TRADE SECURITY ACT
(Senate - August 01, 2018)

Text available as:

Formatting necessary for an accurate reading of this text may be shown by tags (e.g., <DELETED> or <BOLD>) or may be missing from this TXT display. For complete and accurate display of this text, see the PDF.

[Congressional Record Volume 164, Number 130 (Wednesday, August 1, 2018)]
[Pages S5565-S5567]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TRADE SECURITY ACT

  Mr. PORTMAN. Mr. President, today I want to talk about an issue that 
has gotten a lot of attention recently, and that is our U.S. trade 
policy. It is an important topic that affects every one of us. It 
affects our economy, it affects jobs, and it certainly affects our 
foreign policy.
  I have followed it pretty closely over the years. I was a trade 
lawyer when I first started practicing law. I was U.S. Trade 
Representative, or USTR, under the George W. Bush administration, and 
now I am a member of the Senate Finance Committee, which has 
jurisdiction over these trade issues.
  Most importantly, of course, I am a Senator from Ohio, which is a 
State that has a big manufacturing sector, a big agriculture sector, 
and a State where a lot of jobs depend on having a good trade policy. 
In fact, in Ohio, about 25 percent of our State's factory workers are 
export workers. In other words, they make products that get exported. 
Today in Ohio, about one of every three acres that are planted gets 
exported--soybeans, corn, and wheat. These are good jobs too. Trade 
jobs, on average, pay about 16 percent more than other jobs and provide 
better benefits. So it is very important to our economy in Ohio to have 
these export jobs.
  In America, we are about 5 percent of the world's population. Yet we 
have about 25 percent of the world's economy. So it is very important 
for us to have access to the 95 percent of consumers who live outside 
of our borders. We want to sell them more. We want to open up markets 
for our farmers, our workers, and our service providers.
  While promoting exports, we also need to ensure that we protect 
American jobs from unfair trade, from imports that would unfairly 
undercut our farmers, our workers, and our service providers. Simply 
put, what we want is a level playing field where it is fair and where 
we have reciprocal treatment between countries.

  If we have a level playing field, by the way, I believe American 
workers will be just fine. Our workers and businesses can compete and 
can win if we have a truly level playing field.
  We want a balanced approach. We want to open up new markets for U.S. 
products, while being tougher on trade enforcement, so we can compete.
  With my colleagues over the past couple of years, I coauthored a 
number of laws in this area. One is actually called the Level the 
Playing Field Act. It does just that. The other is called the ENFORCE 
Act. These are bipartisan laws that are helping to crack down on unfair 
trade that hurts U.S. jobs.
  The Level the Playing Field Act helps on the front-end by making it 
easier for workers and businesses to win cases when foreign companies 
send us products that are unfairly traded because they are sold below 
their cost or dumped or because they are subsidized illegally. This 
makes it easier to put anti-dumping or countervailing duties, also 
known as tariffs, on those unfairly traded products. That is a good 
idea. By the way, it is sanctioned by the international trade enforcer 
called the World Trade Organization. This law has worked over the last 
couple of years to raise tariffs on those unfair imports.
  The second law, which is called the ENFORCE Act, helps on the back-
end by ensuring that once workers win trade enforcement cases, the new 
duties on foreign imports are actually enforced. It is designed to keep 
countries from circumventing new tariffs by selling the product to a 
third country, a third party that then sells it to the United States to 
get around our tariffs. We don't want people to evade our tariffs, and 
that is the purpose of the ENFORCE Act. It needs a little work, 
honestly, on its implementation. We need to strengthen it.
  Together, the Level the Playing Field Act and the ENFORCE Act are 
working.
  Since I came to the Senate in 2011, I have been involved in nearly 40 
trade cases where American workers and producers were seeking relief 
from unfair foreign competition. I am proud to have received the 
American Iron and Steel Institute's Congressional Steel Champion Award 
in 2015 for my ongoing work to allow steelworkers to compete on a level 
playing field.
  In 2016, the Level the Playing Field Act was used to secure three big 
wins against China and several more against other countries in the 
sector of steel, particularly rolled steel--hot-rolled steel, cold-
rolled steel, and corrosion-resistant steel. This is the kind of steel 
that is used to make cars and trucks and other things. Those products 
from China--rolled steel--now face tariffs of up to 265 percent thanks 
to our legislation and thanks to bringing these cases and winning them.
  This is how trade enforcement should work. It shouldn't just be about 
saying that we are going to raise tariffs just because we can because 
then other countries will do the same thing to us--raising tariffs, 
which are like taxes, and risking a trade war with escalating tariffs 
that would make everyone worse off. Enforcement actions should be 
focused on those countries that are engaging in unfair trade practices 
and violating our trade laws or the commitments that are required under 
the World Trade Organization.
  We want a level playing field and reciprocity so we can open up more 
markets for our workers, and we want other countries to send us 
products that are fairly traded. It is pretty simple.
  We need to be careful about taking action that increases barriers to 
trade. If we impose higher tariffs without justification, we invite 
retaliation and higher tariffs on our exports. My concern is that we 
are beginning to do just that, and it threatens the impressive economic 
gains we have seen this year.
  Since the tax cuts and tax reform were enacted and since important 
new

