Section 301 Hearing Transcript on Proposed Tariffs
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1 UNITED STATES TRADE REPRESENTATIVE + + + + + 301 COMMITTEE + + + + + SECTION 301 TARIFFS PUBLIC HEARING + + + + + THURSDAY AUGUST 23, 2018 + + + + + The 301 Committee met in the Hearing Room of the International Trade Commission, 500 E Street, SW, Washington, D.C., at 9:30 a.m., William Busis, Philip Butler, Megan Grimball, and Arthur Tsao, Co-Chairs, presiding. PRESENT WILLIAM BUSIS, Chair, U.S. Trade Representative PHILIP BUTLER, Chair, U.S. Trade Representative MEGAN GRIMBALL, Chair, U.S. Trade Representative ARTHUR TSAO, Chair, U.S. Trade Representative EVAN CONCEICAO, Department of Homeland Security BON FLEMING, Department of State JULIA HOWE, U.S. Trade Representative BILL JACKSON, U.S. Trade Representative SHELBI KNISLEY, U.S. Department of Agriculture LAURIE MEASE, Department of Commerce BRYAN O'BYRNE, Small Business Administration MAUREEN PETTIS, Department of Labor KATE PSILLOS, Department of Commerce ANDREW STEPHENS, U.S. Department of Agriculture KATHY YAO, U.S. Department of Agriculture STAFF PRESENT BILL BISHOP, International Trade Commission SHARON BELLAMY, International Trade Commission Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 2 WITNESSES PRESENT KELVIN ADEE, American Honey Producers Association WILLIAM BLANK, Air-Way Global Manufacturing MIKE BOBER, Pet Industry Joint Advisory Council BRIAN BURKHART, Milliken & Company SCOTT BURNETT, Zurn Industries, LLC BOB BURNS, Trek Bicycle Corporation JOE CALABRESE, Evenflo Company, Inc. KENNETH CHRISTOPHER, Christopher Ranch, LLC ANTHONY CIEPIEL, Step2 Discovery, LLC ROB COHEN, Display Supply & Lighting, Inc. GREGORY DOLAN, Methanol Institute GORDON DUFF, RYCO Hydraulics, Inc. LINDA DUNCAN, Duncan Textile TOM EISENMAN, AES Drilling Fluids, LLC KEVIN FEIG, Foreign Parts Distributor, Inc. REED FEIST, Ellison Educational Equipment, Inc. JONATHAN GOLD, National Retail Federation JOSEPH GRUCHACZ, Longkou Keda Chemical USA BILL HANVEY, Auto Care Association DEBORAH HARDESTY, Niche Chem Industries, Inc. DAVID HENRICK, Newpark Drilling Fluids, LLC ROBERT HUBBARD, Team Three Group Limited, LLC ELIZABETH HUFF, Anatomical Worldwide JULIA HUGHES, U.S. Fashion Industry Association ARNOLD KAMLER, Kent International, Inc. And Reshoring Bicycle Production Team THOMAS KRAFT, Norpac Fisheries Export FRANCINE LAMORIELLO, Personal Care Products Council LILY LEE, Alpha Source, Inc. KELLY MARIOTTI, Juvenile Products Manufacturers Association MARK MAROON, Maroon Group, LLC STEVEN MARTON, BreathableBaby, LLC PHILIP McCARTER, Nation Ford Chemical VICTOR SHANON MICHAEL, Otsuka Chemical America SHERRILL MOSEE, MinkeeBlue, LLC BARBARA NEGRON, North American Natural Casing Association MICHAEL OCHS, RV Industry Association Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 3 JIM PIGOTT, Medline Industries JOHN PITTMAN, SNF Holding Company WYLIE ROYCE, Royce Associates PATRICK SEIDLER, Wilderness Trail Bikes, Inc. JOE SHAMIE, Delta Enterprise Corporation BILL SMITH, Huffy Corporation JILL SOLTAU, Jo-Ann Stores, LLC KELLY STACKPOLE, Plumbing Manufacturers International RICHARD STEIN, Illinois Auto Truck Co., Inc. JAMES STEINDECKER, Dragon Trading, Inc. MATTHEW STERSHIC, PMC Organometallix, Inc. JONATHAN STOEL, Chatsworth Tire, Inc. and DMC Consulting, Inc. RITCHIE STRAFF, Daikin America TIM TARPLEY, Petroleum Equipment and Services Association CHOON TEO, Zhejiang Medicine Co., Ltd. RUSS TORRES, Graco Children's Products, Inc. DENNIS TRICE, Mitsubishi Chemical America AMANDA WALKER, Trans-Texas Tire, LLC JOSH WERTHAISER, Downlite NANCY WILKINS, Grocery Manufacturers Association ANN WILSON, Motor & Equipment Manufacturers Association JAMES WISNOSKI, Arrowhead Engineered Products WANG YU, China Chamber of Commerce for Import and Export of Textiles MARK ZELNIKER, Econoco Corporation Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 4 T-A-B-L-E O-F C-O-N-T-E-N-T-S OPENING STATEMENT FROM CHAIR . 7 PANEL 25 . .21 1. Mark Bradley, K2 Urethanes, LLC 2. Joseph Gruchacz, Longkou Keda Chemical USA 3. Francine Lamoriello, Personal Care Products Council 4. Kelly Mariotti, Juvenile Products Manufacturers Association 5. Mark Maroon, Maroon Group, LLC 6. Barbara Negron, North American Natural Casing Association 7. Dr. Matthew Stershic, PMC Organometallix, Inc. 8. Dennis Trice, Mitsubishi Chemical America PANEL 26 . .70 1. Kevin Feig, Foreign Parts Distributor, Inc. 2. Bill Hanvey, Auto Care Association 3. Dennis Mangola, Chatsworth Tire, Inc. and DMC Consulting, Inc. 4. Amanda Walker, Trans Texas Tire, LLC 5. Michael Ochs, RV Industry Association 6. Richard Stein, Illinois Auto Truck Co. Inc. 7. Ann Wilson, Motor & Equipment Manufacturers Association 8. James Wisnoski, Arrowhead Engineered Products PANEL 27 . 