free c-span radio app. and for background on the cases, order the companion book, available for $8.95. and for additional resources, there is a link on our website to the constitution center's interactive constitution. next, a look at the potential impact of new tariffs on imported steel and aluminum that were improved -- network approved president trump and are set to go into effect at the end of the month. the heritage foundation, this is an hour. thank you so much as always for the kind introduction. always, a are here as very timely fashion. here at the heritage ambition and speaking about the issue of session 232.

i am grateful for our panelists to be joining us today. i want to start by setting the stage. we know why we are gathered here today. but the president signed yesterday two proclamations on section 232 to implement tariffs on steel and aluminum. and 25% on steel and 10% on aluminum. the president did say there will be exemptions for canada and mexico. somehow it is tied to their renegotiation of nafta. processed for other countries and allies to seek exemptions through a process that will be determined. i think the first thing to mention here, to set the stage, is to see continuing message here at the heritage foundation about this issue, is that section 232 is not the proper

measure to be utilized in this administration has time and time again said that china is the issue with steel, the russia is the issue with steel. these tariffs will not do much, if anything, to impact our imports from china. 2% of all u.s. steel imports come from china. that is a statistic from 2016. that number has decreased significantly over the last five to six years because of countervailing duties that have all but cut off imports of steel from china. what is really going to happen here, despite the exemptions for canada and mexico, is a lot of impact on our closest trading partners, brazil for example, korea, japan, the list goes on and on.

i think what we -- the purpose at the heritage foundation today is to continue to reiterate the position of this institution on this issue, and on the issue of tariffs overall. the duty of the heritage foundation is to provide a true north for capitol hill in the white house. that true north is driven by our mission to build an america where freedom, opportunity, prosperity, and civil society flourish. economic freedom is a large part of that. with that, i will leave our lovely experts on the panel to discuss the issue further. laura is the president of a trade and economic consulting firm she started in 1991, she

formed it with dr. joseph francois -- did i pronounce that right? [laughter] ms. baughman has been an international economist since 1997. she follows closely the impact of trade programs in the u.s. economy and trade flows of u.s. trading partners. the firm produces detailed economic assessments of these policies and programs based on traditional economic modeling. ms. baughman holds degrees from columbia and georgetown university. following laura, our next panelist will be vanessa sciarra. i'm hitting it with names here. vice president of legal affairs at the foreign trade council, leading u.s. based international enterprises, representing all major sectors of the economy.

her additional experience includes working in the private sector, most recently with a law firm in their washington dc office. her law firm experience included a broad range of international trade matters in the pharmaceutical, medical devices, shipping and trucking sectors. she advised on economic sanctions compliance and anti-dumping and countervailing suit cases. she appeared before the department of commerce, international trade commission, customs and border protection office, and the u.s. trade office of foreign assets control, fda, and consumer protection safety commission. quite the list of accolades. something to aspire to. prior to entering private

practice, ms. sciarra work in washington dc from a position of implementation of the north american free-trade agreement with dispute settlement obligations. she also served as legal counsel during the negotiation of the general agreement on trade in services, and participated in the drafting of the uruguay round implementing bill. she was previously a trial attorney with the u.s. department of justice. in this position, she represented the u.s. government in anti-dumping and countervailing laws. she regularly briefed and argued cases before the u.s. court of international trade, international claims, and appeals to the federal circuit. mr. sciarra earned her bachelor's degree in history

from yale, her masters in economics and j.d. from yale law school. please join me in welcoming our panelists. >> [applause] >> whatever you prefer. ms. baughman: it is a pleasure to be here today to talk to you about this very important trade policy development. every minute it seems to change. hopefully provide some information that is least current -- that is at least current as of today. when i first heard about the potential for these tariffs and the president's motivation for them, i had to agree this was a proposal of his coming from the heart. i can imagine it must be really hard to travel around the midwest and country throughout

