Last year the U.S. recorded a $51 billion deficit in the food, feed and beverages sector of the agricultural trade, according to the Bureau of Economic Analysis.
USTR is the lead trade diplomat. Greer will be replacing Tai, who replaced Robert Lighthizer, a man who has made the latter years of his career all about building a bipartisan consensus on trade. Greer is on board with that agenda, as are many senators, despite fears of retaliatory tariffs, including Smith, who said so herself in the question and answer period. She summed up the trade story much in the way Tai or Lighthizer would have.
“Our national trade policy has really failed American workers under both Republican and Democratic administrations. The profits of multinational corporations who wanted to import cheap goods were put ahead of those who want to make things and I think there is a direct connection to that and to the inequality we see today,” she said. “Trade is not just about jobs, it is about national security. We are way too dependent on China, for example, for critical medicines,” she said.
Greer later told Sen. Ron Johnson (R-WI) that pharmaceuticals, namely active pharmaceutical ingredients, or API, “would be top of his list” of things to bring back to the United States. “My expectation is that the Trump administration is simultaneously thinking of tax policy and regulatory policy as well to make that happen.”
Global trade is complex. Tens of thousands of products cross borders daily, some tariffed, some not. It is the burden of USTR to explain to the Senate Finance Committee that the country cannot keep the decades-old status quo on trade out of fear that farmers will lose markets, or certain industries will see a margin squeeze.
Farmers have been losing markets for years. Industries in the U.S. have been wiped out, with cities and towns where factories once stood, like Camden, New Jersey back in the days of RCA factories, now stuck with 1980s level income 30 years later.
Despite decades of free trade agreements, export volumes of many grain products, including America’s most important cash crops – corn and wheat – have remained stagnant for 20 years, said a CPA report published on Feb 5. Wheat export volumes are lower than in 2000; “free trade” has provided only limited benefits for these substantial crops thanks in large part to the fact that other countries do not want their farms to be overrun by American production.
In USTR Nominee Hearing, Senate Finance Bemoans Tariffs, Wants Open Markets for Agriculture
Jamieson Greer seems certain to be approved as the next United States Trade Representative (USTR), but the Democrats on the Senate Finance Committee proved once again that they are anti-tariff—unless the target is China. Throughout Thursday’s confirmation hearing, they voiced their concerns about broad-based tariff policies, including the past threats of tariffs against Colombia, Mexico and Canada on national security grounds, while simultaneously advocating for opening global markets to agriculture.
The biggest takeaway from the hearing is that Senate Finance wants to have a final say on Trump’s tariffs, only really likes the China tariffs – by and large – and is convinced that if the U.S. could only export more goods, especially agricultural goods, the record breaking $1.22 trillion goods deficit would shrink. The actual economic data, however, shows that this is purely wishful thinking.
Senator Maria Cantwell (D-WA) was one of many Committee members who were vocal about the need to boost agricultural exports, arguing that if the U.S. had greater access to foreign markets, the country wouldn’t be facing such large trade deficits. “The biggest task at hand is to get more free trade agreements to get more exports,” she said.
“I want a continuation of the Bush and Clinton administration, where we opened our markets for agricultural products,” she said, offering up her state’s example of the impact of retaliatory tariffs on farmers. Washington apple exports to India collapsed from roughly $100 million to almost $1 million in Trump’s first term.
It took former USTR Katherine Tai many years to finally reopen that market. But even still, the Bush and Clinton era trade policies were disastrous for the U.S., where the country saw millions of jobs offshored and the nation’s industrial capacity faced a significant decline. A CPA comprehensive analysis of 927 U.S. cities and towns shows that job loss in manufacturing due to China imports since 2001 has affected almost every community in the U.S., including towns and cities in all fifty states.
