>> connect with c-span2 personalized information you get from us. go to c-span.org/connect and sign up for the e-mail. the program guide is a daily e-mail with the most updated primetime schedule and upcoming live coverage. word for word gives you the most interesting daily video highlight with no commentary. booktv newsletter sent weekly is an insiders look at upcoming authors and book festivals pick of the american history tv weekly newsletter gives you the upcoming programming exploring our nation's past. visit c-span.org/connect and sign up today. >> the afl-cio hosted a discussion about international trade and the trump administration's announced tariffs on steel and aluminum imports.

trade analysts talk about the policies affect on national security and jobs. this is one hour. >> thanks very much. we will go ahead and begin. welcome to the afl-cio. thank you very much for coming. my name is celeste drake and i work on trade and globalization policy for the afl-cio, and her 12.5 million 5 million members. i'm very excited to be introducing today's panel and the really important topics we are going to be discussing. talking about trade policy in washington, d.c. can often be extreme a frustrating. abundance and commentators too often apply the simplistic and, frankly, incorrect free trade versus protectionist dichotomy and think they have brilliantly said everything that there's a say on the topic. but they couldn't be more wrong. for instance, intellectual property rules are critical part of u.s. free trade agreement and trade policy but to represent a clear deviation from so-called

free trade. advocates like the afl-cio are often labeled as protectionists, even though we support duty-free treatment for most goods from most developing nations, and that's a distinctly free trade position. that's one interesting thing about this administration and its recent action on terrace. it's decision to protect national security by imposing so-called 232 232 tariffs on gl imports of aluminum and steel and its decision to address china's intellectual property theft by imposing what's known as section 301, tariffs on a bright a chinese imports that represent outside the box thinking. even though they are actually the imposition of the most traditional trade enforcement tool ever, that's the tariffs. if such willingness to support isolations, is at the start of a trade war, is going to hurt americans working families?

we've all heard these allegations and worse on talk shows and read them online but what's the truth? are these tariffs patches because they are opposed by this particular president? are the long overdue? will they help create good paying jobs for u.s. workers? those of the question were going to investigate in today's panel. joining me our four really terrific, terrific panelists. introduce them briefly in alphabetical order and then we'll get down to discussion. first we are joined by respected wto litigator elizabeth boulton. elizabeth currently is consulting counsel, a former assistant general counsel and associate general counsel for the united states trade representative and trade counsel for the ways and means committee of the united states house of representatives. next on my far right, elizabeth drake is a partner at a law firm purchase experience in a broad array of international trade law

matters including section 31 petition and china specific safeguards. she is represented clients in proceedings before the u.s. international trade commission and the court of international trade and previous he worked for the afl-cio. third, we have robert scott on my far left, senior economist and director of trade and manufacturing policy at the economic policy institute. he has published widely in academic journals and in the popular press including in the international review of nuns, the standalone policy review and the "los angeles times." and finally on my knee right where pleased to be joined by kameen thompson, president of the united steelworkers local labor business employees at conshohocken, pennsylvania. kameen start working at the plant 11 years ago making a lot of armor for soldiers in iraq and afghanistan. he is in the impact of global overcapacity in the steel

industry firsthand. so we will begin the panel was h some discussion amongst the panelist and will open up for questions from audience. for anyone interested in tweeting about today's panel you can use #truthintrade. that's #truthintrade son going to start with a question for everyone, and let's say that we just step two to an elevator and will take us about one minute to get to the fore that we're going to. i ask you to come your thoughts on the steel and aluminum tariffs. what's your one minute answer, and rob, you want to start? we can go down the line. >> thank you. i think the steel and aluminum tariffs are a once-in-a-lifetime opportunity to address a critical problem that has been building up for at least the last two decades. and that problem is massive amounts of overcapacity in steel and aluminum, centered in china and a handful of other countries