the campaign and see so many communities decimated, and unemployed workers and the hardship they are going through. anybody would care about that. anybody would want to do something about that. i genuinely think his motivation is good. the problem of course that he have is there are many reasons someone can lose a job. sometimes it is in poor competition. more often than not, it is shown to be things that don't have anything to do directly with imports. it is technology, productivity changes, changes in the economy, structural changes in the way of product is being received by customers. it's new epa rules on mileage economy -- it is a host of other things that cause an industry's need to shift to changes in consumer demand. it is so much easier for politicians to point to

foreigners as the cause of all of our ills, and import protection as the solution. weight easier than it is to say, i'll take away your technology so you can have a job again. who wants to do that? we learned back when the bush administration put tariffs on imports of steel in 2000 and 2001 -- we learned then that there can be some serious unintended consequences when you attempt to limit imports with a trade barrier. in that case it was tariffs. we worked very closely back then

with a coalition of steel consuming industries, most of them manufacturers. all of them were saying, this is killing us. many were saying, we are laying off workers. it was very clear from that experience that people did lose jobs in other industries when tariffs were put on imports of steel. there are unintended consequences associated with import penetration. when i read the commerce department's 232 reports, on steel in particular, i was impressed in two ways as an economist. first, i saw there really was an effort to do some economic modeling on what the tariffs ought to be, and what effect it would have on producers. they used something called a equilibrium model, which is a fancy complicated model that the international trade commission uses, and a whole host of u.s. government and trade organizations use to analyze the effects of a given trait policy. for example, the effects of a trade agreement with korea, they

used this model. in this case, the instructions were, what should the tariff rate be to get u.s. manufacturers at 30% utilization? they report in the 232 report, these tariffs will reduce imports to allow u.s. production to go up and utilization capacity to hit 80%. bravo. they did some serious thinking on this. i happen to know these models generate a whole lot of other information. what is the effect of this tariffs on gdp? what is the impact on prices? what is the impact on other sectors of the economy, not just the steel industry? i was looking for information. that was not there. alarm bells went off that the president was not resented -- was not presented with the full

picture. yes, it would save steel jobs, but the cost, if any, was not in the report. there is no information in the report about what effect the tariffs would have on jobs. we thought we need to get this information to the white house before he makes a decision. it is important to have the full picture of what these tariffs could do. we used the same model that the commerce department used. we imposed tariffs on imports of 25% and 10%, steel and aluminum. we model calculated the full range of the effects. we drilled down to look at the job effects, not just on the steel industry, where indeed we found there would be increases in employment.

33,000 jobs would be gained in the steel and aluminum industry combined. we also found a whole heck of a lot of other jobs would be lost. as costs go up, steel consuming industries get less competitive. they have to cut costs somewhere to stay competitive. they might cut wages. they might reduce investment. they might cut workers. so there is a range of things they can do to try to stay competitive. all these things we know they tried to do back in 2001. job losses are one of those effects. the models told us there would be nearly 13,000 jobs lost in fabricating industries, 5000 lost in the motor vehicle sector, another 2000 and other transportation sectors.

on match for manufacturing as a whole, -3000 jobs. that includes the pluses to the steel industry and minuses to other industries. it is a net hit to manufacturing. it does not stop there. this steel tax has ramifications for instruction. workers do not go out to dinners anymore. service sectors have to retrench a little. they feel the negative impact. overall, the model is telling us we are looking at 179,000 job losses. we came up with a net loss of 146,000 jobs. we wrote it up real quick.

our membership is not represent any of this deal and aluminum producers, so we as a convener of many companies who are using steel and aluminum in the industry. we were approached by many of our members and we recently formed an alliance that is composed of two categories, basically, steel and aluminum consuming industries. also, parties that would be hurt or the retaliation. we will talk about that in a minute. in the study, she is very clear, they did not model the effects

of the retaliation in their study, so we can talk about that a little bit. history teaches us that the primary sector that feels the pinch of retaliation is agriculture. we have a lot of agricultural, ready and associations in our alliance. the alliance -- there are no companies at this point, we thought that was the best way to present our views, composed by those of us who are in the business associations and industries that are represented. what we are doing is working very hard. we hoped to block the tariffs from being enacted, but we lost about battle. but, wars are won by numerous battles.