“This is going to be a real issue of concern for us in Minnesota,” said Sen. Tina Smith (D-MN). She was lamenting the recent tariff threats over the past two weekends. “They built those trade relationships with Colombia only to feel that the ground was being pulled out from under them and trade agreements take a long time to build. For every action there is a reaction. This is an area where we are going to have significant challenges,” she said.
Last year the U.S. recorded a $51 billion deficit in the food, feed and beverages sector of the agricultural trade, according to the Bureau of Economic Analysis.
USTR is the lead trade diplomat. Greer will be replacing Tai, who replaced Robert Lighthizer, a man who has made the latter years of his career all about building a bipartisan consensus on trade. Greer is on board with that agenda, as are many senators, despite fears of retaliatory tariffs, including Smith, who said so herself in the question and answer period. She summed up the trade story much in the way Tai or Lighthizer would have.
“Our national trade policy has really failed American workers under both Republican and Democratic administrations. The profits of multinational corporations who wanted to import cheap goods were put ahead of those who want to make things and I think there is a direct connection to that and to the inequality we see today,” she said. “Trade is not just about jobs, it is about national security. We are way too dependent on China, for example, for critical medicines,” she said.
Greer later told Sen. Ron Johnson (R-WI) that pharmaceuticals, namely active pharmaceutical ingredients, or API, “would be top of his list” of things to bring back to the United States. “My expectation is that the Trump administration is simultaneously thinking of tax policy and regulatory policy as well to make that happen.”
Global trade is complex. Tens of thousands of products cross borders daily, some tariffed, some not. It is the burden of USTR to explain to the Senate Finance Committee that the country cannot keep the decades-old status quo on trade out of fear that farmers will lose markets, or certain industries will see a margin squeeze.
Farmers have been losing markets for years. Industries in the U.S. have been wiped out, with cities and towns where factories once stood, like Camden, New Jersey back in the days of RCA factories, now stuck with 1980s level income 30 years later.
Despite decades of free trade agreements, export volumes of many grain products, including America’s most important cash crops – corn and wheat – have remained stagnant for 20 years, said a CPA report published on Feb 5. Wheat export volumes are lower than in 2000; “free trade” has provided only limited benefits for these substantial crops thanks in large part to the fact that other countries do not want their farms to be overrun by American production.
Senators Debate the Wisdom of Trump’s Tariff Policy
The hearing was one of the earliest USTR confirmation hearings ever held, highlighting the urgency surrounding the position in Trump’s trade-centric cabinet.
Chairman Mike Crapo (R-ID) stressed that Greer needs to report to the Finance Committee and keep them informed on trade negotiations. He criticized Tai for failing to negotiate new trade agreements and for not sufficiently consulting the committee. Crapo also reiterated the need for reciprocity in trade, falling back on agriculture, saying that tariffs imposed by countries such as India and Turkey (well into the 30% range) exceed those levied by the U.S.
Ranking Member Ron Wyden (D-OR) launched into a strong critique of Trump’s trade policies, claiming that tariffs had raised costs for American consumers and businesses despite the fact that the China 301 tariffs did not impact core inflation.
“Trump has lied to the American people about who pays these tariffs,” he stated, asserting that American companies, not foreign governments, bear the brunt of tariff-related costs. Wyden also questioned whether universal tariff hikes – aka revenue tariffs – had ever historically benefited the U.S. economy.
Greer pointed to historical precedent, recalling how, in the late 19th century, the U.S. had a high tariff system while the United Kingdom lowered its tariffs and subsequently lost its industrial competitiveness. Greer emphasized that trade policy must focus on balanced trade and preventing the offshoring of American manufacturing.
“The question is how large of a trade deficit do we want, because that represents a lot of manufacturing that has gone overseas,” Greer said.
CPA Strongly Supports Jamieson Greer as the Next U.S. Trade Representative
CPA submitted a formal statement of support to the Senate Finance Committee, urging Greer’s confirmation and highlighting his leadership in implementing policies that protected U.S. manufacturers, farmers, and ranchers from being displaced by imports.