[[Page S5566]]

regulatory relief has been implemented by the Trump administration, we 
have seen the economy grow. After a couple of decades of stagnant 
growth and flat wages, our economy is actually increasing, wages are 
starting to increase, and American workers and businesses are 
benefiting.
  Just last week, the Commerce Department released the economic numbers 
for the past 3 months, and our economy grew by 4.1 percent in the 
second quarter of this year. Pro-growth Federal policies have resulted 
in this kind of a strong and growing economy that is creating more jobs 
and higher wages. We want to continue building on that momentum that we 
already started this year with these good fiscal policies.
  I am concerned that some of our decisions on trade policy provide a 
real headwind to that growing economy. That is why, when I see the 
Commerce Department putting tariffs on automobiles and auto parts, I 
become concerned. According to one estimate, a 25-percent tariff on 
autos and auto parts could cost 624,000 American jobs.
  Right now, the administration is doing a lot on the trade front. They 
have a lot of balls in the air. As far as our trade policy is 
concerned, I think it is causing a lot of uncertainty out there in the 
economy.
  First, the administration is still renegotiating the North American 
Free Trade Agreement, or NAFTA, with Mexico and Canada, which are, by 
the way, our biggest trading partners in Ohio--Canada is No. 1, and 
Mexico is No. 2.
  I support updating NAFTA. I think that is a good idea. I support what 
USTR Robert Lighthizer is trying to do. But after 15 months of talks 
and uncertainty, I am concerned. We need to see some light at the end 
of the tunnel. I hope we will soon, particularly as it relates to 
Mexico.
  Second, the United States is raising tariffs on Chinese imports using 
section 301 of our trade law after conducting a thorough investigation 
demonstrating the number of anti-competitive ways--from administrative 
approval processes, to joint venture requirements, to outright cyber 
theft--that China uses to effectively steal American intellectual 
property.
  Third, the administration is using a national security waiver to our 
trade rules--called section 232--to raise tariffs as a matter of 
national security on steel and aluminum imports from all but four 
countries. That means those tariffs are being imposed on a number of 
our strong allies. Because of that and the retaliation it has invited, 
this section 232 has been the focus of a lot of attention recently.
  I agree with President Trump that we need to crack down on countries 
that cheat on trade--like China--and we need to make sure we do it in a 
smart and targeted way. China does steal our intellectual property, and 
they have been doing that for years. China tilts the playing field 
against American firms, innovators, and workers and gets the technology 
they need to leapfrog the competition. I support action against this 
kind of unfair Chinese trade and investment practice, and I was glad to 
hear that serious talks with China might start soon.