our ultimate role is to get them to be rolled back. history teaches us -- the bush tariffs were only in effect for 18 months. we are hopeful and we hope it will not be a huge drag our members. in terms of how this tariff looks to us right now, they are worth looking at. i assume everybody has seen the proclamations, they were made public last night at the white house. for those who haven't looked at them, they are worth looking at. there are's all sorts of hidden

information that the president did not articulate when he was doing his overview. points that i would make to make sure that we are on the same page and what is going on, these are tariffs of an indefinite time frame. there is no time limit in the proclamations. there is an undertaking by the president. to look at the effects of the tariffs from time to time, that is the first bit of information. so they could be there for my sometime absent some action by the hill. tha't is the first bit of information. the scope is very broad. if you are interested in understanding the scope on the

second and third pages of the proclamation, there are some numbers that are affected. this is mostly primary but there are some secondary effects. just because of the way aluminum is fabricated. there is some sort of secondary materials that are captured. if you need them for your business or your association, if you need the numbers, that is the second tip that i would leave you with. with respect to canada and mexico, the proclamation says they are being given additional time to explain how they are going to contribute to national security, obviously the rhetoric that is introduced by the administration is that this is tied to the nafta negotiations.

having been in mexico recently i will tell you that things are not going swimmingly well on that. we will see how that lays out in april. there will be around in april, industry capitals in washington hosting. the next round that sort of fits with the 30 day timeframe that we heard, as some sort of implicit timeframe that they are working with, but it is not in the proclamation as being clear. it appears to be part of their thinking. that is also one of the ambassadors thinking with nafta, because they are going to run out of time if they want to submitted for this congress. there is a natural timeframe here at the end of april where

things have to reach a point with nafta. just because of the way the calendar falls this year. i would say, if you are canada and mexico watcher, keep your eye on that bald. mid april to late april. with respect to other allies, it is begging time. the order does not really explain the process i was people can come in and explain how they are going to deal -- offer to assist the administration was dealing with these national security threats area make of that what you will. ambassador light has or will be conducting those investigations.

i suspect that it will not just be security issues on the table. it sounds to me more like -- you have a nice steel industry there, let me tell you how you can make it better. i think our allies are justifiably concerned. we know that australia, the united kingdom, japan, they are the first ones in the door, and they feel like they have the strongest arguments. on the security side. there are products that are not made in this country and could not be made in this country without significant changes to the way that we produce

aluminum. i think those countries are the first three to get in the door and probably the first through that will be prioritized. it is not clear from the order what it will take to get an exemption. an exception is a term applied to countries. the last piece of the order exclusions. if you have any familiarity, this is a process which says my product is not going to be covered by the order. if you think about this process went in 2001, you went in and you claimed what your product was, the new explains why you conduct -- in this case, the order does provide some guidance and says, you will be able to make an argument if the item is not produced in the u.s., either it is in sufficient quality, or it is not reasonably available. also, you will be about to argue specific national security considerations. particularly for the folks in the procurement space of the dod. if you have a product that the u.s. government regularly procures from you, and you want to preserve that. i will tell you, history tells us that the process is not an exact or fast process. i was not doing this in 2001, and i asked how many orders can be as rooted in the said it was over like 100,000 or something. and some are byproducts. that means that there is a process for about. within 10 days, we are some was to get guidance on how the process will run. i told companies, don't expect it to be quick. he will be with a lot of people who will all be rushing in at the them time and you will probably all have to file deposits. you will be putting money in the

table and have to get it back. the government takes your money and says, we will see. it is not particularly a speedy process, so you should advise your supply chain that that is coming. it matters what you get in the door on march 22. on the 23rd you will be paying these duties. there is a push to get contracts that were long-term and the water but as far as we knew none of those have been granted. the window shuts on march 22. there was a push by some people to get a grandfathering for contracts that were long-term, but apparently, as far as we know, those will be granted. so, the window shuts at midnight on march the -- march 22, and then they will be assessing the additional duties the next day. i think the bottom line is a lot of concern among our alliance members and membership. my last point is, what i have learned from talking to members of these alliances, there are a lot of's mall businesses who fabricate with aluminum and metal, a lot. they will not be able to nimbly jump to other sources of supplies. say you are a big beverage manufacturer, or you probably can't jump and make a change. but, if you are a small fabricator in michigan or ohio and use foreign metal because it has been priced attractively to do that, though supply chains are basically going to be cut off 80's tariffs. you will have a hard time jumping to a new source. i was a that unfortunately, in addition to the consumer in fact, it is going to be regressed event hit people who buy food in a low income levels the hardest. people who buy cars, but

