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1UNITED STATES TRADE REPRESENTATIVE 301 COMMITTEE SECTION 301 TARIFFS PUBLIC HEARING TUESDAYJULY 24, 2018 The 301 Committee met in the Courtroomof the U.S. International Trade Commission, 500E Street, SW, Washington, D.C., at 9:30 a.m.,William Busis and Arthur Tsao, Co-Chairs,presiding.PRESENTWILLIAM BUSIS, Chair, U.S. Trade RepresentativeARTHUR TSAO, Chair, U.S. Trade RepresentativeALEXANDER ABAJIAN, Council of Economic AdvisersRAVI BHARWANI, Department of Health and HumanServicesCHRISTOPHER BLAHA, Department of CommerceDOVIE HOLLAND, Department of StateANN MAIN, Department of CommerceMAUREEN PETTIS, Department of LaborKATE PSILLOS, Department of CommerceTRACY ROY, Department of Homeland Security,Customs and Border ProtectionARI SULBY, Department of StateTIMOTHY WINELAND, U.S. Trade RepresentativeAMY ZUCKERMAN, Department of TreasurySTAFF PRESENTBILL BISHOP, U.S. International Trade CommissionTYRELL BURCH, U.S. International TradeCommissionNEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

2WITNESSES PRESENTS. GEORGE ALFONSO, HomeServe USARICHARD BAILLIE, Fluoropolymers Trade AllianceANDY BARNAUSKAS, Banner EngineeringPHILLIP BELL, Steel Manufacturers AssociationGUY BENTLY, Reason FoundationPAUL BLAIR, Americans for Tax ReformMARK BRADLEY, K2 Urethanes, LLCTIMOTHY BRIGHTBILL, SolarWorld Americas, Inc.RANDY BUSCH, Value Vinyls, Inc.SAGE CHANDLER, Consumer Technology AssociationJOSEPH COHEN, Snow Joe, LLCJAKE COLVIN, National Foreign Trade CouncilGREGORY CONLEY, American Vaping AssociationCATHERINE CUMMISKEY, CellMark USA, LLCBRITTANI CUSHMAN, Vapor Technology AssociationJONATHAN DAVIS, SEMICRAIG DEAN, Dean Technology, Inc.ARNAUD DUMAS DE RAULY, Blinc GroupDANIEL DUNCAN, Peerless ManufacturingBERNARD FELDMAN, American Wire Group & ClassicWire and CableRICK FIREHAMMER, Universal Electronics, Inc.MIKE GRAY, Valmet CorporationJANE HARDY, Brinly-Hardy Co.ROBERT HINSCH, Top Value Fabrics, Inc.GREGORY HUSISIAN, Alps ElectricDAVID ISAACS, Semiconductor Industry AssociationED JENKINS, Impak Films US, LLCJOSH KALLMER, Information Technology IndustryCouncilMICHAEL KERSEY, American Lawn Mower Co.MARK KINZIE, Logitech, Inc.DAVID KOERNER, Kittrich CorporationMATT KOPKO, Bird Rides, Inc.STEVE KORN, Kimball Electronics, Inc.GARY LOBAZA, MTD Products, Inc.LEE MAO, Lianda CorporationHEIDI McAULIFFE, American Coating AssociationGREG MERRITT, Cree, Inc.CHARLIE MURRAH, Southwire Company, LLCTRACY MUSGROVE, Revolutionary Vapes, LLCNEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

