jamieson Greer (02:10:06):
They want to talk about have reciprocal trade with us and how to get that deficit down.
Mr. Welch (02:10:09):
That's right. So here's the structural issue that is really alarming to me and I hope to all of us. We are using these tariffs or the president is using these tariffs from going from an economy that's based on competition to one that's based on access. In a competitive economy, your product, your service determines the outcome and how well you do. In an access economy who's got Donald Trump's number, who's got your number, who's got Lutnick's number and you call up and you get a break. That's an access economy. Is this going to be the arbitrary authority of the president to decide, "Yes, we'll cut the Vietnam tariff and no, we'll sustain the tariff on Lesotho"?
Jamieson Greer (02:10:55):
The way this works, Senator, is we have long-standing relationships with trade officials in these foreign countries and they work with our staff, our career staff, and they develop… If someone comes to us with an offer, we review it, we analyze it and we present it to the president.
Mr. Welch (02:11:09):
They're calling the president. I mean, you've got Donald Trump as president basically picking and choosing winners and losers and who knows on what basis. That's not a trade regime that anybody can count on. That's something they can game if they know you, they know Lutnick, they know Donald Trump. That I think was what Senator Warnock was asking about. We've got farmers on the border with Canada, they get their grain, it's going to be 25% hit. We've got consumers whose electricity bills are going up because of retaliation from Canada. Can they make a call to you, to Howard Lutnick to the president and ask for relief?
Jamieson Greer (02:11:51):
Well, we certainly talked to all kinds of constituents. We talked to labor unions, we talked to civil society, we talked to business. I would say with Canada, Mexico, they receive duty-free treatment for things that follow the rules of USMCA. If they bring in Chinese content and send it down, they won't get a break.
Mr. Welch (02:12:05):
Let me tell you the frustration I have. There is a place for targeted tariffs to help us and also to push back on unfair trade practices. I support that. That's not what this is. This is utter chaos, arbitrary and willful on the part of the president that is setting up a dynamic where he picks winners and losers rather than companies compete to do the best they can and have the benefit of good work and a good product. Mr. Chairman, I yield back.
Chairman (02:12:41):
Thank you. Senator Barrasso.
Senator Grassley (02:12:42):
Thank you, Mr. Chairman. Appreciate being here to answer questions. Look, I'm concerned Wyoming and for workers across the country, I'm worried that foreign competitors continue to use unfair trade practices against the United States, against our workers, against our producers. These practices threaten our economic security, our prosperity. We want a safe and prosperous nation. Workers in my home state and across the country are paying the price.
(02:13:07)
So can you just talk a little bit about how you determine if foreign trade and economic practices constitute an emergency for our country? I just heard our previous speaker talk about asking ChatGPT. I'm not going to do that. I'm going to ask you how is it that we determine if foreign trade and economic practices constitute an emergency for our country?
Jamieson Greer (02:13:27):
Thank you, Senator. In the first instance, when the president declares an emergency, he has to consider where there is the conditions that may impact national and economic security. And so for him, he took a look at our trade deficit, which was the largest in human history under President Biden, 1.2 trillion. And we looked at what the effect of that was, and it includes loss of 5 million manufacturing jobs, loss of 90,000 factories, loss of competitiveness with China in advanced technology.
(02:13:55)
And then we looked at what are some of the causes of the trade deficit. And certainly, there's currency manipulation, there's other currency factors, but also non-reciprocity in trade, barriers overseas, whether tariffs or non-tariff barriers that keep us out. Unfair trading practices like dumping and other things that push things into our market or subsidies or state-directed economies. And so those are the things we look at.
(02:14:16)
And then when you move to the countries, obviously it's common sense to have a baseline to make sure there's no cheating and that we can get at the deficit broadly based. And then have a higher rate for those who pose the biggest challenges in terms of the trade deficit and unfair practices.
Senator Grassley (02:14:29):
Thanks. Could I ask you about nuclear fuel? And for decades, America led the world in uranium production. Today there's virtually no commercial enrichment capacity. We're dangerously dependent on imports from other countries. Congress took a strong stand by banning Russian uranium imports. We're now seeing a troubling shift with increased uranium imports coming from China.
(02:14:51)
And we think it's the uranium from Russia going to China, which they then sell to the United States. So we've simply replaced one adversary with another. This poses to me a serious threat to our national security, to our energy independence. Wyoming has the resources in the workforce to revive American uranium production, but what we know is it subsidized foreign uranium from China and from Russia threatens to undermine our domestic industry. Were you're going to support efforts to end uranium imports from China as we continue to try to build our US nuclear supply?
Jamieson Greer (02:15:22):
Senator, I'm happy to talk to you about that and the best way to implement that kind of action.