unfortunately, small businesses will suffer the most. big companies will be able to do that because their relationships for supply are deeper and they will have more market base relationships with other countries. that gives you basic information. >> i was writing down multiple questions. thank you so much for your comments, they are insightful and the help to get our minds in the realm of not only what happens, but also what are the ramifications. many of those ramifications are still unknown and will remain unknown for some time. as the daughter of a small business owner, my dad went to

school in michigan -- this really hits home for me. it hits home for my family and all the businesses that my dad works with. i think that putting that in the perspective of small to medium-sized businesses, the largest employers are the movers and shakers when it comes to growing the economy and creating jobs. honestly, vanessa, i could listen to you speak all day long. you should come to teach a class at george mason whenever you like. >> i have always wanted to come to [laughter] teach a class, so maybe. >> i'm going to start things off with one technical question. you mention exclusion process and some of the exemption possibilities by america when it comes to not available and reasonable quantity, not made

here -- one thing i noticed missing was price. there is no indication -- correct me if i am wrong -- no indication of this is going to increase the price of your goods by maybe 50% or 60%? works it is not listed in this is going to increase the price. and that will be a huge problem for small businesses, because it will not be easily able to switch their supply. we are also going to suffer in our export ability, if you are making a product in japan and you can make it with cheaper steel than we can, you will be more competitive when you sell it to vietnam or china.

so, we are not only hurting our -- the proclamation did not cover retaliation or export losses for example. you did the math on export losses but not the product losses. >> yes, we did. >> the ability of foreign product will underprice us because it is a very competitive market. you probably know this, one in every four acres of u.s. agriculture products is for export. that is a great concern for people who may be subject to retaliation for example, or even our companies that are having fabricated metals. for them to be able to compete with our foreign competitors. i think the ramifications of this, this is definitely the pebble in the pond that has a lot of ripples. the more you think about it, the more you start to realize how interconnected we are can have

all of these affects across the u.s. and in our markets, where we are competitive and selling the u.s.-produced products. i think that autos are a great example of that. the autos are very price-sensitive. the steel and aluminum that goes into autos will be more expensive and it will make the u.s. production of cars more expensive when we try to sell them abroad. the steel and aluminum that goes into autos will be more expensive and i will make the car is more expensive when they go abroad. they are filling up the middle because they are the center of nafta and now they are going to get hit hard on this as well. every time i hear them talk about it, i realized that they just realize, wow. they feel, why me. there is a lot of concern of how the auto industry will weather this. >> i think, vanessa, you lead to perfectly into my next question. that has to do with the reactions from the

administration on these price increases. i am sure everyone saw this past week, secretary ross on business with his campbell soup can saying, the price of the can will only be increased by about one penny or 1.5 pennies. that is not a big deal, who would not be ok with paying 1.5 cents more? but that adds up. i would like to hear your reaction to how the administration is responding to these price increases. do you feel like they are a little bit out of touch, with what those price increases could be when they add up for americans? i would love to hear your

thoughts. >> i do think that they are a mischaracterization, the real cost of those price increases. when you look at it at the retail level, it looks small for certain products. as i was indicating earlier, most of the job losses that we are seeing are at that middle level of the value chain. it is the company that makes screws and wire and missionary, they are going to see much bigger price increases relative to the can of soup. you are not going to see that because, who goes to ace hardware store to buy a screw? you're not going to buy air conditioning the goes into a construction project. so, those price increases are going to be bigger and it will be hidden from most average

people. the other thing, you may have seen that wilbur ross put out an editorial this morning and one of the things he says is -- all the price increases will not be that big, they will amount to for a car for example, four dollars a month more for the monthly payment of a car. and who wouldn't pay four dollars a month more to save a steel job? well, he does not mention anything about jobs? i would counter that the person who lost his job might have a problem paying four dollars a month more for that car. so, they are ignoring the whole side of the discussion. he ignored it in his report to