3BILL NEW, Coalition of Energy EquipmentManufacturersLINDA ROUSE O'NEILL, Health IndustryDistributors AssociationAL PAPE, Shamrock Technologies, Inc.SLONE PEARSON, Fortive CorporationDEAN PINKERT, Solar Energy IndustriesAssociation, Inc.JOSEPH PON, Applied Materials, Inc.HUN QUACH, Retail Industry Leaders AssociationSHI CHAO QUAN, ZTT InternationalCHRIS RICE, Daikin Applied AmericasAARON SCHAPPER, Valmont Industries, Inc.CHARLIE SOUHRADA, North American Association ofFood Equipment ManufacturersGARY STANITIS, Daikin AmericaROBERT G. STRAHS, II, Priority Wire & Cable,Inc.KEN STRAIT, Tractor Supply CompanyJACOB STURGEON, Wanhua Chemical (America) Co.,Ltd.DONALD SZCZEPANIAK, PrismviewCRAIG UPDYKE, National Electrical ManufacturersAssociationCARRIE WADE, R Street InstituteNATHAN WALKER, Goodman Global, Inc.LARRY WILLIAMS, Steel Framing IndustryAssociationBO YI, Southeast University Law SchoolDAVID ZALESNE, American Institute of SteelConstructionNEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

4CONTENTSOpening Statement from Chair andIntroduction of the 301 Committee . 7Panel OneRichard Baillie, Fluoropolymers TradeAlliance . 18Mark Bradley, K2 Urethanes, LLC . 24Kate Cummiskey, Cellmark USA, LLC . 28Jacob Sturgeon, Wanhau Chemical America . 32Lee Mao, Lianda Corporation . 38Heidi McAuliffe, American CoatingAssociation . 43Al Pape, Shamrock Technologies, Inc. . 48Charlie Souhrada, North American Associationof Food Equipment Manufacturers . 54Panel TwoRick Firehammer, Universal Electronics, Inc. . 74Sage Chandler, Consumer TechnologyAssociation . 81Jonathan Davis, SEMI . 85Bernard Feldman, American Wire Group &Classic Wire and Cable . 89Robert G. Strahs II, Priority Wire& Cable, Inc. . 93Charlie Murrah, Southwire Company, LLC . 98Craig Updyke, National Electrical ManufacturersAssociation . 103Donald Szczepaniak, Prismview . 109Panel ThreeJoseph Cohen, Snow Joe, LLC . 127Jane Hardy, Brinly-Hardy Co. . 133Michael Kersey, American Lawn Mower Co. . 138Greg Merritt, Cree, Inc. . 143Joseph Pon, Applied Materials, Inc. . 148Gary Stanitis, Daikin Americas . 154NEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

5Panel FourAndy Barnauskas, Banner Engineering . 180Timothy Brightbill, SolarWorldAmericas, Inc. . 186Craig Dean, Dean Technology, Inc. . 191Mike Gray, Valmet Corporation . 196David Isaacs, Semiconductor IndustryAssociation . 202Josh Kallmer, Information Technology IndustryCouncil . 207Dean Pinker, Solar Energy IndustriesAssociation, Inc. . 211Steve Korn, Kimball Electronics, Inc. . 216Panel FiveRandy Busch, Value Vinyls, Inc. . 237Robert Hinsch, Top Value Fabrics, Inc. . 243Ed Jenkins, Impak Films US, LLC . 248Davis Koerner, Kittrich Corporation . 254Sloane Pearson, Fortive Corporation . 260Hun Quach, Retail Industry LeadersAssociation . 267Chris Rice, Daikin Applied Americas . 272Linda Rouse O'Neill, Health IndustryDistributors Association . 278Panel SixMark Kinzie, Logitech, Inc. . 295Guy Bently, Reason Foundation . 303Gregory Conley, American VapingAssociation . 310Brittani Cushman, Vapor TechnologyAssociation . 315Arnaud Dumas de Rauly, Blinc Group . 322Tracy Musgrove, Revolutionary Vapes, LLC . 327Carrie Wade, R Street Institute . 334Shi Chao Quan, ZTT International . 337NEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