Senator Grassley (02:15:26):
Great. Market access for Wyoming beef. Our ranchers are seeing what you recently did, what the president has recently done and say, "It's about time." And I know you heard a lot about market access today. Just specifically discuss market access for American beef. It's our number one cash crop in Wyoming. Our ranchers produce some of the highest quality beef in the world, yet our beef faces significant barriers in key foreign markets. So I do appreciate your office's efforts to document the numerous barriers that unfairly block American beef exports.
(02:15:59)
For example, Thailand imposes a 50% tariff on American beef. The European Union's numerous "green deal restrictions" limit market opportunities for our ranchers. Australia's barriers prevent the sale of a safe, high quality American beef. They've sold 29 billion into our country. We can't sell a hamburger there. So Wyoming beef producers have felt the direct impact of these unfair trade practices. And I say it's our number one cash crop. What steps do you see being taken now to open new markets and ensure fair access for our beef around the world where we've been blocked?
Jamieson Greer (02:16:35):
So Senator, as everyone knows, we have a lot of countries coming to talk to us right now who want to have more reciprocal trade, get their trade deficit down. And obviously, part of that is making sure we have access for products like beef, making sure we're exporting products like beef. I've talked to the Australians about this issue. It's always surprising because they're a great partner for us globally. This is a big issue with them, Southeast Asia as well. These are things that are on our list when people come to talk to us. It's something we've recorded for years and we expect countries to change this.
Senator Grassley (02:17:05):
Great, thank you. In terms of critical minerals, we sit on vast deposits of critical minerals in Wyoming, essential for our national security. Our state has significant reserves or rare earth elements. Are there some trade initiatives that you're taking right now that are going to pursue to counter China's dominance in the critical minerals world? Most in terms of production as well as refinement?
Jamieson Greer (02:17:29):
Yes. Well, I know for example, this is at the Commerce department, but I know they're considering whether they need to take some kind of an action and looking in a potential Section 2, 32, investigation of critical minerals to know how we can get that here, how we can get processing here in our near abroad, how to make sure we're not dependent on China for those things.
Senator Grassley (02:17:47):
Thank you, Mr. Chairman.
Chairman (02:17:48):
Senator Blackburn.
Mrs. Blackburn (02:17:51):
Thank you Mr. Chairman, and thank you for being here today. I know you have had a busy week and we appreciate that and appreciate what the president is trying to do for the broader economy. And of course, it is encouraging to hear that we have 70 countries that are coming in to negotiate tariffs and some of those non-tariff barriers that have existed. So we're grateful for all that work.
(02:18:21)
I do want to ask you about some of the foreign governments using bogus environmental regulations to really sideline American businesses. And the EU's new deforestation regulation is a great example of this. Imposing excessive reporting requirements that would shut out Tennessee pulp and paper producers from foreign markets. And also, we are seeing some of these foreign governments actually seize US assets under false pretenses. And last year we had a company, Vulcan Materials, which declined to sell its Mexican port to the government. So armed forces came in and took control of that, citing environmental licensing requirements.
(02:19:18)
And this is a pattern of regulatory abuse and it keeps our companies out of the global market. So how are you working to protect these US businesses and to deal with these foreign governments who are weaponizing their bogus regulations to restrict the market access?
Jamieson Greer (02:19:42):
Well, Senator, I always find it troubling when countries use these kind of measures as a protectionist measure. Our companies, whether they're making here and exporting or going elsewhere to produce in other countries, are always the cleanest and most responsible always. And we should always have the best treatment under those kinds of regimes.
(02:20:02)
So with respect to the two examples you noted on the Vulcan issue, I've raised this personally with Mexican trade officials and with respect to the EU forestry regulation. My understanding is right now it's a little bit on pause while they themselves look at it and take a second look. And I talk to my counterparts in Europe frequently, and this is something where I want to make sure that they're treating us appropriately under this law, not discriminating against us.
Mrs. Blackburn (02:20:27):
That's wonderful. If I could get in writing from you an update on the Vulcan port issue, that would be helpful also.
Jamieson Greer (02:20:35):
We're happy to do that, Senator. Yes.
Mrs. Blackburn (02:20:36):
Thank you. I want to talk about digital trade because President Trump really has shown great leadership when it comes to digital trade. And that was a part of the negotiations on the USMCA and it really gave us a very robust and ambitious digital trade chapter. And the provisions including cross-border data flows and data localization are critical to facilitating strategic US initiatives across a broad range of the industries. And we have an opportunity now to build on this digital chapter. And I think that could really pave a way to add other provisions on critical issues such as AI, such as quantum computing that we are dealing with. So, how could you use this digital trade chapter that we have in the USMCA to expand that globally as we look at negotiating new trade agreements?