such as russia, vietnam and korea. these tariffs are an important opportunity to build a wall if you will around that unfairly traded metal that is distorting global trade and it is costing us tens of thousands of jobs in the u.s. >> thanks. spurk-ites are from the the premise that aluminum and steel are vital to our national security. national security is much broader than national defense and includes critical infrastructure, transportation, bridges, food security. these are industries we need to have in the united states, and the question then is how to ensure that these businesses that are being driven out of business through imports are sustained for the long-term so we actually can sustain our national security. >> thanks. >> i will say that it's for our national security. my plant makes the humvee, the mraps for the dod, job creation is a trickle-down effect and what is put up the

one or two you'll used you'll s that can create of the jobs in is to industry and that's a fact. it's part of our national security and it's part of job creation. >> thanks. >> abbasid these tariffs are long overdue. when china join the wto in 2000 what anyone predicted that they would slowly become a market economy and play by the rules, and exactly the opposite has happened. they are steel capacity has quadrupled since that time driven by nonmarket economy policies, that's completely distorted china's market for global markets given the scope and scale of the problem. we've tried everything else. we tried dialogue. with try traditional trade remedy tools. we tried devotee of challenges in the problem just gets worse and worse. so it requires a global solution for the sake of her own industry at own national security but hopefully we will get the community addressing this problem before it gets worse. >> thanks. there seems to be pretty

unanimous thoughts on this particular panel that the steel and aluminum tariffs are good, but let's get into it a a litte bit more. we heard about china cheating at the debbie tl. we heard about jobs having them down to effect on other jobs in the steel industry a little bit of infrastructure food security but we know we've also heard that tariffs generally are bad. there are like a dirty word and we've heard a lot of fear mongering about what could be the unintended, negative consequences on our economy of these tariffs. i'd like to open it to anybody on the panel to say what you think really the impact of these tariffs are going to be on our economy? is it going to be a big personal impact and will it be more positive or more negative? and could you explain why, for somebody who is not really familiar with the idea of tariffs but it's just a lot about how they're essentially a dirty word?

>> i think the steel tariffs could be beneficial to the domestic economy and the right. by right, i mean in a way that encourages other countries run will to coordinate as was suggested in targeting countries like china and russia and vietnam that are generating this excess capacity, distorting world markets and costing us jobs. i think we need to encourage of those countries to eliminate that excess capacity in order to rebalance trade. if we don't, it's not just a question of the jobs at stake in the steel and aluminum industry. these metals are critical for the production of hundreds, thousands of other products, downstream products ranging from auto parts to washing machines to windmills to aircraft parts. all of those jobs are at risk if we continue to allow china and

russia in these other countries to produce this metal at deeply subsidized prices. that's part of what is at risk. >> there's anyone want to add to that? >> i will say as for our readily consumer who i deal with on a regular basis, we don't go out and buy steel by the time. we don't go out like we buy like cheese, you know. so for a readily consumer to say it's going to go up, yes, steel is going to go up in prices because you're getting a better made products instead instead of a product that's made overseas. bringing capacity that is key as a trickle-down effect to create other jobs. you need to support the dated to say what's going to go up? because it steel went up, then that means that the cost of maybe auto maker. but see, since i would say since 2008 steel has been down. so when that case then the steel is done in the car prices should be done.

still fluctuates up, still fluctuates them. car prices still say the same. so the car prices are still going to be $30,000. you're not going to get a discount price on the car. you have to show data to show what's going to go up and what's not going to go up. because the regular consumer is not going out and buying steel by the time. >> you've made a really important point here just because the price that the manufacturers of paying for their input go stand, we as consumers don't always see that in the price of the goods. similarly if the price of inputs go up, it depends on whole lot of things, the market power of the particular manufacturer, the shape of the demand curve, all this esoteric economics to the folks don't need to know about, but they do need to know that just because the price of an input goes up doesn't necessarily translate into widespread inflation. >> if i could just add to that. the price of aluminum dropped between 2011-2016 by 30%.