6Panel SevenPhillip Bell, Steel ManufacturersAssociation . 348Daniel Duncan, Peerless Manufacturing . 354Aaron Schapper, Valmont Industries, Inc. . 358Bill New, Coalition of Energy EquipmentManufacturers . 364Ken Strait, Tractor Supply Company . 367Larry Williams, Steel Framing IndustryAssociation . 373David Zalesne, American Institute of SteelConstruction . 377Panel EightS. George Alfonso, HomeServe USA . 399Paul Blair, Americans for Tax Reform . 406Matt Kapko, Bird Rides, Inc. . 412Gary Lobaza, MTD Products, Inc. . 417Nathan Walker, Goodman Global, Inc. . 423Bo Yi, Southeast University Law School . 429Jake Colvin, National Foreign Trade Council . 433Gregory Husisian, Alps Electric . 438Adjourn . 455NEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

7P-R-O-C-E-E-D-I-N-G-S1(9:34 a.m.)2MR. BISHOP:34to order?CHAIR56Will the room please comeBUSIS:Goodmorningandwelcome.7The Office of the United States Trade8Representative in conjunction with the on11investigation12practices13intellectual property, and ,14The United States Trade Representative15initiated this investigation on August 18, 2017.16On June 20, 2018, USTR published a17FederalRegister18Representative's19additional duty of 25 percent on products from China20with an annual trade value of approximately L R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

81The June 20 notice also seeks public2comment on proposed additional trade action to be3taken in the investigation.4The proposed additional action is an5additional 25 percent duty on a list of products6from7approximately 16 eofthis Hearing is toreceive public testimony regarding the proposedadditional action.The11Section301Committeewill12carefully consider the testimony, the written13comments14Federal Register notice, and the post-Hearing15comments due on July 31.alreadyreceivedinresponsetothe16The 301 Committee will then make a17recommendation to the Trade Representative on18additional action to be taken in the investigation.1920At this time, I would like to welcome21our first witness, Representative Kevin Cramer of22North Dakota, to the Hearing.RepresentativeNEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

91Kevin Cramer, you have the floor.2REPRESENTATIVE CRAMER:Thank you, Mr.3Busis, and Members of the Trade Policy Committee.4As I said to you in May of this year,5I support President Trump's leadership in working6towards7relationship with China.amorefairandreciprocaltrade8After years of unsuccessful U.S.-China9dialog, the United States is taking action to10confrontChinaover11market-distorting policies and practices, forced12technology13practices, and cyber-intrusions of United alproperty15It is past time we take strong defensive16actions to protect America's lead in technology17and18administrations in dealing with China's trade19issues has put this president in a ious21However, President Trump recognizes22that if we want the United States of America toNEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

101remain the most advanced and influential country2in the world, we must take an aggressive stand canWe recognize that President Trump uration Day, and we expect this effort to8continue until China comes to the table with a fair9and reciprocal agreement.10I'm here today to express my concern11regarding China's retaliatory tariffs that have12been imposed in response to the United States' early13efforts.14I represent agricultural producers and15manufacturers of North Dakota who have felt a direct16impact of China's retaliatory actions on ica.ofthemost19patrioticCollectively,20they're able to weather short-term pain if in the21end it yields long-term gain.However, with an already fragile farm22NEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com

111economy, retaliatory tariffs are further hindering2those who work tirelessly to feed the world with3safe, affordable, and nutritious food.4Net farm income is down 52 percent since 2013,5in one of the steepest declines since the Great6Depression.7by 33 percent from just two years ago and costs8of production have steadily climbed.Chapter 12 bankruptcies have edatoryof10farmingtrade11practices of foreign countries, including high and12rising subsidies, tariffs, and non-tariff trade13barriers.14China retaliated by imposing tariffs15on a number of U.S. goods, including a 25 percent16import tariff on U.S. soybeans.North Dakota ranks among the top-ten1718soybean-growing states.This year there are 6.619million acres of soybeans in the ground in North20Dakota, a record high for the state, and the first21time there are more soybeans planted than corn.In 2017, Cass County, North Dakota,22NEAL R. GROSS(202) 234-4433COURT REPORTERS AND TRANSCRIBERS1323 RHODE ISLAND AVE., N.W.WASHINGTON, D.C. 20005-3701www.nealrgross.com