Trade Policy

Floor Speech

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Mr. LaHOOD. Mr. Speaker, I want to thank my colleague, French Hill, for organizing tonight's Special Order on trade. I want to associate my thoughts tonight with the comments made by Congressman Davidson and also with Congressman French Hill.

Mr. Speaker, I would just start off and say that it is imperative that we, as Members of Congress, come together to stress to the President and his administration the importance of free trade.

When I look back over the last year and a half of his administration, I applaud the President and his leadership in working with us to roll back regulation, have reasonable regulation in place, and also once-in- a-lifetime tax reform that he was able to get passed, along with this Congress, two accomplishments that have jump-started our stagnant economy, and we are seeing the results.

However, I think we do ourselves a real disservice to the work that we have already done on this economy by engaging in a trade war. I think we go backwards in terms of the economic progress that we are making to get in a long-term trade war.

Mr. Davidson referenced it a little, but it is frustrating and disappointing to see several staff members with the President who are unelected and unconfirmed who are trade protectionists. They have the ear of the President when it comes to implementing trade policy, and that is, again, frustrating. These protectionists are failing to take the time and recognize the long-term costs of the recent tariff actions and our current position as it comes to renegotiating NAFTA and other trade agreements on our economy.

I have said this many times before when I think back to the election. Our President wasn't elected by people on the East Coast or the West Coast. It was people in the Midwest, people from rural America, people from the South who helped elect him. And, unfortunately, these are the folks who are left the worst off by these trade policies that are being put in place currently by the administration.

As we move forward in this Congress, we need to carefully examine how much authority the legislative branch has ceded over time to the executive branch. I credit my colleague, Warren Davidson, for introducing a piece of legislation that I am a cosponsor of that would help take back a little of that authority under our Constitution, to have more input from Congress on that. We need to talk more about that, managing our trade policies to determine how best to restore our constitutional authority. Our other colleague, Congressman Gallagher of Wisconsin, has also introduced a piece of legislation that also does the same thing.

We have no choice or alternative with the current world that we live in. We live in a globalized world with supply chains set and marketplaces and customers continuing to grow, but we need to be engaged. Given that 95 percent of the world's customers live outside of the United States, we tend to forget that we represent about 4.5 percent of the world's population.

There is no doubt that we produce the best goods; we produce the best products; we have the best workers. But you have got to have markets. You have got to have customers around the world for those products to go to support free and fair trade.

I think about Illinois. Illinois is the sixth largest State in the country. Ag is the number one industry in the State of Illinois. It is the number one in my district. When I think about Illinois, for example, global trade supports over 1,700,000 jobs in Illinois. Ensuring that our manufacturers and farmers have access to markets around the world to sell their goods is vital to their ability to remain competitive and our economic success.

The district that I represent, Illinois' 18th Congressional District, spans central and west central Illinois. We are proud to be home to some of the world's most respected manufacturers, including companies like John Deere, Caterpillar, and CNH.

We are also home to some of the world's most fertile farmland. We have the eighth largest district in the country in terms of corn and soybean production in the country. About 40 percent of the corn and soybeans grown in my district go somewhere else around the world. They get put on barges on the Illinois and Mississippi River, go down that river through New Orleans, through the Gulf, through the new Panama Canal, and go anywhere around the world.

But when you put up tariffs and barriers, you restrict those farmers from getting their goods all across the world. Unfortunately, these days, manufacturing and agriculture communities like mine across the country face uncertainty and dark days ahead. That is because of our current trade policy.

While I applaud the President's intent to go after bad actors in the global marketplace, his approach and the resulting retaliation has put our American workers and products in jeopardy, with no end in sight. The administration's reckless and frequent use of tariffs, some premised on national security, which I think is a fallacy, threaten to spark an all-out trade war in this country and around the world.

We have already seen retaliation on American-made products from some of our closest allies like Canada, Mexico, and the EU. In addition, China, which consumes a third of the world's soybeans, has also followed suit.

In Illinois, total State exports threatened by new tariffs have reached over $3.8 million. Instead of tariffs, which are simply taxes passed on to consumers, our approach to address unfair trading practices should be targeted to minimize collateral damage and should include specific and clear end goals, which we have not seen.

Bottom line, we must pursue targeted trade enforcement policies that minimize harm to American farmers, our rural communities, and our manufacturers.

We know that our agriculture industry is typically first and hardest hit by any trade retaliation. To make things worse, our farmers are already at a disadvantage compared to other foreign competitors given the lack of free trade agreements that the U.S. has compared to other countries, especially in the Asian markets. It was referenced earlier that TPP which, of course, is the Trans-Pacific Partnership, is going on without us.

I look back at this administration. There was a lot of talk when they came in about bilateral trade agreements. We are 19 months into this administration, and we don't have one--not one--bilateral trade agreement. There was a lot of talk about putting those in place.