that was not because the fundamentals. it was because of excess capacity. we have a situation where american producers are subject to profitability constraints that foreign consumers are not subject to. a lot of the discussion people glibly say that american producers are not competitive. that's not the case. we are just required to be profitable. let's put these tariffs in context and put the price in context. the price of an unnaturally deflated for many years in the tariffs are one way to try to get the price back to where it was even before the financial crisis. that's exactly right. the question is what are you buying for the additional cost? you are paying interest in what you're buying is a bible of the domestic steel industry and the aluminum industry. if you are prices to be at a rational level to allow producers to generate a return to be sustainable, the whole impetus for the different levels recommended by the commerce department was allowing the steel industry at least in the case is due to return to 80%

capacity of utilization which is what's needed for them to be sustainable. that sort of the trade-off. that's what you're buying with the additional tariffs. if you don't do that the conclusion with it are not able to reach this capacity utilization levels you are simply in a downward spiral. we that ten plants close and thousands of people lose their job. okay, i really could play. i want to go back to something rob said when he started off the answer to that question. talking about the importance of these particular tariffs and being promoted and a coordinated way and a strategic way and talked about you could get them right or you could get them wrong. one of the tanks that we keep hearing is will be the start of a trade war. i know president trumka here at the afl-cio set if i verbally call the imposition of the --

i'd like to hear from the panelists. you think that we are already in a trade war? if so, who started it and who's winning and who's losing? spirit i'll jump in. i do great the rhetoric is completely overblown, this section of the law. there's been 26 investigation over the years and the whole world didn't fall apart. they're been numerous voluntary restraint agreements that been reached over the years in various sectors including steel and that's what we're saying with korea. everyone just needs to calm down and take deep breath and just realize that this can be a very important tool to get into a more sustainable, rational road for the steel and aluminum industry. to the extent there are distortions and conflicts, in my view that really started with china's own drive to build up

its steel industry at any cost without any rational demand to support the amount the rebuilding. they have excess capacity that are total capacity. it's completely irrational. for years and years and years even at the highest level of the chinese government they said we would do something about it and you just see the capacity go up and up and up. unless something dramatic is that i deny you can expect you're going to get different results doing the same thing over and over again. >> i will say we are at war. we are at war on american jobs. just to think that china can produce more steel in one month than the u.s. can in one year is phenomenal. something that's unheard of and that's an attack on american jobs. so we are at work but it's not a trade war. it's a war on american jobs being lost. that's something that we have to take care of here with these tariffs that are being put in place. >> thank you.

great point. for ribs of the audience, again the microphones in front of you are like so please keep in a clicking or wrestling of papers to a minimum. that will help with our sound quality. thanks. beth, i want to go back to comment about national security. we've heard a little bit about some people questioning whether the steel and aluminum tears are legitimately related to national security and focusing, this is just a front for protectionism. can you tell us a little bit more about why steel and particularly aluminum are ready to national security and a little bit of history maybe about what a section 232 tariffs is? >> why do we start with what section 232 does? it was first enacted by caucus in 1955. we cite the statute now that's 1962. support remember that congress did this just eight years after we signed the gap. congress was clearly aware to sign onto our debt obligations was going to some ramifications

for our ability to protect our national security. >> what's the gap. >> the general agreement on tariffs and trade, trade agreement signed in 1947 1947 t was the precursor to the world trade organization that we have today. so that's a little bit of the history of section 232. it's important to recognize that the patriot act placeable in all of this and that after 9/11 congress was extremely worried that we didn't have a way of planning for the protection of our critical infrastructure. that was included in the patriot act which distinguishes between national security and national defense. i say all of this because when general mattis memo was released in national defense only did a certain percentage of aluminum and steel in order to support his needs, that was taken as a proxy for the fact that this is not a national security issue. in fact, national defense is a subset of national security. cbp, customs and border

protection, has been charged with developing the framework for critical infrastructure and for identifying the critical sectors that are elements of our critical infrastructure, and it did designate aluminum and steel as vertical components as being able to sustain our critical infrastructure. >> elizabeth, just continue on this theme up of 232 tariffs, e been hearing a lot that they are controversial, rarely used. can you talk about that of the? >> they are relatively rarely use. they have been used in the past. i honestly think a lot of the controversy around these tariffs doesn't have as much to do with the tariffs as with the atmospherics and the personalities that are associated with them. i think that a more calm discussion that action looked at the merits and understood that e background and the reasoning. there could be a lot more room for agreement that something like this was needed to address a problem that has been basically an addressable up until now.