Jamieson Greer (02:21:50):
Well, I think it's important to understand that our companies, our digital trade companies are the most competitive in the world. They're the most effective in the world. And what we don't want is a situation where they are retaliated against or they're discriminated against such that their Chinese competitors actually take up market share. I mean, that would be a disastrous situation.
(02:22:11)
And so, as countries come to us and want to talk about how to have more reciprocal trade or better trade actions, I would expect that we want to make sure that they're not discriminating against our technology companies. And we want to make sure we have a level playing field so we can have the appropriate market access that we want and whether we do that in formal trade agreements or just in commitments from these other countries.
Mrs. Blackburn (02:22:31):
Well, and as you know, digital trade is important to Tennessee.
Jamieson Greer (02:22:35):
Yes, ma'am.
Mrs. Blackburn (02:22:36):
So we're looking forward to that. Non-tariff barriers are something that get mentioned quite a bit as we are talking to companies. I know Vietnam has several non-tariff barriers and we've seen this in the USTR's National Trade estimate report. And we had a record high deficit with Vietnam in 2024. And in part that's because Chinese companies are using Vietnam to trans-ship. So will you work to ensure that any possible deal with Vietnam, because I know they've been first to the table to try to negotiate for a zero tariff, but we want to make certain that whatever is done includes provisions that will not allow China to reap the benefits of working within shipping through Vietnam.
Jamieson Greer (02:23:32):
I agree with you 100%, Senator, whether it's Vietnam or others, if they think they're going to have some kind of different rate, it can't be one that gives preference to a third country like China, where they can just take advantage of it or use it to circumvent what we're trying to do. I agree with you 100% on this point.
Mrs. Blackburn (02:23:49):
Well, thank you for that. Thank you Mr. Chairman.
Chairman (02:23:51):
Thank you. Senator Sanders.
Mr. Sanders (02:23:54):
Thank you, Mr. Chairman. Mr. Greer, thanks for being here and I enjoyed our conversation in the office last month. Let me begin by saying, as I suspect you know, that I am not a great fan of unfettered free trade. I helped lead the effort when I was in the house against NAFTA against permanent normal trade relations with China. I will never forget a visit that I made to the [inaudible 02:24:19] area in Mexico where I saw brand new factories and literally Mexican workers living in cardboard boxes. And the result of course was a loss of hundreds of thousands of jobs, good paying jobs in this country, transferring them to Mexico where people work for horrendous wages. That is the type of trade policy, which I detest.
(02:24:43)
But I want to move to an area to talk about legal basis of what President Trump has done. President Trump said, Mr. Greer, that he had no choice in terms of Canada. And I live 50 miles away from the Canadian border. He had no choice but to bypass Congress and to impose an emergency 25% tariff on Canada to stop "the massive amount of fentanyl," the millions and millions of undocumented immigrants coming from the northern border. Unfortunately, that's a lie. The truth is that the US Customs and Border Protection reported just 43 pounds of fentanyl was seized at the Canadian border last year representing just two-tenths of 1% of the total. Now, we could agree that one pound of fentanyl is too much, but if two-tenths of 1% constitutes an emergency, my guess is illegal drugs are coming in from every country in the world and that gives the President of the United States incredible power to determine tariffs.
(02:25:47)
Further, he talked about millions and millions of undocumented immigrants coming from Canada. In fact, last year there were 24,000 people, not millions and millions. First question really, we can argue about tariffs, but why does the president have to lie all of the time in order to make his point?
Jamieson Greer (02:26:08):
So Senator, I would just refute that when the president is talking about the nature of the emergency we have. This is a very serious-
Mr. Sanders (02:26:14):
Could you talk a little closer into the mic, please?
Jamieson Greer (02:26:16):
Certainly. Senator, I would just say I think you need to look at what the President issued in terms of the order for the legal basis for what we're doing. Right? I mean the president very rightly hit on this issue of fentanyl migration coming from northern Southern borders and it's a real emergency.
Mr. Sanders (02:26:30):
Well, look, drugs are a real emergency, two-tenths of 1%, you can then argue drugs, illegal drugs come from every country in the world. If you declare that as an emergency, you're giving the President of the United States unbelievable power. Let me go on that point. Let me mention to you what you probably know.
(02:26:48)
Seven Republicans have joined a number of Democrats on legislation reasserting Congress's ability to play an active role in trade and tariffs. That on the Republican side was led by Senator Grassley. And he said, and I quote, "For too long, Congress has delegated its clear authority to regulate interstate and foreign Congress, cut from commerce to the executive branch, et cetera, et cetera. He wants to reassert Congress's constitutional role and ensure Congress has a voice in trade policy."
