American Trade Negotiation Priorities

House Ways and Means Subcommittee on Trade

2025-03-25

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Summary

This meeting of the subcommittee focused on articulating U.S. trade priorities and the direction of trade policy, particularly in anticipation of President Trump's "America First" agenda implementation in April.[ 00:39:03-00:39:26 ]

Members and witnesses discussed past trade successes and failures, the impact of tariffs on American industries, the constitutional roles in trade negotiation, and opportunities in digital and services trade.[ 00:39:34-00:39:59 ] [ 00:42:59 ]

Themes

U.S. Trade Policy and the "America First" Approach

The discussion centered on renewing an aggressive trade posture, building on what were described as historic negotiation successes during President Trump's first term, such as USMCA, China Phase I, and the U.S.-Japan Trade Agreement.[ 00:39:17-00:39:50 ]

These agreements were credited with removing tariff and non-tariff barriers, leveling the playing field for American industries, and achieving fair treatment for the U.S.[ 00:39:53-00:40:21 ] The current administration is lauded for its renewed engagement with trading partners to pursue new bilateral or sectoral agreements and assess global trade barriers.[ 00:41:26-00:41:43 ] Conversely, some members expressed strong concerns, arguing that President Trump has recklessly used tariff authority against close trading partners, distorting and weaponizing power to serve his own interests and destabilize America's economic standing.[ 00:43:15-00:43:24 ] Critics view his approach as an "inconsistent shoot now, aim later" tactic that undermines trust and increases input costs.

Impact of Tariffs and Trade Barriers on U.S. Industries

Several industries highlighted significant challenges due to foreign tariffs and non-tariff barriers. American beef producers face high tariffs (e.g., 50% in Thailand, 30% in Vietnam) and non-tariff barriers in markets like Australia and Europe, impeding access for U.S. beef exports. Harley-Davidson detailed severe retaliatory tariffs, including a 56% total tariff from the EU and a 25% tariff from Canada, contrasting sharply with the 0-2.4% import duty international motorcycle brands face in the U.S. These burdens make U.S.-made products disproportionately expensive abroad and put American manufacturers at a competitive disadvantage, leading to calls for fairness and reciprocity in trade.

Congressional Authority in Trade Negotiations

The importance of cooperation between the legislative and executive branches in trade agreement formation was emphasized.[ 01:13:46 ]

Agreements approved by Congress are seen as more durable, ambitious, balanced, and legitimate, enjoying bipartisan support and providing greater certainty for businesses and workers.[ 01:23:06-01:23:24 ] Concerns were raised about executive branch agencies concluding hundreds of trade-related agreements without clear congressional authorization or approval, potentially circumventing regular rulemaking and important guardrails. Critics highlighted the need for Congress to reassert its constitutional authority over foreign commerce and the imposition of taxes and tariffs, especially given executive actions perceived as overreach.

Digital and Services Trade

Services are recognized as the backbone of the American economy, generating a substantial trade surplus and supporting other sectors like agriculture and manufacturing. However, the rise of global trade barriers, including data localization requirements, discriminatory digital sovereignty, digital services taxes (DSTs), and censorship, threaten the U.S. competitive advantage. High-standard services and digital trade disciplines, including promotion of cross-border data flows, prohibitions against forced data localization, and bans on discrimination, are deemed central to future U.S. trade agreements. Specific issues with China (non-compliance with Phase One commitments, harassment of companies), Canada (DST, audiovisual legislation), and Mexico (VAT interpretation) were noted.

Specific Market Opportunities and Challenges

A comprehensive trade agreement with the United Kingdom was identified as a top priority, offering an opportunity to innovate in regulatory cooperation and craft state-of-the-art provisions reflecting similar advanced industries and standards. This could help the UK move away from legacy EU regulations that are often restrictive and non-science based, particularly impacting agricultural exports.[ 01:18:13 ]

Challenges remain in the Indo-Pacific, where U.S. lack of engagement allows countries to impose high tariffs and non-tariff barriers, benefiting competitors who manufacture within regional trade blocs. Concerns were also raised about Brazil and Paraguay exporting beef to the U.S. despite a history of foot and mouth disease, posing a risk to the U.S. cattle herd and consumers.

Tone of the Meeting

The tone of the meeting was largely polarized, reflecting a deep partisan divide on President Trump's "America First" trade policies. Republican members and some witnesses expressed strong support for the administration's aggressive stance against unfair trade practices and tariffs, viewing them as necessary tools to level the playing field for American industries.[ 00:39:03-00:39:59 ]

[ 01:30:05-01:30:25 ] They emphasized the need for fair and reciprocal trade to benefit American workers, farmers, and manufacturers. Democratic members, conversely, voiced significant criticism and concern, labeling the tariff actions as reckless, chaotic, and an overreach of executive power that destabilizes the economy, harms alliances, and ultimately burdens American consumers and businesses.[ 00:43:15-00:43:24 ] Despite these strong disagreements, there was a shared recognition of the need to address foreign trade barriers and expand market access for U.S. exports.[ 00:42:59 ]