  As we go into these talks, we need to be clear about our objectives 
and clear about what we are looking for as Americans. Is it just trying 
to address the trade deficit and have them try to buy more of our 
exports, like soybeans or LNG--liquefied natural gas--or is it asking 
China to make some changes structurally so that we can have a more fair 
trading relationship as two mature trading partners? We also need to be 
sure, as we make clear our objectives, that we don't continue to raise 
tariffs without having these negotiations and direct talks.
  My biggest concern is the administration's broad use of a powerful 
national security tool known as section 232. Section 232 comes from a 
trade act that was passed back in 1962 that was intended to be used 
purely for national security purposes. Thus, it has been invoked only 
rarely, only a few times, the last being in 1986, 32 years ago. Section 
232 is really an exception to our trade laws because you neither have 
to show injury to a domestic industry nor any surge or unfair trade 
with regard to the targeted imports, as you would under these other 
trade laws. In other words, under the other laws, you have to show that 
there is material injury to a domestic company or that there is a surge 
coming in of imports or often that there actually is unfair trade, like 
the dumping we talked about earlier--selling below cost or subsidizing 
illegally. You don't have to show that under section 232.
  One reason it has hardly ever been used is precisely because it 
doesn't require any negative impact or unfair influence or unfair 
trade. This means that when we use this tool, if it is not used for 
national security reasons, other countries are likely to respond in 
kind, simply putting tariffs on our exports for no reason. That is 
exactly what is happening.
  Using section 232, we put a 25-percent tariff on steel and 10 percent 
on aluminum imports from nearly every country in the world across the 
board, most of which are our allies. The only exemptions are Argentina, 
Brazil, Australia, and South Korea. We negotiated quotas with them. For 
all the other countries in the world, we have these tariffs in place, 
including our close ally Canada, for example. They are a stalwart ally. 
They have had troops in Iraq with us. They had troops in Afghanistan 
with us. They are a good neighbor. They are Ohio's biggest trading 
partner and No. 1 export destination for the workers and farmers I 
represent. As a country, we actually send more steel to them than they 
send to us. Remember, this is about steel and aluminum national 
security tariffs. We actually export more steel to them than they send 
to us, but they are targeted by this section 232 as a national security 
threat for steel.
  They have responded, as you would expect, with tariffs of their own 
on our exports--all kinds of exports across the board. According to one 
publication, Business Insider, Ohio is their No. 1 targeted State. That 
is the State I represent. They slapped tariffs on Ohio workers and 
farmers of more than $1.7 billion.
  Now let's back up for a second and talk about steel and aluminum. Is 
there an issue with unfair imports? Yes, there is, I think, 
particularly with regard to steel. We have a global glut of steel, and 
China is the reason.
  About 15 years ago, China had about 15 percent of the global 
production of steel. Today, they have about 50 percent of the global 
production of steel, and they don't need it, so they are subsidizing 
it, and they are sending it out below its cost, which, again, is called 
dumping. That is why we have been using our other trade laws to go 
after these unfair exports, and we need to do more of that to stop the 
transshipments, where they send the product to another country and then 
process it and then send it to us.
  For certain countries and certain products, I believe there is a 
national security issue with steel. An example of that is electrical 
steel--something that is critical to our electric grid. Electrical 
steel is something we absolutely need. Yet there is only one U.S. 
manufacturer left of electrical steel. Imports have increased in the 
last year alone by about 100 percent. This is an example of how I 
believe section 232 could be used in a very targeted way that relates 
directly to our national security.
  Again, we have other trade enforcement tools at our disposal, 
including the Level the Playing Field Act we talked about and the 
ENFORCE Act. We went after countries that subsidize or dump their 
products. These are more precise tools to hold our trading partners 
accountable that should be strengthened and used before section 232, 
where appropriate.
  Misusing the 232 statute and its national security rationale not only 
leads to other countries increasing tariffs on all our exports to them, 
but it also risks the World Trade Organization stepping in and our 
actually losing what I think is an important national security tool. In 
other words, by misusing this, my fear is that we will be taken to the 
WTO by other countries. It has already happened. They have filed cases 
again us. The WTO could indeed rule--which they never have before--that 
we cannot use 232 in the way we have and take away that tool. That 
would be a big problem because I think it is a tool we should have in 
our toolbox.
  I believe we run an even greater risk of losing this tool when the 
administration suggests that imports of cars

