Commerce Pick Wilbur Ross Targets China

“China is the most protectionist country of very large countries that have both very high tariff barriers and very high non-tariff trade barriers to comers. So they talk much more about free trade than they actually practice. We would like to level that playing field and bring the realities a bit closer to the rhetoric.”

Ross insisted that he is not antitrade but wants trade that allows fair competition.

Said Ross, “I’m not anti-trade, I’m pro trade. But I’m pro sensible trade. Not pro trade that is to the disadvantage of the American worker and the American manufacturing community. I think we should provide access to our markets to those countries who play fair, play by the rules, and give everybody a fair chance to compete. Those who do not, should not get away with it. They should be punished and severely.

“I think that we cannot afford trade that is inherently bad for American workers and for American businesses but I think there are plenty of opportunities to expand our exports. And, I think the number one objective will be expanding our exports.”

During his questioning by Minnesota Sen. Amy Klobuchar, Ross blamed illegal dumping of steel on overcapacity.

“We’ve had an incredible downturn due in part to overcapacity but also due to steel dumping, which is illegal. And recently there has been some good actions taken by the Commerce Department.”

Ross vowed to continue to address the issue, noting, “China has one billion tons of capacity. That’s half of the world’s capacity. They need something like 700 million tons domestically. They are actually producing 800 million tons and putting 100 million tons out into the world markets, often at dumping prices.”

Ross said that steel must be tracked to its origins and noted that foreign shell companies have been effective in evading duties. “There is not much point going through a multi-year trade case, and in case you win, you don’t even collect the countervailing duties. That doesn’t change anybody’s behavior and it is a loss of revenue to the federal government.”

As the questioning turned to trade closer to home, Ross said that dealing with NAFTA will be a “very, very early topic in this administration.”

“NAFTA is logically the first thing for us to deal with,” said Ross. “We must solidify relationships in the best way we can in our own territory before we go off to other jurisdictions.”

He added, “There should be systematic reopeners of trade agreements after a few-year period. An automatic reopener, whether it’s a sunset provision or just a reopener, would be a very useful thing.”

Ross shrugged off the ideal of Trump’s proposed 35 percent tax on products manufactured by US companies in Mexico, calling it a “complicated issue” and a shrewd negotiating tactic.

“I think the president-elect has done a wonderful job preconditioning some of the other countries with whom we will be negotiating that change is coming,” Mr. Ross said.

The new administration’s threats of more tariffs on China and Mexico have prompted fears of a trade war. Ross said tariffs play an important role in negotiating and punishment but that he was aware of the negative effects of the Smoot-Hawley Tariff Act in the 1930s, where nations retaliated against tariffs on thousands of products with taxes of their own. “It did not work very well then, and it very likely wouldn’t work now,” said Ross.

If Ross is confirmed he will be working with trade lawyer Robert Lighthizer as U.S Trade Representative and a new trade council headed by China economic critic Peter Navarro. Ross also has the support of Leo Gerard, president of the United Steelworkers International.