i completely agree with beth on the importance of understanding national security broadly, not just what the department of defense needs but what you need for roads, bridges, nuclear power plants, medication, energy, et cetera. there was a court challenge to the 232 what he said this is for nationals could become this is for economic security. the judge rightly said i've got limited ability to review this but to wonder 32 excelsis economic security is a part of national security. so this clandestine basis and is planning a finding that is essential for national security. it was interesting to see a judge on the court reach the same conclusion as others that have looked at it more closely. >> i'm glad you brought that up. rob, china seems to be a particular problem in steel and aluminum which is also mentioned russia and vietnam. so why are the steel and aluminum tariffs not just on those three countries? why are they burdening other

trading partners? >> two reasons. first, if we just put tariffs on those countries it would be far too easy for china and russia and vietnam to export their goods to third countries such as japan or korea, or even canada, and then simply transshipped them, move them from those country directly to the united states. we want to block off that option. i think there is a second and even more important reason, which is that we want to provide incentives for other countries to join us in circling the wagons, , building a wall around the unfairly traded metal. this is the only way which we going to i think be able to remove that excess capacity from the world market. if we make it impossible for these countries to export their unfairly priced metal to the

rest of the world. this is in part because i'm very concerned about the ability of let's say china to export its steel to korea, third country, which transforms an enormous amount of metal into cars, and korean cars are now i think the third-largest source of imports, of motor vehicles, and the united states. much of those vehicles are made with subsidized steel from china. we are not allowed to impose duties on those cars because of the use of unsubsidized steel pixel even though korea in this case has agreed to a tariff on exports of steel for the u.s., i'm sorry, a quota, reducing its exports of its own steel the u.s. by 30%, we said nothing in that agreement about korea's ability to use subsidized steel from john and his other countries i mentioned.

i think the agreement is a good place to start. i don't think it's, we could've achieved with that. >> thanks. that's an important point. before opening up questions to the audience, i've got more but i like to get some audience participation, kameen, i want to come back year and make this ae more concrete and a little less abstract. we know that there were layoffs announced last fall before the announcement of the tariffs after plant. and can you talk about what that really does to the members of your local and what you are expensing, and how maybe things are different or still the same after plant, given the recent tariff announcement? >> the plant is right outside of philadelphia and we were one of the main producers of alloys military steel. back in 2005 at the height of around the war, we had around

400-425 members, but employees, at the plant. today we only have barely 200. in august we were going to be going down to 71. so this is what not having tariffs in place due. we had a bridge yard that was adjacent to our plant dedicated to bridge steel. that is closed in the last two years because that industry and those orders are not there due to not having tariffs in place. so this is what happens when you don't have tariffs in place. you are losing jobs, closing parts of your plant down. my plant, if you want to talk about national security, was one of the main producers for the military steel. back in 2005 to around 2009, we were the only plant that made any money for the company based on the military that we had

coming through to the plant. we turned on a dime to actually support the military and the military vehicles in our mrap vehicle program. this program is based on trying to send steel over to afghanistan to reinforce the vehicles because the vehicles that they had was not being, it was being destroyed from bombs and guns and those nature that was going on. .. we are the poster child of not having tariffs in place. and it really just took what we had in a plant and just took it

down to basically nothing. you know, you go from 400 to 71 people and that can even get even lower based on the company and their plan. to just make us a heat treat facility. right now, there's not another plant out there that can produce steel the way we can in the military alloy that we can and make it the strength that we can. so, it's not a lot of industries out there that can compete with conshohocken plant because this is what our bread and butter was for so many years. >> thank you. >> just add a footnote to kameen mentioned and you mentioned about the bridge building unit. this was a key issue raised in 232 hearings, one of the, i think, managers of the bridge building association mentioned that one of the things that they're challenged with is bridge components that are being imported from mexico, they're being made out of

chinese steel. subsidized steel so, again, this is another illustration the way these unfairly traded products are really filtering through global and having a negative impact on a wide range of products in the u.s. >> i guess another point i want to make is if this plant, which is my plant, is going down to 71 and possibly could be closing in the next year or two, where would we get the steel from? who will we rely on to give us steel for the u.s. military? i mean, i have the facts to say we've produced tons of steel and those are facts i'm not just throwing out. national security will be affected if we don't have this plant in particular, to make the steel because if we had to rely on another country, we may be in some trouble. >> that's really a great point