Once Again, Senators Demand More Market Access for Agriculture
Agriculture will be a sticking point for Trump’s tariff plans. Every time Trump puts a tariff policy on offer, the agriculture sector – and their Senators – are going to push back on it. Greer and Trump will need answers to their questions.
As usual, Crapo, Cantwell, and Senator Steve Daines (R-MT) all pushed Greer to prioritize new markets for American farmers. This time, they highlighted smaller markets, giving Colombia as an example, where the U.S. has a free trade agreement and a trade surplus.
Still, a lot of the mindset on Capitol Hill is that trade negotiators should handle China with kid gloves or put our commodities markets there at risk. If this is the default position, Washington will be playing with one hand tied behind its back in trade negotiations if all Beijing has to do is say it’s going to ban American soy and beef imports.
“We must not forget that despite all the challenges we face with China, there are a lot of opportunities for our farmers to gain access to that market,” Daines said. He said China has not held up to its Phase One agreement on agriculture imports, a tough critique as no country will import items it does not need, especially items with short shelf lives.
China imported around 33 million tons of U.S. soybeans in 2017, the year before tariff retaliations began. But in 2023, the number was 20.8 million tons. In 2017, China imported $31 million worth of beef after a 14 year ban due to non-tariff barriers. In 2023 it was $126 million.
Greer said that he will review that agreement, adding that he was not sure that China and the U.S. really could ever have a healthy trade relationship. CPA agrees, and our recent analyses on the historic agricultural trade deficit and impact of trade agreements on the U.S. agricultural industry highlight the devastating consequences of decades of trade liberalization policies that have failed to deliver promised benefits for the majority of U.S. farmers and agricultural producers, especially smaller family farms.
China’s Trade Practices Take Center Stage
Senator John Cornyn (R-TX) pointed out that while China’s average tariff rate is around 7%, the country employs numerous non-tariff barriers that disadvantage American businesses. “China cheats. They steal our IP. They don’t recognize a rules-based order,” Cornyn said.
Greer added that China’s industrial overcapacity and state subsidies are as bad as IP theft and worse than non-tariff barriers. Their overproduction and dumping has “led to the deindustrialization of the United States,” Greer said.
Cornyn discussed the recent removal of China from the de minimis exemption for global e-commerce, which allows imports priced under $800 to enter the U.S. duty-free. Some CPA members have likened this provision to “micro dumping of products on a macro scale.”
“One of the things I’m concerned about is the failure to inspect all of these packages that come into the country,” Cornyn said.
Despite the immediate confusion surrounding the de minimis exclusion for China since Wednesday, Greer suggested the short-term chaos is worth it. “We have to make sure de minimis is not a loophole for counterfeit, narcotics, or to get around tariffs and expand our trade deficit,” he said.
Greer will be the third USTR in Washington to manage our shift in perspective on global trade. This is a post-globalist U.S. now. It will be rife with landmines.
The hearing underscored the bipartisan agreement on the need for strong trade enforcement against China, diversifying supply chains out of China, and even balancing trade overall. But there is also a consensus on the Committee that the use of tariffs comes at a price that many of their constituents are unwilling to bear.
See CPA’s study on Trump’s universal tariff proposal here.
The Committee is inclined to hit China with tariffs, less inclined to do so with Mexico, Canada and even the EU.
“Europe is a problem for us on trade,” Sen. Chuck Grassley (R-IA) admitted. He undoubtedly is against Europe’s barriers to U.S. farm goods.
That said, the Committee is obviously getting increasingly bothered by what they see as a lax USTR in opening new agriculture markets. This was clear under Tai in all of their hearings with her, and will be a problem for Greer as this Committee seems to be signalling that they are running out of patience on that front.
“We want to hear from people who will be affected by tariffs,” Greer said. “Trump’s first administration had tariffs and we saw real, median household income going up by $7,000 in three years. It was historic,” he said. “We need to stay the course.”
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