Section 301 Hearing Transcript on Proposed Tariffs

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Section 301 Hearing Transcript on Proposed Tariffs 1 UNITED STATES TRADE REPRESENTATIVE + + + + + 301 COMMITTEE + + + + + SECTION 301 TARIFFS PUBLIC HEARING + + + + + TUESDAY JUNE 25, 2019 + + + + + The 301 Committee met in Hearing Room B of the U.S. International Trade Commission, 500 E Street SW, Washington, D.C., at 9:30 a.m., Arthur Tsao, Chair, presiding. PRESENT ARTHUR TSAO, Chair, U.S. Trade Representative JULIE ADAMS, Department of State SALIM BHABHRAWALA, Department of Commerce CHRISTOPHER BLAHA, Department of Commerce SARAH BONNER, Small Business Administration ERIN COVERT, Department of Agriculture BON FLEMING, Department of State MATTHEW FRATERMAN, Department of Labor JEAN JANICKE, Department of Commerce BILL JACKSON, U.S. Trade Representative LINDA MARTINICH, Department of Commerce NICOLE PODESTA, Department of Agriculture CHARLIE RAST, Department of Commerce BONNIE RESNICK, Department of the Treasury TRACY ROY, Customs and Border Protection MATTHEW SULLIVAN, Department of the Treasury ROBERT TUEBNER, Department of Agriculture Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 2 CRISTINA VON SPIEGELFELD, Small Business Administration TIM WINELAND, U.S. Trade Representative SHELLY ZHAO, U.S. Trade Representative ALSO PRESENT TYRELL BURCH, International Trade Commission WITNESSES PRESENT DAVID ALPERN, Ralsey Group Limited SCOTT DARSOW, Life Fitness MICHAEL ESCH, Church and Dwight Co. Inc. RYAN EZELL, Halliburton Company STEVEN FLUDDER, NEC Energy Solutions DAVID FRANCO, Franco Manufacturing Co. MICHELLE GANON, Port of New Orleans BLAKE HANSON, Industrial Oil Products DAVID HENRICK, Newpark Drilling Fluids LLC NATE HERMAN, Travel Goods Association JERRY HUANG, VIZIO Inc. ALLEN IBARA, Soulbrain MI Inc. REILLY KIMMERLING, Carrier JOSEE LAROCQUE, Burton Corporation JOHN LEGGATT, Life Jacket Association JENNIFER LIU, Sony Interactive Entertainment ROHAN MEHRA, Skydio KEVIN MICHAEL, Water Sports Industry Association WADE MIQUELON, Jo-Ann Stores ANDY MISSAN, Fitbit Inc. JOHN NEWCASTER, AES Drilling Fluids LLC BRYAN O'ROURKE, Core Health & Fitness AARON PADILLA, American Petroleum Institute JEFF PINKOW, Centric Brands BRETT PORTARO, Powercharge BURT PRINS, Water Pik Inc. LANA RASCIONATO, Ideavillage Product Corporation PAUL ROTSTEIN, Gold Medal International WYLIE ROYCE, Royce Associates, ALP Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 3 BILL SELLS, Sports and Fitness Industry Association MIKE SHAFFER, PVH Corp. CHRISTOPHER STEINKAMP, Snowsports Industries America RUSTY THARP, Goodman Manufacturing Company GARY WAKLEY, FILA U.S.A. JEFF WILLIAMS, Tennis Industry Association WANG YU, China Chamber of Commerce for Import and Export of Textiles Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 4 CONTENTS PANEL 49 Blake Hanson, Industrial Oil Products. .10 David Henrick, Newpark Drilling Fluids LLC . .17 John Newcaster, AES Drilling Fluids LLC. .23 Aaron Padilla, API . .28 Ryan Ezell, Halliburton Company. .33 PANEL 50 Gary Wakley, FILA U.S.A. .60 Nate Herman, Travel Goods Association. .65 Wylie Royce, Royce Associates, ALP . .71 Andy Missan, Fitbit Inc. .76 Lana Rascionato, Ideavillage Product Corp. .82 PANEL 51 Wang Yu, China Chamber of Commerce for Import and Export of Textiles . 108 Wade Miquelon, Jo-Ann Stores . 112 Josee Larocque, Burton Corporation . 119 Mike Shaffer, PVH Corp.. 125 David Franco, Franco Manufacturing Co. 131 PANEL 52 Jeff Williams, Tennis Industry Assoc.. 154 Bryan O'Rourke, Core Health & Fitness. 158 Bill Sells, Sports and Fitness Industry Association. 164 Scott Darsow, Life Fitness . 172 Kevin Michael, Water Sports Industry Assoc.. 178 Jason Leggatt, Life Jacket Association. .. 184 Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 5 PANEL 53 Jennifer Liu, Sony Interactive Entertainment. 206 Jerry Huang, VIZIO Inc.. 213 Michael Ganon, Port of New Orleans . 219 Paul Rotstein, Gold Medal International. 222 Jeff Pinkow, Centric Brands. 228 PANEL 54 Rusty Tharp, Goodman Manufacturing Co. 250 Reilly Kimmerling, Carrier . 256 Michael Esch, Church and Dwight Co. Inc. 261 Bart Prins, Water Pik Inc. 267 Steven Fludder, NEC Energy Solutions . 272 Allen Ibara, Soulbrain MI Inc. 278 PANEL 55 Christopher Steinkamp, Snow Sports Industries America. 306 Rohan Mehra, Skydio. 313 David Alpern, Ralsey Group, Ltd. 318 Brett Portaro, PowerCharge . 325 Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 6 1 P-R-O-C-E-E-D-I-N-G-S 2 (9:28 a.m.) 3 MR. BURCH: Would the room please come 4 to order. 5 CHAIR TSAO: Good morning and welcome. 6 The Office of the U.S. Trade Representative, in 7 conjunction with the interagency Section 301 8 Committee, is holding this public hearing in 9 connection with the Section 301 investigation of 10 China's acts, policies, and practices related to 11 technology transfer, intellectual property, and 12 innovation. 