and that gets back to the question of the fact that 232 is a really important section of the trade law and it's not just a front to address dumping or other things, it's actually really important to all of us. so, at this point i'd like to open it up to questions from the audience, just raise your hand if you have a question, i'll call on you. . >> and i have a question, there have been reports since tariffs were announced and jobs are improving. does that have an effect on your plant? >> not on our plant. those are carbon plants. there's more market for carbon and wire rod and aluminum. we're in a specialty market and there's not a lot of specialty customers out there besides the biggest one is the dod. so, until there is some type of a military spending plan and some type of other plan to

bring down the cost, but ultimately overcapacity has to come down because what's happening is that the service center that we deal with are still overcapacity, and still had overcapacity so that has to come down even more for us to even start trying to think about rehiring. so, there are effects, but it's just not affecting us at this time. >> will? >> thank you so much for having us. and mentioning that the coordinated or process that she hopes will result in the final version of the steel and aluminum tariffs. first of all, is it a coordinated process so far or are there risks about the exemptions and exclusions that the administration and other companies are talking about? how do you perceive that fight going on now? and also, second part is if

there are exemptions and exclusions and sort of end up in a place where a lot of interests are fighting over particular steel and aluminum products and the real beneficiaries to those might not be mr. thompson, but might be the very interests in law firms and lobbyists who are fighting over those. >> so, on the first question-- that's a good question i think that rob had mentioned that ideally this results in coordinated action by all major markets to eliminate that excess capacity and so we've seen the eu, for example, being temporarily has an exclusion and at the same time the announcement that they're now starting a steel safeguard investigation, so that that could be one element of the solution. the canadians as part of their exclusion developed a canadian steel border team or something of that nature where industry and government officials are getting together to try to make

sure that they didn't become a conduit for dumped or subsidized or overcapacity flowing into the u.s. in return for them getting an exclusion. so, i think that that is an element of what they're trying to build into these countries, specific exclusions is that they also need to take some action to create some more coordinated global approach to basically squeeze out opportunities for this overcapacity to disrupt other markets around the world. and on the exemptions process, that's just started. there have been something like a thousand requests filed and only a handful of them have actually been released. they're very, very specific in terms of specific widths and lengths and chemical content and what have you. but part of it, they do need to identify whether or not there's any domestic source and then there's an option for domestic producers or others to object to any requests that's made. so, i think it's too early to say how that's going to shake

out. i've been talking to people who were part of the process doing the 201 safeguard. back in 2001, and they defined those exemptions pretty narrowly and based on is there domestic capacity or not and i think that's a legitimate basis to try and fine tune things and shouldn't be the, you know, a way to get some shenanigans or to weaken that overall relief because the relief is based on helping the domestic industry. >> dr. roth, did you want to espouse on that? >> i'll satisy one quick thing. we're being vigilant about the number of exclusions. you've got to take a look at market for the smelters to restart and have long-term viabili viability. we want to make sure it's not just on open season in the first place. >> and there's a question.

>> senator sherrod brown, made points to steel trade similar to what you in the panel have made and he also said -- but i wish that president trump wouldn't use the word trade war when he talks about this. to what point is the administration sort of stepping on itself or undermining its on effort with some of the rhetoric that the president uses in relation to some of this. >> anyone? >> i think that the administration really prefers to make headlines and i think that they prefer bombbast over progress and that's part of the problem and seem to be shooting themselves and in fact, each other as they're making policy. one day we're making good policy on steel and the next day they announce they're suddenly going to enter into tpt negotiations which the

president opposed and part of the reason he was elected because he opposed that agreement. and on friday, the treasury announced in their semi annual exchange report they were not finding any countries guilty of currency manipulation, something we haven't talked about. that's the most important determinate of whether or not the u.s. has an improving trade balance, whether or not we have an appropriately valued exchange rate and china and other countries have been manipulating their currencies for years. this is the singlemost important reason why we have large trade deficits. and so, this administration has no trade strategy for dealing with those issues. they engage in what i call trade policy by press release. >> i think the -- i'm sorry, go ahead. >> one of the benefits, i suppose, of the way the president is talking about this issue is that it is focusing the mind. i think we've always had this

