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IBM Executive
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Trade Representative or Government Official
Bloomberg Audio Studios Podcasts Radio News
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Nathan Hager, Bloomberg Host
I'm here with Ambassador Jamieson Greer here on the sidelines of the Aspen Security Forum. Great to have you with us. And you were just on a panel and you said you have an aversion to making news. I'm going to try. Nonetheless, I think there are a lot of folks wondering about Brazil in particular seen as this test case for the Section 301 tariffs statutory deadline is today. Anything that you can say about the process and where it stands and what
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Trade Representative or Government Official
we can expect, it's today. So our section 301 investigations, they are legal investigations. We have two sets of hearings, we do two sets of public comments and we're focused on unfair trading practices by Brazil. So we have to have a legal basis to do this. And there are all kinds of things that Brazil has been doing. They've been censoring our digital tech companies. They've been restricting our access for ethanol to their market. They've been actually engaging in illegal deforestation in the Amazon, which gives them a leg up on all the ag where they displace our ag exports to third countries. So there are a lot of things like this that have been problem for a long time with Brazil. So we've been investigating this. Today we'll announce our final action. I had a conversation, a video conversation with my counterpart Brazil last night. Very cordial. We've had intensive negotiations with them. I think there are still a lot of gaps between us, so we probably have to have some kind of action. But then continued discussions.
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Nathan Hager, Bloomberg Host
I think expectation 25% in line with what you're thinking in terms of the range.
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Trade Representative or Government Official
Well, this is what was proposed by, by my office at the President's direction. So this is, this is probably what we're, what we're looking at. Again, I don't want to get ahead of President. He's, he's signing something today. I just got off the phone with him. And so we'll have more details to come. But again, I just want to emphasize this is these are unfair trading practices that Brazil has had in place against American exporters and workers for many years. The President is trying to resolve these and we're doing it by negotiation where we need to use leverage of tariffs. That's what we're allowed to do with section 301. We'll do that where it's necessary.
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Nathan Hager, Bloomberg Host
Ask about Vietnam as well. I understand representatives of Vietnam have been in Washington meeting with your staff. Any update that you can give us on the status of those negotiations?
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Trade Representative or Government Official
Yes. So we have Vietnamese officials in Washington this week negotiating with all of the trade deals we've done over the past year and a half. All of them have had some core issues, obviously tariffs. We want other countries to take down their tariffs, non tariff barriers where they restrict US exports of goods and services. Also things like economic security where if we're going to be shipping them some of our high tech equipment, they need to align with us on export controls and other things. So this is something we expect from the Vietnamese. And then there are things like just basic standards of intellectual property and other things, the type of things, things that the rules that are, that our companies abide by, we want them to do so as well. So I have a separate investigation with Vietnam involving intellectual property because they've been a bad actor in this space. So these are the types of things, intellectual property, economic security, where we still have open areas of discussion.
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Nathan Hager, Bloomberg Host
Switzerland's top trade diplomat told Bloomberg there's a good chance they'll get to a 15% deal, something stable. Can you confirm that, that negotiations with Switzerland are going well?
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Trade Representative or Government Official
I know, I know that that's what they want. I know that is the, the substance of a framework agreement we agreed to a few months ago. Interesting thing with Switzerland. We've been very concerned with our trade deficit with Switzerland. But over the past six to seven months, the United States is now in surplus with Switzerland in goods. So that's a really positive development. The Swiss are investing here in America. In fact, this week I'm going to visit a plant in Utah where they are producing railway equipment. It's a, it's a Swiss company. They're coming here, they're bringing their apprenticeship program. So the Swiss are doing a lot of the things they need to do to get right with the US Negotiations are still ongoing, so I can't guarantee anything, but there's positive direction there.
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Nathan Hager, Bloomberg Host
Let me ask you about the sanctions bill, newly elevated after the passing of Senator Lindsey Graham. Senator Richard Blumenthal said you've been involved in conversations about that. Is it in a place now that the White House that you and the White House are happy with?
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Trade Representative or Government Official
So there are a lot of elements to this bill. There's a tariff element, there's a sanctions element, all of which are designed to give the President discretion to deploy pressure on Russia and those who are supporting Russia. So we've worked very constructively with the Senate on this. There are a lot of good things to be said about it. I just spoke with the President about it as well. So I think there's an openness there. I think we'll see within the next couple of days, you know, final views from the president on whether he wants to be supportive. I think that we have it in a. In a pretty good place. I think it's meaningful that this is something that Senator Graham and I and Senator Blumenthal and others were working on up until his last days and that that's meaningful as well.