145 1. William Blank, Air-Way Global Manufacturing 2. Rob Cohen, Display Supply & Lighting, Inc. 3. Gordon Duff, RYCO Hydraulics, Inc. 4. Tom Eisenman, AES Drilling Fluids Holdings, LLC 5. David Henrick, Newpark Drilling Fluids, LLC 6. Kerry Stackpole, Plumbing Manufacturers International 7. Tim Tarpley, Petroleum Equipment and Services Association 8. Scott Burnett, Zurn Industries, LLC Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 5 PANEL 28 . 201 1. Joe Calabrese, Evenflo Company, Inc. 2. Anthony Ciepiel, Step2 Discovery, LLC 3. Reed Feist, Ellison Educational Equipment, Inc. 4. Steven Marton, Breathable Baby, LLC 5. Joe Shamie, Delta Enterprise Corporation 6. James Steindecker, Dragon Trading, Inc. 7. Mike Tucker, Office Furniture Dealers Alliance 8. Russ Torres, Graco Children's Products, Inc. PANEL 29 . 248 1. Peter Duncan, Duncan Textile 2. Jonathan Gold, National Retail Federation 3. Louis Hornick III, LHSC, Inc. 4. Julia Hughes, U.S. Fashion Industry Association 5. Sherrill Mosee, MinkeeBlue, LLC 6. Jill Soltau, Jo-Ann Stores, LLC 7. Josh Werthaiser, Downlite 8. Wang Yu, China Chamber of Commerce for Import and Export of Textiles PANEL 30 . 296 1. Bob Burns, Trek Bicycle Corporation 2. Elizabeth Huff, Anatomical Worldwide 3. Arnold Kamler, Kent International, Inc. and Reshoring Bicycle Production Team 4. Lily Lee, Alpha Source, Inc. 5. Jim Pigott, Medline Industries 6. Patrick Seidler, Wilderness Trail Bikes, Inc. 7. Bill Smith, Huffy Corporation 8. Choon Teo, Zhejiang Medicine Co. Ltd. Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 6 PANEL 31 . 356 1. Brian Burkhart, Milliken & Company 2. Gregory Dolan, Methanol Institute 3. Deborah Hardesty, Niche Chem Industries, Inc. 4. Phillip McCarter, Nation Ford Chemical 5. John Pittman, SNF Holding Company 6. Wylie Royce, Royce Associates 7. Ritchie Straff, Daikin America 8. Mark Zelniker, Econoco Corporation PANEL 32 . 412 1. Kelvin Adee, American Honey Producers Association 2. Mike Bober, Pet Industry Joint Advisory Council 3. Kenneth Christopher, Christopher Ranch, LLC 4. Victor Shanon Michael, Otsuka Chemical America 5. Robert Hubbard, Team Three Group Limited, LLC 6. Thomas Kraft, Norpac Fisheries Export 7. Nancy Wilkins, Grocery Manufacturers Association Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 7 1 P-R-O-C-E-E-D-I-N-G-S 2 9:29 a.m. 3 CHAIR BUSIS: Good morning and welcome. 4 The Office of the United States Trade 5 Representative in conjunction with the 6 Interagency Section 301 Committee is holding this 7 public hearing in connection with the Section 301 8 investigation of China's acts, policies, and 9 practices related to technology transfer, 10 intellectual property, and innovation. 11 The United States Trade Representative 12 initiated the investigation on August 18, 2017. 13 Since that time the Trade Representative has 14 determined to take two actions in the 15 investigation: On June 20, 2018 USTR published a 16 Federal Register notice imposing an additional 17 duty of 25 percent on products from China with an 18 annual trade value of approximately $34 billion 19 effective July 6, 2018. 20 On July 16, USTR published a Federal 21 Register notice imposing an additional duty of 25 22 percent on products from China with an annual Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 8 1 trade value of approximately $16 billion 2 effective today, August 23. 3 Unfortunately China has not responded to 4 these actions by addressing the unfair and 5 harmful acts, policies and practices found in the 6 investigation. Instead China has chosen to 7 attempt to cause further harm to the U.S. 8 economy. 9 Accordingly, on July 17 USTR published 10 a Federal Register notice seeking public comment 11 on a proposed supplemental action to be taken in 12 the investigation. The proposed supplemental 13 action in an additional duty on a list of tariff 14 subheadings covering products from China with an 15 annual trade value of approximately $200 billion. 16 The proposed rate of duty for the supplemental 17 action initially was 10 percent. On August 7, 18 USTR published a Federal Register notice 19 announcing that the Trade Representative was 20 considering a 25 percent rate of additional duty 21 for the supplemental action. 22 The purpose of this hearing is to Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 9 1 receive public comments and testimony regarding 2 the proposed supplemental action described in the 3 July 17 and August 7 notices. Written 4 submissions including post-hearing comments 5 should be submitted by no later than September 6, 6 2018. The Section 301 Committee will carefully 7 consider the testimony and the written comments.