idea that an unless a fairer approach on trade, this is start to go focus people on what exactly state capital iism and when you link it to the china 2025 strategy and even people like senator cornyn, even if you wouldn't frame it that way, i think that maybe it's not unhealthy to discuss whether we are responding to a trade war. >> and you know, obviously everyone can have their criticisms how things are rolled out or advertised or described, but i think that if you look at the work that was done and if you look at commerce's report on the 232, if you look at ustr's report on china's compliance with. there's a lot of substance

there, they are very, very good and they're rejecting the laissez faire conventional wisdom what the party is saying for 20 years. saying no, the system is not working and we need to do something about it. i get frustrated sometimes that people don't look at substance because it's easy to say that the rhetoric is silly or, you know, too bombastic and tar everything that's done with the rhetoric instead of understanding that there's actually some really good work being done here and it's about time to challenge the way things were done previously. so, that's kind of my hesitation that i have all the time. >> okay. [inaudible] >> you said a quota on steel, lacks detail on the origin on the steel. could you elaborate for all of

you, could you perhaps describe how i think the administration should administer country exclusions? >> yes, thank you. as i understand it, the quota is simply a limit on total korean exports to the united states, but without regard to the origin of the steel. korea is the single largest importer of chinese steel according to statistics from the u.n. i've used the u.n. data and tracked this and it's been in some of the reports i've done. as i have said and i wrote this in a number of commentaries while the tariffs were deeb debated. i think that they should have encouraged other countries not only to restrain exports from the u.s., but imports of unfairly traded products. and i think the ideal way to do that would have been to impose

tariffs on imports from china to raise the price of those imports to a fairly traded value. so, that they could -- you could remove them from world markets, at least from the korean market and i think if you look at the-- and i published one op-ed on this in the u.s. newspaper, i think early in april and quoted leo girard. he said something, i think, fairly similar in response to the initial announcement of the potus, he wanted canada exempted, but only if canada agreed to participate in further restraints of unfairly traded products, so, i think he had the same idea in mind as i read it. >> anybody else want to add to that? >> okay. i would just add, i think that what we're seeing about the rollout of tariffs is showing

one of the weakness s of the world trade organization, it's not really structured to address issues of overcapacitiment it's not really structured to get to the issues of how do we get countries that are similarly being harmed by overcapacity in steel and aluminum to work together to address those issues in coordination. so, we're seeing some of at that coordination happening now, as elizabeth was talking about with the eu, doing a safeguards investigation, but it really is showing that we need, as rob was saying, a comprehensive approach to trade strategy. we started with good tactics with these particular tariffs that we're talking about today, but what we need is comprehensive trade reform, that means reform at wto, reform in nafta and other trade policies and our overall, what's our domestic policy and how does that help achieve the

goals we want of good jobs and good wages and how does it work together with the trade strategy to do that and not just be a source for outsourcing of jobs and exploitation and abuse of workers overseas. mark, did you have a question? >> yes, mark from press associates union news and my question for mr. thompson. you have been talking about the practical effects, but before we get to that, you said that the competitors for your specialty and more than the general overcapacity. do you know how much more. >> i don't know how much more, but i know that the service center that we're still trying to get that overcapacity out before they can start ordering from us. >> okay. now, that -- back to what's happened to your members. you used to have 450 and now 200 and may have 71 is by august. i'm sure you have been talking to, you know, the men and women

who have been laid off since then. what's it been like for them? >> it's kind of heartbreaking, but because most of our members are veterans, you've got members, my members, that's been there for 25 years ready to lose their job. that's 25 years of not being in the work force. i'm setting up all types of programs for them to be reacclimated to finding a job, what's out there as far as computer classes, knowing how to conduct an interview, this is what i'm dealing with. you have guys in their 50's that's not ready to retire, but, or have kind of older, you know, in the older in age where they're not familiar with the new way of how to go on-line and put an application rather