the president. it is troubling. >> let me add to laura's story. there are also decisions made everyday by companies about structural changes in the business. for example, if you are beverage manufacturer and you can choose between building a new aluminum canning line which is a pretty big investment or going plastic, there is a point in time we have to make that decision. and you are not dictated by outside forces, your business is growing and you need to bottle more bottles. right? you need to make a decision. you have to make a strategic decision about planning for the future. what do you choose? this is a decision that has an impact on the company for the next five to 10 years. but now, we know that someone may choose elastic over aluminum. that has ramifications all up and down the supply chain. if you choose plastic, your supply sources are going to be different than where you source aluminum jobs. that decision is being made in the context of all of this uncertainty.

business people are rational for the most part, so they will make decisions that they can feel more comfortable. there will be decisions made to delay projects, to choose to go with plastics versus metals, decisions to halt certain construction products. we are hearing about all sorts of deadlines that are being pushed because no one is sure with a -- sure whether they want to purchase aluminum or not. those are decisions that are being made in that strategic sense and we are not capturing that harm as well. he is not recognizing that when he talks about the soup can, he is missing the part of the business where they are basing decisions on market uncertainty. metals are looking less attractive right now, so people are going to have to figure out how to try to hedge for that. >> those are all great points. my last question, then i will open it up to the audience. one thing we have been talking about at the heritage foundation is, what can congress do? i think this is the next question on everyone's mind. why doesn't congress have a role in this process? they essentially wrote

themselves out of the process -- >> they are delegator's. >> they are great delegators. at heritage, ways to reinsert congressional authority. we have been talking about that. on trade, with changing section 302, section 301. senator mike lee has a bill associated with this which would require a joint resolution by congress, if the president wants to increase tariffs. another option we have been discussing here at heritage is appropriations. for the institutions that would actually implement and collect tariffs and prevent them from using funds to do those processes. what do you think about those options? what sorts of other mechanisms do you think that congress has to do more than write a strongly worded letter? vanessa: there has been a strong congressional reaction. interestingly enough, not only

from the republicans come but also from the democrats. senator schumer put up statements -- everyone understands that we have a problem in the structural economy with employment and manufacturing. the overall feeling is that this is not how you were some was to do it. the chinese are not feeling any pain today at all. interestingly enough, they are probably feeling work pain from the tpp announcement yesterday. i would be way more horrid about that than it would you worried about tariffs at the moment. i guess i will quickly run through my thoughts. senator flake introduced a bill. there is another bill in the house. anything that you introduce has to be veto-proof. there has been a lot of discussion on the hill him away from the business community and with people like you all about things that we could do. there was a general recognition that with nafta, that there is a balancing struck between the

congress and the president. president has our on foreign affairs, congress has power on trade. that has always been awkwardly managed. so, i think that the question of what to do is on a lot of minds of a lot of good people. i wish there was a simple way to answer this problem. historically, history tells us that congress is a protector of provincial interest, and the president is usually the visionary. congress tends to be more worried about protecting the

jurisdictions and constituencies and seen as the institution that does that. we may be in a situation historically, where we are flipping that and we have to figure out how to grab some of that power back from the president. it will not go very well with the white house lawyers, but there was definitely discussion on how to do that. i do not think constitutional law professors are any happier. -- two lawyers in a room that have any interest in that, and becomes hours of conversation while our spouses look at us. we have lots of conversation about this all the time. i anchor and anyone who is interested in this field to dive in. creative minds will help us get out of this.

i think there will be hearings. representative kind and meeks and larson just requested -- representative himes and representative meeks and representative larson have requested hearings. i think we may be getting to a flurry of hearings. i would say that that is probably needed. there has been a shocking lack of shareholder and take older discussion between the administration and the business community. there has been a lot of discussion with the unions, and i understand that constituency matters. i applaud the administration on meeting with him, but if you only sit on one side of the table, you only have one view. it has not been a very welcoming administration for meeting with business, and i feel it that is part of the problem. we are not getting to say our peace --piece. they do not talk to us much.

