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Chairman Smith Opening Statement – Markup of Trade Legislation

April 16, 2024

“We need to use trade policies to secure a specific objective for America – in this case, standing up to China, opening up markets for our farmers, and improving the national and economic security of America.”

As prepared for delivery.

“Congress must counter our main economic competitor, China, as it continues to spread its global influence at the expense of American workers and producers.

“The package of policies before us today implements common sense reforms for the benefit of American consumers, workers, and farmers.

“Many of these bills end the special treatment exploited by Chinese companies for their own gain and that of the Chinese Communist Party. 

“They recognize that forced labor has found its way into our supply chain, in violation of U.S. law.

“They recognize that China has spent years and trillions of dollars to dominate developing markets that should be expanding markets for American exports.

“They recognize that when we rely too much on one country for medicine, energy, and other key goods, we risk the health, safety, and security of American citizens and lose our economic independence.

“The tools of trade do not need to be a one-way street into the United States. We need to use trade policies to secure a specific objective for America – in this case, standing up to China, opening up markets for our farmers, and improving the national and economic security of America. 

“The policies we are considering today take bold steps to give fair treatment to American producers and workers in foreign markets and strengthens our trade tools to crack down on exploitation that destroys communities and kills American jobs.

“Our first bill from Representative Tenney shows that America stands with Israel. Israel is an important trading partner. This legislation codifies into law a 2020 administrative change by Customs and Border Protection that requires labels to accurately reflect whether a product was made in Israel. Americans should have the knowledge and power to buy products that support Israel’s economy.

“The second bill, introduced by Representative Chris Smith, addresses the mining of cobalt – a critical component of EVs – which is done primarily in the Democratic Republic of the Congo, where Chinese firms control the vast majority of such mines and employ forced labor. The bill will help ensure the U.S. is not importing products made or mined through the use of forced labor by demanding tough enforcement of our forced labor import ban under Section 307 of The Tariff Act of 1930. 

“The next bill is a de minimis reform bill introduced by Doctor Murphy. Earlier this week, I met with the CBP Commissioner to discuss the challenges we face with de minimis. Right now, the de minimis privilege is being abused by foreign companies that import products into our country without paying duties. China is a master at this exploitation. Over 60 percent of the de minimis entries into America are from China alone. Something which has grown exponentially since the implementation of 301 tariffs on China. 

“This bill is an important first step to curbing the flow of de minimis shipments into the U.S. from China. It ends the de minimis privilege for goods affected by the Section 301 tariffs and other goods that threaten our national security and harm American producers. Simply put, this bill would make sure China can no longer use de minimis to escape the tariffs it rightfully owes and would cut de minimis value shipments from China in half. 

“Next, we will consider legislation from Representative Fischbach that addresses the Biden Administration’s unlawful attempts to redefine the nature of a free trade agreement to get around its own Inflation Reduction Act. This bill defines an FTA to be an international agreement that is approved by Congress. This is something Members on both sides have raised concerns about. It promotes the mining of critical minerals in countries that are allowing market access to U.S. agriculture and other U.S. products, and promotes the development of those minerals here at home. In places like Minesota and Missouri, we have vast resources of such minerals. This legislation forces the Administration to negotiate trade agreements that are sufficient to win support in Congress rather than made-up ‘frameworks.’

“Our next bill, introduced by Representative Miller, blocks China from profiting from the hundreds of billions of EV tax breaks in the Inflation Reduction Act. The Treasury Department created multiple loopholes that allow both Chinese billionaires with ties to the Chinese Communist Party and Chinese battery manufacturers to benefit from American taxpayer dollars. In fact, the foreign entity of concern regulations put out by the Department of Treasury are weaker than those put in place under the CHIPS Act to prevent foreign bad actors from gaining access to U.S. tax dollars. This legislation protects taxpayers and closes these loopholes.

“Our last bill is the GSP Reform Act introduced by Trade Subcommittee Chairman Smith. This bill represents the most significant reform and the longest renewal in the 50-year history of the Generalized System of Preferences. 

“GSP must be the tip of the spear in our approach to countering China. 

“These reforms will not only help shift our supply chains out from under the thumb of the Chinese Communist Party, but closes opportunities for Chinese companies to receive special treatment by permanently banning China from the program altogether. It also includes penalties for countries who expand their economic and military relationship with China.

“This legislation offers a choice to developing nations: grow your economy alongside the United States or stay with China, but you cannot do both.

“We are addressing several critical priorities today. However, I recognize that members continue to work on many other trade issues, including updates to our trade remedy laws, a Miscellaneous Tariff Bill, and Trade Adjustment Assistance.

“I look forward to working together to promote American workers and producers and sharpen America’s competitive edge against China.”