than just walk up and get a paper application. so, it's been very hard. it's just been trying to get some politicians to understand what is going on and i have been in good support from brendan boyle who is in my district so he's been very helpful and his team has been helpful trying to give assistance to veterans who are going to be affected in my plant. going through unemployment. we have a program that i've filed for that is for trade cases and plants that are being affected with trade so that's been very helpful, trying to get our members acclimated back into a trade to help with schooling. those type of situations that they're in, as far as financially. the usw has been very helpful

in all that they can do, reaching out. so, it's not been a good feeling. it's not been a good situation, especially now since it's going to be more of our older members that's going to be affected than our younger members, in a worse way. because our younger members are affected, also, but more acclimated to the work force being out of work for a couple of years, instead of 25 years. it's a difference. >> yeah, thanks. and for our folks who are watching, taa trade adjustment program that helps workers who lost their jobs if they can demonstrate that they lost their jobs due to trade policies. so are there more questions from the audience at this point? tom. >> to the panel, what's behind chinese overcapacity? is it a concerted effort?

how do they do it? >> please, go ahead. >> overcapacity is a problem in the steel industry around the world as every country wants to have its own steel industry, right, and promote it, you have good jobs, way to gain access to technology, something very important to national security so it's not unusual that the steel industry over years goes through cycles of overcapacity and having to reduce capacity. what's different about china is just the scale is completely off the charts of what we've seen before, and i think a lot of that has to do not just with central government policies in terms of subsidies, state-owned banks at below market rates, provision of electricity and labor and land and other inputs at below market rates, but also at the provincial and local level, every province, every region wants its own steel plant. so, some of it's coordinated and some is a failure of

coordination, and so, that's why you have this irrational situation where every single province or region is creating its own steel industry, even though they're far, far above any capacity they could possibly justify, so, there is a lot of complicated history to it. there's a lot at the central government and china can do. they come out with announcements every year what they're going to do and we haven't seen the execution on the ground because these are jobs. when you're in the chinese communist party you don't want to create a big wave of unemployment, right? so they export that excess capacity and not unemployment to other countries, where we work on more of a market basis and that's the challenge that we're facing. >> just add a couple of points. china consciously set out to build the largest steel in the worltd. world.

they were producing 100 million tons a year and so was the united states and they now have the capacity to produce 16 times that, 1.6 billion tons of steel and china is the biggest exporter of steel in the world and yet, very few of those exports come directly to the united states because our trade bars have been very effective at taking unfairly traded steel out of our market, but that's part of the reason why it's showing up in places like korea and japan. they're willing to import that dumped and subsidized steel, turn it into downstream products and strhip the downstream products to us, and it's not just about trade in steel and aluminum. and the other point i would make about the chinese is that they are consciously attempting to-- this was a result of a five-year plan and they have new five-year plans every five

years and plan to take them over. china has a very effective state capitalist system. it's run in beijing. yes, there are provincial problems and state government problems. if china wanted to reduce excess capacity they could tomorrow. this is what they do. they could threaten to shoot people who don't close their plants and it's very effective and they haven't done it and i'm sorry to be blunt, but that is the nature of the system. so, chinese wants to do and this the last point i'll make, even though china is a huge exporter it consumes 86% of the steel it produces. so, most of what they produce is turned into downstream products as i said, wind mills, washing machines, auto parts, aircraft parts, these are things are giving to the rest of the world, with dumps and subsidized steel and that's what they use not only to conquer world markets, but high added industrial commodities and that's why it's so

important to cut this out at the root of the problem. >> so, folks are living in a community where maybe in the past 10, 15 years they've seen job losses and washing machine parts and aerospace and other things you're talking about, that's potentially related to chinese overcapacity in steel even though they might not know that that's one of the sources of the problem, is that right? >> absolutely. china is a the largest exporter of products in the world. and half our trade deficit and manufactured goods and many of the parts go to other countries and come to us in the form of imported cars from korea and japan. so china has a very impact on a distorted world trade. >> thanks so much and i would just add to that question, just this question you asked about china workers and part of the free trade myth that sometimes, you know, expanded upon around

washington d.c., if we just trade a lot, we'll get rich and if we just get rich, workers are going to be better off because somehow workers are going to automatically share in whatever gains go to the whole economy. what we found out is that it doesn't really work that way and there are a lot of us in the labor movement saying that all along, that this isn't automatic, workers sharing in the gains of the economy has to be a deliberate policy and labor unions are a key part of that policy. we play a really important role, but it really does get at this question of linking and making sure that we're coordinating trade policy with domestic economic policy because the u.s. does see growth in our economy every year, but workers aren't getting a fair share of that growth and that's not just here, that's in china, that's in mexico, that's in europe, that's in all of these countries that we trade with, so it's one of the problems that we really need to get at.

