WASHINGTON, D.C. – Following the initiation of a comprehensive review of America’s trade policies ordered by President Trump, the Ways and Means Trade Subcommittee held a hearing to examine America’s trade enforcement priorities. In the first Trump term, strong and strategic trade enforcement initiatives ultimately led to new export opportunities for American producers and tackled decades-long unfair trade practices of foreign nations. In their testimonies before the committee, witnesses detailed how the Biden Administration was too passive when it came to trade enforcement, to the detriment of American farmers, workers, and businesses. The hearing highlighted multiple tariff and non-tariff barriers facing American goods and services in foreign markets around the world.

The top-to-bottom review of American trade policy by the Trump Administration is expected to be completed by April 1. 

Biden Administration Failed to Enforce Trump China Agreement

President Trump successfully used tariffs to get China to the negotiating table and sign the historic Phase One agreement in 2020. After decades of American manufacturers shipping jobs and operations overseas, this agreement finally held China accountable for unfair trade practices that undercut American businesses. Unfortunately, the Biden Administration did not enforce the agreement and did not identify the areas where China refused to comply, robbing U.S. workers and producers of the benefits of this agreement. 

Rep. Adrian Smith (NE-03): “It’s important for the Trump administration to assess commitments upheld and missed in the U.S.-China Phase One agreement. Among other important issues, there is an opportunity to meaningfully enforce China’s patent linkage regime per its commitments under the pact, and also to push for meaningful and enduring resolutions for outstanding market access issues tied to China’s poor track record when it comes to approving ag biotech applications…In particular, how should the Trump team address these shortfalls related to patent linkage and market access, especially for ag biotech products, both in the context of the agreement and in the broader bilateral relationship?”

Ambassador Jeffrey Gerrish, former Deputy USTR under President Trump: “In those two issues that you’ve mentioned, patent linkage and the ag biotech provisions, were a couple of the most important provisions that we negotiated as part of the Phase One agreement with China. On patent linkage, our right holders continue to experience problems with the inability to get early resolution of patent disputes through the patent linkage system. There’s a lack of transparency. They are not able to get preliminary injunctive relief, and the relief that they get doesn’t last as long as they need it to. There’s a bias being shown for Chinese companies in that process. It’s a major problem. Ag biotech, there’s similar issues, similar problems. That was a massive issue in the negotiations. It’s been a longstanding problem for the United States. Again, there’s a lack of transparency. We did agree to have them implement a science-based process with transparency. They’re simply not doing it and our companies are not getting the approvals and our farmers and ranchers are not getting the approvals that they should be getting through that process…

“We have a very strong enforcement mechanism that we spent a lot of time negotiating in the Phase One trade agreement…That mechanism should be used by this administration. It should be used by future administrations to take action to enforce the commitments that China made in the Phase One agreement.”

China’s De Minimis Abuse Undercuts Trump’s China Tariffs

In President Trump’s first term, he imposed tariffs to stop China’s unfair trade practices related to technology transfers, intellectual property, and other issues. In response, Chinese companies have abused America’s de minimis trade privilege, undermining the effectiveness of these tariffs. Just days into his second term, President Trump took swift action to curb the de minimis privilege for China to strengthen trade enforcement. 

Chairman Jason Smith (MO-08): “Imports coming into the country from China under the de minimis policy spiked from 208 million packages in 2018 to more than 640 million in 2023, a 208 percent increase. There’s a lot of evidence that China’s abuse of de minimis accelerated to try to evade President Trump’s Section 301 tariffs. Without significant reforms de minimis entries will undermine new tariffs that President Trump imposes this term. Do you agree that reforming de minimis is an urgent priority to further strengthen President Trump’s tariff and trade agenda?”

Ambassador Jeffrey Gerrish, former Deputy USTR under President Trump: “I do agree that reforming de minimis is an urgent priority to make sure that our trade enforcement efforts are made as effective as possible. China has really abused the de minimis exception that’s available here. They account for the vast majority of the imports that come in under the de minimis exception, and it has become a massive loophole in our trade enforcement efforts.”

“Looks Like Discrimination”: Chinese Digital Companies Treated Better Than U.S. Competitors

The Republic of Korea is advancing new regulations targeting U.S. technology companies based on arbitrary criteria. Notably, Chinese and South Korean competitors are effectively excluded from this regulatory framework. The Republic of Korea is not the only government targeting America’s global technological leadership. Multiple foreign governments, including the European Union and Canada, have targeted American digital leadership with discriminatory trade and tax policies. Over the last four years, the Biden Administration took weak action to combat this discrimination and even abandoned long-held bipartisan stances that protected American technology in the global economy. 

Rep. Carol Miller (WV-01): “Trade partnerships are a two-way street and I have serious concerns that some of our partners aren’t holding up their end of the bargain. Last Congress, I introduced the U.S.-Republic of Korea Digital Trade Enforcement Act that protects American digital companies if Korea passes a law that harms digital businesses. It’s my understanding that the Republic of Korea is still pursuing this legislation, albeit under the guise of a so-called ‘ex post framework’ that covertly still targets specific U.S. companies. Mr. McHale, do you believe both the Online Platform Monopoly Regulation Act and the Korean Fair Trade commissioners ‘ex post’ approach amount to discrimination against US companies? Do you believe that the Trump administration should seek trade and other enforcement remedies to ensure this type of Korean discrimination against the U.S. company no longer occurs?”

Jonathan McHale, Vice President of Digital Trade at the Computer & Communications Industry Association: “Short answer is yes. If you look at the service definitions and the thresholds that the Korea Fair Trade Commission’s proposal institutes, both are clearly aimed at targeting U.S. firms, even though some Korean companies may be swept in. The key question is: does it put the U.S. firms at a competitive disadvantage when competing in the market? What we’ve seen is that Chinese companies are rapidly coming into the market. I think the revenues are now up to $2 billion a year. They would not fall within the thresholds or service definitions from what I understand, so U.S. companies are competing against both Korean companies and Chinese companies in the market based on specific definitions, subject through this proposed law to find prohibited conduct and injunctive action that are not applicable to their competitors. For me, that looks like discrimination.”

Foreign Bureaucrats Coming to A Dairy Farm Near You

USMCA opened the Canadian dairy market to American farmers. However, the Canadian government has manipulated the rules in order to deny access to American dairy products. As a former Trump trade official shared, the manipulation of trade rules to hurt American dairy farmers is not limited to Canada. The European Union also treats these same farmers unfairly through burdensome certification requirements, including potentially sending its bureaucrats to grill American farmers on their land about their methods and practices.

Rep. Lloyd Smucker (PA-11): “Ambassador Doud, but could you talk about the real impact on American farmers if we don’t get this right, if Canada continues to go against the spirit of the USMCA in regards to its dairy policy.”

Ambassador Gregg Doud, former USTR Chief Agriculture Negotiator under President Trump: “I think it has a particular impact in New York and Pennsylvania…The people in Canada are in the Toronto area, Ontario area; that’s where the folks live. That’s our natural market just as much as it is population centers in the U.S. I want to make particular emphasis on the European Union, with regard to dairy as well. We’ve talked today about the lack of ability to export this. We provide the European Union country-specific TRQ into the US. They don’t give us any leeway in that regard. There’s so many certification requirements, process requirements. Now they’re talking about…the European Union wants to come on the farm and interview our farm workers…The list goes on and on, and it’s high time that we engage with the Europeans on this subject of ag trade.”