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Nathan Hager, Bloomberg Host
It would give the President the latitude to impose tariffs of up to 100%, as I understand it, on the largest importers of Russian oil. Any indication from him if he's prepared to do that, should this be pass?
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Trade Representative or Government Official
Well, I mean, I think, you know, when I talk to the President about this kind of issue, he wants to be careful about the way he deploys this kind of leverage. Geopolitics are very fragile, and this is something, whether it's a tariff action or sanctions action or anything, it's something that the President thinks about very carefully. He certainly talks to me. He talks to Secretary Besson, Secretary Rubio, Secretary Ludnick. He talks to everybody. He talks to people outside the government. He wants to. He wants to hit the right side spot of putting pressure on countries and putting pressure on Russia without creating more conflict or reducing the likelihood of a peace deal.
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Nathan Hager, Bloomberg Host
The Section 122 tariffs set to expire in just a couple of days, really
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Trade Representative or Government Official
a few days from now, July 20,
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Nathan Hager, Bloomberg Host
July 24, all but certain that the 31 tariffs go into effect after that. Are we looking at perhaps a lapse kind of in coverage?
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Trade Representative or Government Official
I mean, the reality is the Section 301 investigations I'm doing, where we've proposed some tariffs, they're on their own track. We're moving quickly, deliberately, because we want to resolve the unfair trading practices that we're targeting with these investigations. So we're going to do them as soon as we can to get at these practices, you know, whether they're, you know, day before, a day of day after. That's less important to us than making sure we're addressing these unfair trading practices and getting the leverage in place we need to resolve them.
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Nathan Hager, Bloomberg Host
Do you have a timetable for when you're going to bring that report to the president when you might see them enacted?
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Trade Representative or Government Official
Well, we have a couple. Right. So. So we have a section 301 on forced labor targeting countries who don't ban the import of forced labor goods. We do in America. Other countries don't. Some have a law, but they don't necessarily enforce it. So we already have our report out on that and so we can take action, I think fairly quickly on that. Within the next few weeks. We have another investigations targeting a more compact group of countries on structural excess capacity. These are countries who have a, typically have a big trade deficit with the world or a big, sorry, big trade surplus with the world or a big trade surplus with us. Or even if they don't, they may have practices that generate, you know, factories or production that are totally out of whack with global demand. So this is, this is a quite intense project. I have dozens and dozens of attorneys and policy makers working on this to really examine all of these practices. So it takes a little longer time than doing this forced labor one, which is a little bit of a binary where you're looking at, you know, what do they have in place and are they enforcing it? This is more complex.
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Nathan Hager, Bloomberg Host
Does that explain the delay entirely or how long it's taking? Or there's been reports that maybe China, the China issue is complicating it more than it is with the others.
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Trade Representative or Government Official
No, no, I don't think that's the case at all.
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IBM Executive
Right.
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Trade Representative or Government Official
I mean, China is included in this structural excess capacity section 301. The reality is it's a more complex investigation and we have to make sure that we are hitting our milestones. You know, we've received a lot of comments from the public. We have to analyze those. We have to incorporate them into any responsive action we might take. So we're trying to make sure that we're, we're actually living up to the letter of the law and, and the spirit of the law. We want to make sure that we're targeting these, you know, these unfair trading practices that have led to frankly, offshoring in the US and an inability to build new factories. At times when you have other countries that are building factories or they're depressing demand in their own country. This is not how market economics are supposed to work. And it creates a situation where there's not enough incentive to build a new factory in America or to remain employ American workers because we have overcapacity elsewhere. So we want to make sure that, that that capacity is restrained, restricted, or that we mitigate it somehow in our own economy so we can have market incentives to build here and to make here.
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Nathan Hager, Bloomberg Host
I want to ask you about rare earths, and I wonder how you would assess China's performance when it comes to rare earths. And as we get closer to October, do you anticipate that that agreement will be renewed in due course?