are there more questions from the audience? okay, i have just a couple more questions for that panel before we let you go. i wanted to get at-- we were talking about before the panel these questions that we keep hearing that farmers in the u.s. are hardest hit by potential retaliatory tariffs by china and others. i wondered how you would respond to that? do we expect to see a major downside in the u.s. agriculture industry and how can we work to make sure that, you know, it's not just a couple of particular states that are harmed and then the u.s. actually doesn't effectively follow through on trade policy. >> beth, do you want it talk about that a little bit? >> i guess maybe i'd step back a little bit. i think there's been, through our trade policy, a tension

created between the agriculture sector and the manufacturing sector and as i said, i think that's been created by our trade policy. and i was a lawyer for the agreements we did between 2003 and 2009. if you look at the agriculture rules of origin, they're really strict. so it's not a big surprise that our farmers benefit from trade agreements because we design the rules to make sure that they actually benefitted. if you compare them to the manufacturing rules of origin, we actually allot -- allow a lot of that stuff to be off shore. when we try to shore up the manufacturing sector the farmers are being hurt because the trade policy has been so beneficial for them. are we out of this? i'm not sure i have the answer to that, but in terms of why we are where we are, why our trading partners threatening our farmers because of manufacturers, i think that's how we ended up there. >> thank you very much. >> just two points. >> yes. >> whether or not farmers are

hurt are a policy choice. we export soy beans to china and u.s. have policies, they could buy the soy beans and put them in warehouses for later. and that's a management problem. >> and remind me of things in the press where folks and wall street their hair is on fire about these tariffs. it's terrible, the worst thing in the world, it's going to start a trade war and i think, to me, part of what they're saying is, we've had a lot of benefits from u.s. trade policy and other people have been hurt and we kind of like it that way. we want to keep getting the benefits that we get and you know, the people that have been getting hurt cope getting hurt and it really doesn't seem to be a very thoughtful policy about how do we say, well, if trade does benefit everybody, how do we write the rules so that trade really does benefit everybody. so that's our talking point and it's a reality.

and it means we have to change the rules and the status quo has to change. but i'd like to go back to one of the things we've visited already about this idea of tariffs being attack particular and not a complete strategy and this idea of coordination and coordinating, comprehensive trade reform with others, but also, how are we making sure that our trade and domestic policies work together. and i'd like to ask everyone on the panel, what else would you like to see this administration do? we've heard that you agree with the steel and aluminum tariffs. what else do they need to do perhaps part of a more comprehensive trade strategy or individual tactics, whatever you want to talk about that needs to help next, that needs to happen to make sure that we're moving in the right direction? and anybody can start. >> i guess a couple of things i would mention, first of all, would be coordination. i think the agreement with korea is a good sign. the steps that canada is taking

steps in import in their country are a good sign. the tariffs are a little match that lights the fire that get these countries to wake up and realize we've had enough conference abouts this and published enough papers and let's do something and fix this problem. in terms of domestic policy it would be wonderful to see an actual infrastructure program with actual spending to upgrade our infrastructure. that would also help the domestic industry and help workers action on currency as rob already mentioned, as something that would be great. and then as you were saying celeste. bilaterally, regionnally, globally and you see some inklings of that. >> you can watch this entire event on-line. we are going to leave the last few minutes and the senate is resuming debates, disapproving

a ruling regarding auto financing and minorities. and then another vote for carlos muniz. and senators considering a clean water bill tied to a coast guard reauthorization bill and a new nafta administrator. this is live coverage of the u.s. senate on c-span2.