13 As explained in the notice published 14 on May 17, 2019, the U.S. Trade Representative, 15 at the direction of the president, is considering 16 a modification of the action being taken in the 17 investigation in the form of additional duties of 18 up to 25 percent on a list of products from China 19 with an annual trade value of approximately $300 20 billion. 21 The purpose of this hearing is to 22 receive public testimony regarding the proposed Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 7 1 tariff action. 2 The Section 301 Committee will 3 carefully consider the testimony and the written 4 comments, including post-hearing rebuttals, and 5 will then make a recommendation to the U.S. Trade 6 Representative. 7 Before we proceed with the testimony, 8 I will provide some procedural and administrative 9 instructions, and ask the agency representatives 10 participating in the hearing today to introduce 11 themselves. 12 The hearing is scheduled for seven 13 business days, concluding today, Tuesday, June 14 25th. Today is Day 7 of the hearing. We have 15 scheduled 55 panels of witnesses with over 300 16 individuals scheduled to testify. 17 The provisional schedule has been 18 posted on the USTR Web site. We have seven 19 panels of witnesses testifying today. We will 20 have a brief break between each panel and a 50- 21 minute break for lunch. 22 Each witness appearing at the hearing Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 8 1 is limited to five minutes of prepared testimony. 2 The light before you will be green when you -- 3 the light here, will be green when you start your 4 testimony, yellow means you have one minute left, 5 and red means that your time has expired. 6 After the testimony from each panel of 7 witnesses, the Section 301 Committee will have an 8 opportunity to ask questions. Committee 9 representatives will generally direct their 10 questions to one or more specific witnesses. 11 As stated in the May 17th notice, 12 post-hearing comments, including any written 13 responses to questions from the Section 301 14 Committee are due seven days after the last day 15 of the hearing. 16 As noted, the hearing is scheduled to 17 conclude today, June 25th, which means that all 18 post-hearing comments are due by no later than 19 July 2, 2019. The rules and procedures for 20 written submissions are set out in the May 17th 21 notice. 22 Given the number of witnesses and the Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 9 1 schedule, we request that witnesses, when 2 responding to questions, be as concise as 3 possible. Witnesses should recall that they have 4 a full opportunity to provide a more extensive 5 response in their post-hearing submissions. 6 No camera, or video, or audio 7 recording will be allowed during the hearing. 8 Written transcripts of this hearing will be 9 posted on the USTR Web site and on the Federal 10 Register docket. 11 We're pleased to have international 12 trade and economic experts from a range of U.S. 13 Government agencies, and at this time, I would 14 like to ask the Committee to introduce themselves 15 starting with myself. 16 My name is Arthur Tsao. I'm an 17 Associate General Counsel at USTR. 18 MR. FRATERMAN: Matthew Fraterman, 19 Department of Labor. 20 MR. BLAHA: Chris Blaha, International 21 Trade Administration at the U.S. Department of 22 Commerce. Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 10 1 MS. ROY: Tracy Roy, U.S. Customs and 2 Border Protection. 3 MS. ADAMS: Julie Adams from the State 4 Department's Bilateral Trade Office. 5 MR. SULLIVAN: Matthew Sullivan, U.S. 6 Department of the Treasury, Office of 7 International Trade and Investment Policy. 8 MS. ZHAO: Shelly Zhao, USTR China 9 Office. 10 MS. COVERT: Erin Covert, Department 11 of Agriculture, Foreign Agricultural Service. 12 MR. BURCH: Mr. Chairman, I'd like to 13 make a note, to all the witnesses on the panel, 14 can you please speak clearly into the microphone, 15 and if you have to, pull the microphone up to you 16 for the benefit of the court reporter and the 17 members in the audience. 18 Our first panel witness for this panel 19 will be Blake Hanson with Industrial Oil 20 Products. Mr. Hanson, you have five minutes. 21 Will you please turn on your microphone? 22 MR. HANSON: Good morning. My Neal R. Gross and Co., Inc. (202) 234-4433 Washington DC www.nealrgross.com 11 1 company, Industrial Oil Products, is an 2 internationally recognized specialist in tung 3 oil, a non-edible vegetable oil used in a variety 4 of inks, resins, varnishes, coatings, and other 5 industrial products. 6 While there are other nut oils 7 imported under HTS 1515.90.21, Chinese tung oil 8 represents some 98 to 100 percent of the nut oils 9 imported from China under HTS 1515.90.21.
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