that is another piece. yesterday was the beginning of a long discussion and a lot of, -- get ready for this to be on the front page of the post. it has been on the front page of the post for the past two weeks, it will not go away. north korea will be there, but this is going to be there. the last point i would make is it is really incumbent for all of us to try to stress to the administration that china is a huge problem, i will tell you that when i talk with my business members, every single company will tell you, china is the highest thing on their list in terms of country of concern. both because of steel and aluminum, but also because it is so hard to do business there, even though it is such an attractive market. you want to be there, but you don't want to be there. the trend we are seeing with china is that they are moving back on all the reforms that had said they were going to do. the current administration does not seem to be inclined to

helping the u.s. companies and do business there, so i think we have to figure out how to engage our allies in an effective way. i am afraid, this is not the greatest way to open the door for that discussion, but those of us who are not in government, have a lot of ways to talk to those friends in other cap capitals. we should encourage discussion with the europeans, japanese and australians about how we can constrain the chinese with collective action. it does work overtime with countries who work overtime to constrain bad actors, eventually they are able to do that. i really think that is going to be the key to this. there is a weird collective action in these proclamations. it is like, come in and tell us how you're going to get out of this bad thing we are doing to you. i was thinking about this, and it is kind of an invitation to talk about the solution that is multilateral, but also a weird way to start a conversation, right? i think because of the way countries diplomatically have to

be seen by their domestic side, people are not going to welcome that. when this came out, the individual announcement, we were in mexico. the mexicans looked at us and they were like, what are we going to do now? now there is no private diplomacy, now you are just telling everybody that we have to come in and bag. they are in the middle of a difficult election cycle. -- come in and beg. the conversation is getting drowned out by those who say -- see, they are always going to make us offer. that is the american way, to make their southern partners suffer. -- suffer. my point is to those who engage in these conversations, you are -- you have never been needed more. we have got to engage with our partners. we have to work outside the government, let us do it area let us make this a need, come up with a solution to the chinese problem, as i need among partners, not just a problem. the president says -- i do not

think we can solve this problem just by the u.s. saying that you will be's oh and the chinese will suddenly come to the realization that they are going to fix problems. it is not going to happen. multilateralism works. host: absolutely. anything? [laughter] >> no, i am going to take notes! host: with that, i'm going to open the floor for questions. please wait for the microphone and announce your name and affiliation. please make your question a question. speaker down thank you, my name is brian reilly, from the national taxpayers union. thanks to heritage for having this timely event. i wanted to repeat something you said and make sure i understand

it correctly this is not an. issue where the commerce department proposed tariffs and you went out and ran a model and came up with maybe different results than what they did. if i understand you correctly, they ran the same model, came up with them a result and covered up the parts that they did not like, only telling half the story, or less. those are my words, i am asking if you have a comment on that? vanessa: all that they reported was the effect on this deal in was the effect on this deal industry area and laura: they did not report the effects on everybody else area and we wanted to get that into the discussion. speaker do i am from the pakistani spectator. the question is, many democrats think that this is just a kind

of political stunt, that it will not have any long-term effects. sanctioning these tariffs on european and especially on chinese products -- do you agree that trump is trying to please or appease the people who are diehard fans of him? there is really not much substance, because he is going to say ok, we are taking canada and mexico out, and we are react relaxing -- we are relaxing this tariff on this or that country. i ask because a couple of years ago, dr. ross was invited, -- they are a good couple -- but i know -- wilbur ross is very docile, you feel it he is about to fall asleep while peter navarro would not let you talk. they know these things very well. i don't think he knows that it

is going to make a difference, because at the end, everybody would be happy as long as the people who voted for trump are happy. do you believe that it is just a political game? thank you. guest: all trade is political. trade is highly politicized in this administration. there may be an element of politics, and the deep recesses of their mind, that this is sustainable long-term. you have to work with what you have.