(02:27:27)
In the last two weeks, all we have seen is reports in the newspaper. Congress has not had one ounce of authority in determining tariff policy. Do you think Congress should be completely left out of the process? Or does the president have emergency power to do anything he wants with regard to tariffs?
Jamieson Greer (02:27:48):
Senator, my staff has had over 200 meetings with congressional offices in the past two months to consult. The president's been very transparent about what he wants to do on tariffs. Congress delegated a law to him to take this-
Mr. Sanders (02:27:56):
The congress has… Mr. Greer, you can have all the meetings you want. You and I had a nice meeting, but at the end of the day, the President did exactly what he wanted to do without any discussion, formal discussion with members of Congress. He could make recommendations to Congress. That's for sure. Do you really think that he has the power on that emergency degree to reorder the trade world, global trade policy without any input from the United States Congress?
Jamieson Greer (02:28:26):
Sir, Congress gave him this law where if he determines a national emergency, he can take appropriate action to regulate imports. That's what he's done. [inaudible 02:28:33]
Mr. Sanders (02:28:33):
You think it's a national emergency? The two-tenths of 1% of fentanyl coming from Canada constitutes a national emergency?
Jamieson Greer (02:28:41):
Sir.
Mr. Sanders (02:28:41):
Do you?
Jamieson Greer (02:28:43):
The president has determined that Canada-
Mr. Sanders (02:28:45):
Do you? I'm asking you.
Jamieson Greer (02:28:45):
You're asking me about drug policy. So I agree with the president. If you have China and Canada and Mexico putting drugs into this country at different levels, then that's an emergency. We have to deal with it. [inaudible 02:28:55]
Mr. Sanders (02:28:55):
Look, we're not going to argue around the danger of drugs. Two tenths, 43 pounds of fentanyl on that basis. The president can declare an emergency with any country on earth and take unlimited power. That's called authoritarianism. Okay. That's not what a democracy does. Do you have any concerns about all of that power going into the hands of the president?
Jamieson Greer (02:29:18):
Sir, Congress delegated this power to the President. He has to renew the emergency every year. He has to give reports to Congress. Congress told him what he has to do to use this authority and he's doing those things.
Mr. Sanders (02:29:27):
Okay. Thank you Mr. Chairman.
Chairman (02:29:30):
Thank you. You've been going now two hours and almost 40 minutes, but we have one more question. Senator Wyden has one more question and then we'll wrap up.
Mr. Wyden (02:29:39):
Thank you very much, Mr. Chairman. So Mr. Greer, we've been at this a long time and you've offered a lot of word salad about international trade reciprocity and metrics and the list goes on and on. But inside this verbiage, you've ducked a very big question, and that is how can you negotiate with scores of countries before Americans see their 401(k)s go up in smoke?
(02:30:13)
And so what I'd like to do is just ask you one simple question to wrap this up, because at home in Oregon, people want to know what we're doing to help the people who are hurting today, not months and months or elections and all kinds of dates far in the future. So here's my question to wrap up. When will those hurting now see real relief?
Jamieson Greer (02:30:46):
Senator, the country decisively voted for this president and his trade policy. He knows how to use tariffs appropriately to negotiate deals where necessary and to drive investment and manufacturing back to the US. And that's what we're doing. He was successful in his first term in using it. Real wages went up and that's what we're doing now. And we're working around the clock to make sure we can do that.
Mr. Wyden (02:31:05):
Mr. Greer, I gave you a chance to respond to the question and what you said wasn't accurate. Nobody disputes that the president won the election up here on the dais, but nobody was told in the election campaign that we would have all of these people hurting now because of a flawed trade policy. Once in a while, so maybe take a little time, but there wasn't any mention of people from one end of the country to another feeling they've been wiped out financially. Nobody heard about that. That was never discussed.
(02:31:45)
Hope you'll have an answer for me because that's what Americans want to know who are hurting now. They've listened to all of this trade lingo tossed around, and then they scratch their head and say, "Who's going to stand up for me now?" Well, I'll tell you, we're going to fight for those people. That's why I'm proposing a bipartisan resolution that would overturn what's going on with 180 countries.
(02:32:10)
We'll keep the record open for a few days, but what I'd like to know is what and what the timetable is for helping people who are hurting right now because I haven't heard anything on that point. Thank you, Mr. Chairman.
Chairman (02:32:25):
Thank you, Senator Wyden. And we are now at the conclusion of the questions. Ambassador Greer, thank you for the time you've given us. As I indicated, you've gone almost two hours and 45 minutes. And I think you have been very clear about what the President's intentions are and how you expect this to roll out. The questions for the record deadline is Tuesday, April 15th for members of the Senate. And with that, this hearing is adjourned.
Jamieson Greer (02:32:55):
Thank you.