Part of the reason we have not had that is they have run from us because of our position and what we have asked for in those bilateral trade agreements.

The loss of marketplace due to tariffs will be extremely hard to regain and may not be possible to regain at all.

The administration's go at it alone approach is clearly not as effective as with working with our allies to negotiate a solution to global oversupply and technology theft perpetrated by countries like China, and there is no doubt they have done that. The forced technology transfers and the stealing of our technology should be addressed. But there are better ways to do that in a strategic and a precise way, partnering with our allies to do that, but we can't do that going at it alone, and we can't do it premised on national security.

Lastly, let me just say that we have heard a lot about surpluses. We have heard a lot about trade deficits. It seems like the administration is fixated on trade deficits.

I will tell you, in agriculture we have a trade surplus with every country in the world. Think about the collateral damage that is going to be done to those farmers and those ag products by engaging in a trade war. We do need to address the trade deficit, but it is a complicated, nuanced issue that we ought to address.

There are lots of things we can do to change that instead of the path we are heading down right now.

At the end of the day, our farmers want trade, not aid. In a free market system, it shouldn't be based on subsidies or aid. So we need to, again, continue to work with this administration on our proper oversight, taking back some of our constitutional authority to make sure that we are getting the message across that we need to have free and open trade that is going to benefit our farmers, our manufacturers, and working people all across this country.

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Mr. LaHOOD. Mr. Speaker, I thank Mr. Hill.

The gentleman laid out four different objectives which I think are very pertinent. The gentleman mentioned state-owned enterprises. I think about that in China, and I think about how in many ways they have cheated the system and done things, but this is a problem that has been going on for a long time.

One of the requirements with any trade agreement is you have to have enforcement. I don't think we have had proper enforcement like we need when it comes to a number of these initiatives we have had over a series of 20, 25 years. But enforcement is important.

That means law enforcement. It means getting the Department of Justice involved holding bad actors accountable. But I think you have more ability to do that and more leverage if you partner with the E.U., you partner with Japan, you partner with our other allies to do that. We simply haven't done that.

I think, again, going at it alone is not the right approach to take.

Are there things we ought to be working on to change?

Of course. There are rules we should change. We should engage on a number of these issues. We should hold a number of the bad actors accountable. But disengaging, putting up tariffs, and putting up barriers are the frustrating parts to me because I have not seen what is the ultimate goal with this strategy.

What is the endgame?

How do we land this plane eventually?

That is what is frustrating to me. What I try to explain to my farmers and my manufacturers in the district is: How does this all end?

I have worked with the White House on a number of issues and been a strong ally with them, but there is clearly a division in the White House. You have the protectionist wing and you have the free-trader wing.

There are many good people who have talked about the importance of free trade--Secretary Perdue, Ambassador Branstad to China, Secretary Mnuchin, Larry Kudlow--people who support the free enterprise system, support trade. Gary Cohn was in that group.

On the other side, you have the more protectionist wing. Again, from them, we have not seen how this all ends, giving us some confidence this is going to work out. That is the frustrating part, again, for our constituency and my farmers and manufacturers moving forward.

We have talked a lot about China and what they have engaged in and what they have done, whether, again, it is forced technology transfers. In a lot of ways, what they do with American companies that come over there or foreign companies is a form of extortion: Give us your technology, make us a part of it, and then we will let you come into the country.

Well, we ought to be stronger in going after them. There are mechanisms and ways, and there are success stories in doing that. But we pulled out of TPP, and that is something the President ran on.

But what has happened since we pulled out of TPP? All those other countries have gravitated towards China, Southeast Asia. They have gravitated towards them without us. So we are left out, being on our own. I don't think that is good, long term, when we need marketplaces and we need customers to engage with.

Being isolated is not the right approach to take on this. We need to, again, engage the White House and particularly try to understand the path we are on and the end game here moving forward.

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Mr. LaHOOD. Mr. Speaker, on the national security issue and premising much of this on national security, I didn't serve in the military, but national security is not something that should be used lightly. So when I saw that being used by this administration, I went to the experts and talked to people in our military. I think we saw early on that General Mattis was interviewed. He didn't think very highly that this was a national security risk.

Talk to any of our top brass in the military and I don't think you will find anybody that supports this. I don't think you have seen anybody in the administration from the military that has come out to support this as a national security threat, because it is not, in my view. I think it is a faulty premise to go forth on this. I think, eventually, when it gets to the WTO, I don't think it is going to stand up.

I think that, again, gets back to our credibility in going about this. We have got to be very careful when we put our prestige of the United States out there and rely on national security when you can't even find our own defense apparatus and our security folks out there who think this is a proper basis to do this.

So that concerns me, moving forward, and I think, again, puts us in a tough position, again, being more isolated and not having other like- minded allies to help us.

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