right now, the proclamations says it is effectively indefinite. regardless of this lasts for 12 months are five years, businesses do not make decisions just about tomorrow, they make decisions about six to nine months down the line. so for example, and lauren can tell you more about this, the spot price on steel and aluminum, i do understand that the prices have been trending up for a month now and we can expect that once the tariffs are in place, there's a certain amount of price increase that will happen. sort of like a renter to that will be achieved and captured by those who can benefit from that. economists will tell you that the prices will go up because there is room to do so.

i think that regardless -- the matter how long it lasts, practically speaking, even for these exempt exemptions and inclusion is to be put in place, it is going to take about six months weird that is going to have ramifications. going to have an effect on business people who have to make choices. it is not true that you can just do these things and remove them. even if your ultimate goal is to have a certain amount of political theater, you have an actual impact on businesses and on companies. once a company lays off a worker, i am told it is not just a matter of changing your mind and having the person back area and there are decisions made, and ramifications to that. right? >> the only thing i would add, -- i don't know or ever talk to the president, but everything i read suggest that deep down, he really believes this stuff. it is not politics, to him. >> [inaudible] >> they have a boss who is

demanding action for reasons that he does not think is political. he thinks it is hard that this stuff is horrible and import-protection will fix it. and he has hit her in a barrel -- he has peter navarro telling him yeah, go for it. it makes it complicated and tough to present a rational case to anybody who works for this administration. here is a horrible thing that will happen if you do x. welcome, i have my boss telling me to do x. we are stuck between a rock and a hard place. >> it is difficult to have those conversations. especially with career people because they are being told. our action was, this is where you set this capacity, you work backwards, and you do not look at any of the effects. i do not fault the people who

wrote the report. this is the information i do not want and this is what it should look like -- and that is exactly what the report looked like. it is out of they are not capable people working at the agencies. i am totally in love and i think the people work so hard but i think there is a top-down direction that is not allowing for policy discussion. it is direction that is being top-down, you're going to do it their way that i want it to be done. host: i think we have time for maybe one or two more questions. >> hey, trade policy counsel at the institute. one of the things i have noticed from the white house's rhetoric is that they keep talking about

this issue of chinese friendship and steel. without acknowledging that we gave anti-circumvention tools to the executive branch a couple of years ago. i guess the question that i want to ask is, do we have a sense for how pervasive that issue is? yes, two or 3% of all steel in the u.s. is from china, that is what the figures show from commerce. but do we have a sense on how pervasive this is, trying to skirt anti-dumping duties? >> to those people who don't know what it means, it means when you take chinese steel and you move it to vietnam. you do it in a minor way but just enough to change tariff codes and then you bring it to the u.s. and you avoid tariffs because it is not captured in

those codes. it had seen this. the chinese are very good at this, and very good at telling their affiliates in asian countries, how to do it. the answer is that it is a problem and has been a problem for the steel industry particularly. the aluminum industry has had their mother problems of mexico. i think senator choco office will tell you that they have tried very hard to deal with it. at the end of the day, tracing these commodities is very hard. things don't leave china with a stamp that says, i am chinese steel. the reality is that people want to be evasive and they can find ways to do that. the chinese have developed it into an art form, almost. my comment on that would be that i think that is why some countries will not get exemptions. the administration has been cagey about that, and i don't think those countries want to talk about that, but i think it is ready clear if you follow any

anti-dumping discussions, that there is some sort of entrenchment between korea, taiwan, thailand. those countries will have a hard time arguing their case to the administration, which i think is way career has been quiet over the last 24 hours. other countries such as australia, japan, those in a countries will have a history of having this problem. the administration will say, we believe you and we don't have any evidence of that. the countries who have issues with this are the u.s. steel and aluminum producers. those are not countries that have a history of transshipment problems and they will be able to go in with a straight face, we do not have this is a problem and the immigration will say, we believe you. the country that really keep track of this are the u.s. steel

and aluminum producers. they have people on their staff who look for transshipment. one assumes that information will get frontals of the administration and i'll be on the table when they destined people come in and say, i want an exemption. host: last question there in the back. >> henry hector, retired government. you have not mentioned the recycling industry of aluminum or steel. 30 years ago or so they mentioned that u.s. steel moved overseas or sold out, the recycling would replace the losses that were produced initially, they would be of a to recycle it still. how would this work? would it increase as far as a mother the reduction, or would we still be importing aluminum? i read in the newspaper that aluminum was still being imported. it did not say whether with -- it did not say whether it was aluminum ore, or aluminum products. the number of products produced continues to increase here let alone in china. how about recycling, will this have much impact on the problem and the tariffs?

