Susan Collins Asks Commerce Secretary Howard Lutnick: Where Do ‘We Stand With Canadian Tariffs?’

Forbes Breaking News

During Wednesday’s Senate Appropriations Committee hearing, Sen. Susan Collins (R-ME) questioned Commerce Secretary Howard Lutnick about tariff negotiations with Canada.

Transcript

00:00Mr. Secretary, welcome. It's great to see you here today. It probably won't surprise you given the

00:09many discussions we've had about the lobster industry that I'm going to start with my first

00:17question on that. Maine's lobster industry, as you know, is so important to the economy of Maine.

00:25And to me as well. I love lobster. And I've always known that. And it represents Maine.

00:33It's really an iconic industry for us of hardworking people that sustain many of our coastal

00:41communities. In 2022, the Biden administration proposed regulations that posed a threat to the

00:53very existence of the lobster fishery. If implemented, it would have shut down the lobster

01:01industry. The Maine delegation worked as a team and we were able to successfully block those

01:10regulations and prevent them from going into effect for a period of years. Subsequently,

01:18the Maine Lobstermen Association sued the National Marine Fisheries Services in the Department of

01:31Commerce and overwhelmingly won the case in June of 2023. And I want to read you just a little bit

01:42of what the judge said, what the three court panel said in its decision. It said that the service had

01:53relied upon worst case modeling that was, quote, very likely wrong based on assumptions that the service

02:04conceded that it did not believe were accurate. Projections that were, that are very likely wrong,

02:13obviously are not likely to occur. And what the, what the court found was that the service acted in an arbitrary

02:27and capricious way and blocked the regulations from going forward. But obviously it's costly to go to

02:36court and to do that. So Mr. Secretary, I know there's a new executive order that attempts to establish much

02:46higher standards for scientific research. It emphasizes rigorous evidence-based methodologies to inform

02:57federal regulations. Can you talk to us about how you believe that this new approach to regulation based

03:09in science will help protect the Maine fishing industry and our lobster industry from arbitrary and

03:19capricious regulations as the court found was done in the previous administration.

03:27This administration views the Maine lobster industry as an American treasure and we need to protect

03:34it. And you will see as we do our trade deals, right? They treat the Maine lobster industry horribly.

03:42And in the UK deal, they said, we will invite you to 10 Downing Street and we will have now a lobster dinner.

03:48Okay. So we've opened, for example, the UK to lobster. We think this capricious lack of rigor

03:58in our science has got to end. So the gold standard executive order saying only real science, not opinion-based

04:07science, has to be the rule. So we protect our fishermen, we protect our ranchers, right? These are key

04:15things that this administration is going to drive for us. So I completely agree with you. We will protect

04:21the great Maine lobster industry because it is a treasure for America. Thank you very much, Mr. Secretary.

04:30We've also talked about how integrated the Maine economy is with Canada. And Canada's our closest neighbor,

04:40our dear friend and our largest trading partner. And so I have been very concerned and I know the

04:48department and you personally are working very hard on this issue about tariffs on Canadian products.

04:58Our lobster, our potatoes, our blueberries are largely processed in Canada and then come back

05:09across the border. We have a paper mill in Northern Maine, in Madawaska, Maine, whose sister mill is right

05:19across the river in Canada. The sister mill in Canada produces the pulp that is piped across the river

05:30to the paper mill in Madawaska, Maine. So that's how close the partnership is.

05:37Ninety-five thousand Mainers are not connected to the New England electric grid. They get their electricity

05:48from Canada. I just mentioned these examples. Ninety-five percent of our refined petroleum products come

05:57from Canada. Ninety percent of potash, which is used, the fertilizer for potatoes, comes from Canada.

06:08Just to give you a few examples of how integrated our approach is, could you give me a brief update

06:17on where we stand with Canadian tariffs? Sure. So the overriding principle is USMCA. So if the products

06:27are actually made in Canada and actually made in the United States, they come back and forth,

06:32and it's easy for them to fall under the USMCA. And that has no tariff, no tariff. Things that are

06:40outside of that, where companies chose to be outside of those rules. And those rules, as you know, have been

06:46in place quite a long time. If they're outside of those rules, then they have a tariff on them. They have

06:52the fentanyl tariffs, right? Because we needed to close the border and make sure fentanyl was not coming

06:59into the country. And people say, oh, Canada doesn't do much in fentanyl. But if you look at the fentanyl

07:06rings in Canada, they're often manned by Mexican cartels. So we needed to shut that. And so those

07:14outside of USMCA do pay a tariff, but those inside of USMCA are free of tariff.

07:21Thank you. If you would provide us with a list of which products are under USMCA,

07:30that would be very helpful to us. I believe that a lot of the cases that I've mentioned

07:36will be under the USMCA and thus exempt from the tariff. But it would be good to have some certainty

07:46in that area. So if we could work with you and your staff to try to get a more definitive list,

07:53that would be very helpful. Sure. That primarily comes from USTR,

07:56but I will call them and I will have it to you. No problem. Thank you so much.

08:00Thank you, Mr. Chairman. Chairman Collins, thank you very much. Senator Van Hollen.

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Transcript

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