By William Mauldin and Ben Leubsdorf
WASHINGTON -- A top Trump trade adviser on Wednesday emphasized
tougher enforcement of existing rules as a way to confront China
and other countries, reassuring some lawmakers worried by
President-elect Donald Trump's talk of broad tariffs on U.S.
imports.
Wilbur Ross, Mr. Trump's pick for commerce secretary, provided
the deepest view yet of the incoming administration's likely
direction on trade in testimony before the Senate Commerce
Committee, which is considering his nomination.
Mr. Ross's testimony on Wednesday covered a dizzying array of
topics over four hours, reflecting the Commerce Department's myriad
mandates. In addition to its role in trade matters, the agency is
responsible for monitoring the weather, overseeing fisheries,
issuing patents and conducting the decennial census.
Mr. Ross, 79 years old, mentioned tariffs several times in the
hearing, which repeatedly returned to the topic of trade, a
campaign issue that defined the 2016 presidential election and has
ruffled feathers in the business community.
"I think tariffs play a role both as a negotiating tool and if
necessary to punish offenders who don't play by the rules," Mr.
Ross said.
The billionaire private-equity investor didn't threaten the
unilateral, pre-emptive tariffs on U.S. imports from China and
Mexico that Mr. Trump repeatedly warned of during the election.
Such duties would weigh on retailers and boost consumer prices,
economists say. Mr. Trump has played down talk of broad tariffs
since the election, instead focusing on more targeted penalties on
companies that move production offshore. His aides have said
warnings about the possibility of big tariffs are part of
negotiations to get better terms for U.S. exports.
Mr. Ross didn't rule out the use of broad tariffs, but focused
his testimony on the rapid processing of cases against foreign
companies accused of benefiting from subsidies or dumping products
on the U.S. market below their fair value.
The Trump administration would seek to "self-initiate" such
cases, Mr. Ross said, which often lead to punitive tariffs on
particular companies or industries, when it makes sense, rather
than waiting for the affected industries to bring cases against
rivals in China or other countries.
"One of the things that we do need very careful attention to is
more tariff activity, the anti-dumping requirements that we should
impose on the steel industry and on the aluminum industry as well,"
he said, blaming China for excess metals capacity.
Mr. Ross's approach to trade appeared to reassure Republican
lawmakers who have backed freer trade.
"I was comfortable with the way he addressed those issues
today," said Sen. John Thune (R., S.D.), the chairman of the
committee considering Mr. Ross's confirmation and a member of the
Finance Committee, which oversees trade policy. Sen. Thune said he
had been "concerned based on some of the rhetoric that has come out
throughout the course of the campaign and from the incoming
administration on trade issues," including talk about a broad 35%
tariff.
To be sure, Mr. Ross is only one of Mr. Trump's key trade
advisers. His picks for U.S. trade representative -- trade lawyer
Robert Lighthizer -- and the head of a new White House council on
trade -- economist Peter Navarro -- have expressed more hawkish
views on breaking with global trade rules to confront Beijing.
And Mr. Trump's decadeslong criticism of trade policy means he
is likely to play a commanding role from the White House. "The
biggest problem we have is China is so horribly imbalanced in trade
with us," Mr. Trump said in an interview last week. "Everything is
under negotiation. Everything."
Still, Mr. Ross, a business leader and investor seen as close to
Mr. Trump, is set to play a leading role in trade policy that goes
beyond the more limited role commerce secretaries have
traditionally played, advisers say.
Mr. Trump has boasted that the $2.2 trillion in merchandise the
U.S. imports every year gives him leverage to change the behavior
of trading partners by restricting trade.
But Mr. Ross described the U.S. trade relationship more subtly
to Congress: "My mind-set will be that of the world's largest
customer dealing with his vendors," he said in the hearing. "I view
these other countries that we have trade deficits as our
vendors."
The softer message on trade shows how Mr. Trump's team may be
shifting from fiery campaign rhetoric to a more measured position
on key issues, including tariffs, where bold moves from Washington
could lead to politically damaging retaliation from China and other
major trading partners, including through cases at the World Trade
Organization.
The new administration's goal will be to strike more attractive
bilateral trade agreements -- rather than the multilateral affairs
Mr. Obama pursued -- and update the North American Trade Agreement,
or Nafta. "I think all aspects of Nafta will be on the table," he
said.
Mr. Trump has repeatedly vowed to pull the U.S. out of a
proposed Pacific trading bloc that the Obama administration
negotiated with Japan, Canada, Mexico and eight other countries
around the Pacific.
Mr. Ross said Wednesday he initially approved of the
Trans-Pacific Partnership, concluded in October 2015 in Atlanta,
but has since found unacceptable language in the TPP agreement's
thousands of pages.
For example, Mr. Ross wants more enforceability of trade
agreements and stricter standards for the auto industry, meaning
that trading partners would have to source more components for
vehicles within the bloc to get duty-free trade. The so-called
rules of origin may be a focus of Nafta talks in the Trump
administration.
Mr. Ross's extensive business ties and investment holdings --
Forbes magazine has estimated his net worth at $2.5 billion --
present a complicated web of potential conflicts of interest in his
new position. To avoid any impropriety, Mr. Ross has pledged to
resign dozens of positions and divest most of his financial
interests upon confirmation.
A formal ethics agreement released this week set forth
timetables for selling various assets, some of which were described
as illiquid and so could take months to unload. Mr. Ross wrote in
the document that he would act "as promptly as is reasonably
practicable" and ensure all proceeds are reinvested in bland assets
such as Treasury notes.
Mr. Ross's plan won praise Wednesday from Sen. Bill Nelson of
Florida, the Senate Commerce Committee's top Democrat. Agreeing to
"divest the vast majority of your personal holdings" and resign
from boards is "the right thing to do, and it tells me that you are
committed to doing the job the right way by placing the public's
interests ahead of your own," Mr. Nelson said.
Asked about investments he plans to retain and potential
conflicts with his duties as commerce secretary, Mr. Ross said, "I
intend to be quite scrupulous about recusal in any topic where
there's the slightest scintilla of doubt."
The outgoing commerce secretary, Penny Pritzker, also is a
billionaire; her family founded the Hyatt hotel chain. The Senate
easily confirmed her for the job in 2013.
Mr. Nelson said the hearing went smoothly, and Mr. Thune said he
hopes the Senate can move swiftly to confirm Mr. Ross for the
cabinet post.
One revelation at Wednesday's hearing: One of Mr. Ross's
household employees had provided a seemingly valid Social Security
card and driver's license when hired in 2009, but was terminated
recently when Mr. Ross had information for former and current
employees rechecked in preparation for the confirmation
process.
"We did the best that we thought we could do in order to verify
the legality of the employment, and it turns out that was
incorrect," Mr. Ross said. Mr. Thune said Mr. Ross was forthcoming
with the committee and had paid all relevant taxes for the
employee.
--Ian Talley contributed to this article.
Write to William Mauldin at william.mauldin@wsj.com and Ben
Leubsdorf at ben.leubsdorf@wsj.com
(END) Dow Jones Newswires
January 18, 2017 19:23 ET (00:23 GMT)
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