[[Page S5567]]

threaten our national security. That is the most recent case that is 
now working through the system. I want to see more cars made in 
America, but tariffs like the Commerce Department is suggesting would 
make it even more expensive to make a car here. We are told by the auto 
industry--and the big 3 automakers oppose this 232 on automobiles--we 
are told it would increase the cost of a car by about $2,000.
  That is why I believe we have to reform the section 232 statute and 
ensure that any 232 actions are based on a legitimate national security 
justification and that Congress has a larger role to play in its 
oversight. A few hours ago, my colleagues, Senators Doug Jones and Joni 
Ernst, and I introduced bipartisan legislation that would help do just 
that. Our bipartisan bill, called the Trade Security Act, will reform 
section 232 to better align the statute with its original intent.
  First, it ensures that proper experts in government determine at the 
outset whether there is a national security threat. Our bill requires 
the Department of Defense, not the Secretary of Commerce, to assess the 
potential threat posed by imports of certain products to justify the 
national security basis for new tariffs under section 232. If the 
Department of Defense says a threat is found, the Department of Defense 
would send its report to the President. The President would then direct 
the Secretary of Commerce, in consultation with Congress, the Secretary 
of Defense, and USTR, to develop recommendations for how to respond to 
the threat. After receiving the remedy recommendations from the 
Secretary of Commerce, the President would then decide whether to take 
action.
  So it creates a two-step process. The first step is determining 
whether there is a national security threat, done by the appropriate 
office and the appropriate experts in the Federal Government, and then 
the second step would be the Commerce Department coming up with the 
remedy, as opposed to now, where the Commerce Department makes that 
national security recommendation.
  The bill will also expand the role of Congress by giving Congress the 
opportunity to disapprove of 232 action by passing a joint resolution. 
Currently, Congress can disapprove of section 232 actions through a 
joint resolution but only when it results in something covering oil or 
petroleum products. So it is interesting--under the current 232 
statute, the disapproval process works but only as to oil or other 
petroleum products.
  Our bill, the Trade Security Act, which we introduced today, would 
expand that process to include all products. By the way, the oil and 
petroleum production exception is a vestige from the last time section 
232 was used, about 40 years ago, because it was used with regard to 
oil from Libya and from Iran.
  Misusing our trade tools not only hurts our exporters, workers, and 
farmers, but also our consumers. I urge my colleagues to join me in 
supporting this legislation to increase congressional oversight on one 
of our most important national security tools. When he signed the Trade 
Expansion Act of 1962 into law, which included section 232, President 
Kennedy said:

       This act recognizes, fully and completely, that we cannot 
     protect our economy by stagnating behind tariff walls, but 
     that the best protection possible is a mutual lowering of 
     tariff barriers among friendly nations so that all may 
     benefit from a free flow of goods. Increased economic 
     activity resulting from increased trade will provide more job 
     opportunities for our workers.

  So that was the context within which section 232 was passed--in other 
words, saying we don't want to put up more barriers. We want trade to 
be fair and reciprocal. Neither the President nor the Congress intended 
that section 232 would be used to put up more barriers. The Senate 
Finance Committee chairman in the Congress who passed this legislation 
said that in order for section 232 to apply, ``the products must be 
involved in our national security.''
  Whether it is the President or whether it is the Congress, the intent 
was clearly to tie this closely to national security.
  Let's restore this powerful and important tool to Congress' original 
intentions when it crafted the law and ensure that section 232 is used 
appropriately for national security purposes.
  This legislation will help to guide our trade policy and ensure that 
we keep national security and trade issues separate. The strength of 
America's economy comes from hard-working and innovative Americans in 
our shops, plants, and farms across this country that send products 
around the globe. We want more of that. They deserve a level playing 
field and the chance to compete.
  Let's be sure our trade policy gives them that and not escalating 
tariffs for their exports and higher costs for their families. Let's 
find that right balance, including restoring an important national 
security tool by not misusing it.
  I urge my colleagues to join us in support of the Trade Security Act 
to help do just that.
  I yield back my time.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GARDNER. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________