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Trade Representative or Government Official
So. So China's compliance with the rare earth elements of our agreements, it's not perfect. I think everyone knows that. You can, you can read that. That being said, we are getting a flow of rare earths. We don't have factories shutting down because they don't have it. But again, we really want to be in a position where we were, you know, in 2024 and 2023, in President Trump's first term, where we had a regular flow of rare earths. We also know that the Chinese, they use rare earths for economic coercion. They did it in 2010 and 2011, they're doing it now. So it's not, it's not necessarily surprising. But we're continuing to, you know, to have some flow. And where we have gaps, where we have problems, the Secretary of the treasury and I, you know, we work with our counterpart in China to try to loosen that flow up. Sometimes we're more successful than others. One important thing is we're moving forward in the US on rare earth production. One of the things I'm doing on my trip out west here, I'm going to Utah to visit a facility where we've already. They've discovered rare earths in the Utah desert and they're refining them and further manufacturing them at a facility in Utah, which is a great development for utility, US national and economic security.
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Nathan Hager, Bloomberg Host
You've got rare earths. There's huge pharmaceutical dependence as well. And I wonder how you're thinking about that, the way that you can kind of curb our reliance on Chinese pharmaceuticals and ingredients.
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Trade Representative or Government Official
Yeah, we think about this a lot. This is, this is really critical because at the end of the day, if somehow you lose access to Chinese inputs, it can be a huge challenge for our own manufacturing base. And some people will say, well, what about India? Fine, but a lot of the inputs that India uses also come China. One great thing that we're seeing as we try to encourage companies to reshore is we actually have commitments from 17 pharmaceutical companies, you know, the most, the largest and the most major pharmaceutical companies, not only to lower prices of medication here in the US pharmaceutical prices have gone down by 2.5%, but they've also agreed to reshore here and to manufacture here. And so we have companies like Eli Lilly and Novartis and others actually pouring concrete and superstructures going up in new facilities in North Carolina and Indiana and Southern California. So this actually for me has been a really bright spot of our efforts to reshore critical production in America in
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Nathan Hager, Bloomberg Host
the trade reps. Glossary Transshipments is a word.
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Trade Representative or Government Official
Yes.
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Nathan Hager, Bloomberg Host
I'm wondering how you are thinking about monitoring and blocking trans shipment when it comes to China.
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Trade Representative or Government Official
So, so it is a, it is a word in our glossary, but it can mean different things. There's kind of like your pure illegal transshipment where something's made in China, they send it to Vietnam and they put a made in Vietnam sticker and send it over. It's just illegal. Right. And that's on Customs and Border Protection to enforce that right to do investigations to identify areas of fraud and go after it. And we, and we're doing that. A day or two ago we had a big announcement with DOJ teaming up with CBP. They've already found $1 billion in customs fraud. And some of that is transshipment. And then you have another issue where you have, you know, country, it's often Asian inputs, China, Vietnam. They go to a third country, maybe Mexico, and they do just enough work where they can legally say this is actually from Mexico, so maybe we should get a better tariff rate than if it were from from China. That's an issue and that's a problem with Mexico. Right now. For example, in some of our discussions, we're talking about rules of origin and saying if you want to get a better deal bringing something in from Mexico or name your country, you have to make sure it's actually has US Content. You have to make sure it actually has, you know, Mexican content or whatever it is. And you have to have that as high as possible to protect against this other type of transshipment, which is a little more difficult to detect.
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Nathan Hager, Bloomberg Host
Last question here. And you're going to have to tell me how you triage your schedule and look at all of these deadlines. But you know, there's a long way to go until this meeting in September when the Chinese president comes to the United States. But let me ask you lastly, sort of how you're thinking about that. You were so integral to conversations that took place in Beijing. What are you expecting deliverables wise to come out of that meeting in Washington in a couple of months?
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Trade Representative or Government Official
Well, the number one deliverable we always have between President Trump and President Xi is to continue the stability of the relationship. Both of these leaders are very committed to having a strong and solid personal relationship. Now, that doesn't mean we don't have issues in the, in the broader relationship. Obviously we do. China is a big challenge for the US In a lot of ways, but we want to make sure we're delivering stability. There's never been a situation where the US Side or even the Chinese side has gone out and said everyone should expect, expect a comprehensive agreement that resolves all issues. Like no one's ever promised that. So that's not what we expect. We will have an opportunity to take stock of Chinese commitments with respect to purchases of soybeans and other agricultural products. We'll take stock on the rare earth issues we decided. So I think it'll be a moment for stock taking, you know, confirming the relationship, making sure that China is complying with what it's agreed to do. That's really what we're looking forward to in this meeting. Get the news you need in just 15 minutes.
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Nathan Hager, Bloomberg Host
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Trade Representative or Government Official
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Nathan Hager, Bloomberg Host
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Trade Representative or Government Official
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Nathan Hager, Bloomberg Host
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