>> we can do all the questions together. >> and my question would be, is there a potential that this actually could provide some sort of solution, if you look at it from the extreme point of view. is there potential at least for short-term adjustment that could provide him in a fit and stimulus to american industry? >> would you like to talk about recycling, or? works i have talked to a couple of companies who are in the recycling business. the good news is that we are much better country at recycling, we have all sort of learned to recycle. it is not true in every community across america, but certainly in urban areas for

example, and areas where you have densely-populated people with garbage, people have learned to do it. the problem with recycled product is and is not suitable for every use. so, where as you can use it for something, you cannot use it for example to build oil pipelines or electrical grade steel. these are uses that have industrial constraints on it, and recycled product gets impure overtime. i think the reality is that we will still be a net importer of aluminum and is he'll even after the tariffs go into effect. in some cases, the user will pay the premium, they will just say, i can observe the premium, i need the product. and i think because the recycled steel or aluminum is only useful in certain cases, it will not completely erase imports. the other issue you raised -- i think the president does care about these people. i believe there are huge problems in steel country. we need to find ways to help people who do not see that they have options and job

opportunities. find ways to sort of provide a pathway for them. interestingly enough, steel jobs are not as many as you would think. 20 years ago, if you looked at them, they were very labor intensive. you would think about a line of workers, right? the reality is that now, you have one guy at the end of the line who works in a control room. modern steel and aluminum fabrication is done by robots and missionary, where we are all headed in terms of the fabrication area and we would want to be the top companies using technology. so, even though there is an protection provided by the tariffs, the re-investments are

hugely expensive and they are not labor-intensive. relative to what the old steel and aluminum production was like. that is a problem for the aluminum and steel companies, because this reduction will only be two or three years in length, not a lot of production if you are going to build a new 21st century plant. this is not necessarily help them with that problem. it helps them in the short-term, clearly they will get some money out of this because of the right -- the rent issue that we just discussed. whether it will give them enough money to build out another 21st century plant or a smelting operation, that is really competitive with the ones that we see in asia, time will tell. laura did a study in 2002 and you had a real data when you did that study to work with, and it's sad -- this is what happened. i fear that we will be doing a

similar study two years from now, and i feel that the results will be the same. basically, global tariffs as a solution to global structural problems is not the best solution to the problem. it does not make your point in a valid, it just means that we need to come up with better ways to address these problems. we need to be creative people who say, what about this, what about that? go to the white house and press our point. laura: i would just add that we need to be very clear about what the cause of the problem is. it is easy to blame foreigners, but in this instance and in many other instances, that is not the biggest reason why we have unemployment, hollowed out factories, depressions in many common it is in the rust belt. the commerce department announced -- an analysis, as well as ours, showed that as the economy as a whole, it would be a decline in gdp resulting from

the tariffs. wilbur ross acknowledged it, he never put it in writing or anything, but he said it was "negligible." well, it is still negative. there is something wrong with that solution to the problem. and we need to look elsewhere. host: thank you so much. please join me in thanking our fantastic panel on the discussion here today. [laughter] >> c-span come where history unfold still a. in 1979, c-span was created as a public service by america's cable television companies and today, we continue to bring you

unfiltered coverage of congress, the white house, the supreme court and public policy events in washington, d.c. and around the country. c-span is brought you by your cable or satellite provider. coming up on c-span, washington journal is next live with your phone calls and a look at today's headlines. this followed by a senate intelligence hearing on the security clearance process for government employees and contractors. later, the u.n. ambassador nikki haley, charles schumer, and vice president pence speaking at the american israel public affairs he known as a pack. >> coming up, on today's washington journal, robert weibel's from the independent institute talks about the economic outlook in light of the latest jobs report and the trump administration's trade policy. after that, the weekly