SENATE FINANCE COMMITTEE
U.S. Trade Representative Nomination Hearing
For questions on the note below, please contact the Delta Strategy Group team.
On October 29, the Senate Finance Committee held a hearing to consider the nominations of:
- Julie Callahan for Chief Agricultural Negotiator, Office of the U.S. Trade Representative, with the rank of Ambassador
- Jeffrey Goettman for Deputy U.S. Trade Representative (Africa, Western Hemisphere, Europe, the Middle East, Environment, Labor, and Industrial Competitiveness), with the Rank of Ambassador
Below is a summary of the hearing prepared by Delta Strategy Group. It includes several high-level takeaways, followed by summaries of opening statements and discussion.
Key Takeaways
- Chairman Crapo (R-ID) highlighted the extent of global tariff and non-tariff barriers faced by U.S. agriculture, highlighting his support for President Trump’s efforts to reduce such trade barriers. He called for Callahan’s commitment to engage with the Committee on addressing trade barriers, alongside Goettman’s commitment to providing business certainty to U.S. companies and helping businesses stay competitive on the global stage through trade policy.
- Senator Grassley (R-IA) cited high input costs and low commodity prices facing U.S. farmers, questioning Callahan about the non-tariff barriers U.S. farmers face in exporting to China, particularly for soybeans, and efforts to ensure China complies with rule-based trade. Callahan stated that China caused unprecedented damage this growing season by not procuring U.S. agricultural goods, but noted recent soybean purchases ahead of the President’s meeting with President Xi. She raised other commodities affected by unjustified Chinese trade barriers, including sorghum and cotton, and stated that China has been weaponizing agriculture.
- Callahan expressed her willingness to engage with China to ensure a transactional relationship, emphasizing the need to reduce over-reliance on China without eliminating the market entirely. She raised how, during the first Trump administration, the U.S. Trade Representative (USTR) provided a report to the President on a weekly basis of China’s purchases under the Phase One agreement. She discussed how, over the last several years, China has not been purchasing U.S. agricultural goods as it should, highlighting her commitment to reversing that trend and rebuilding access to the Chinese market.
- Callahan emphasized how USTR’s efforts in all negotiations and agreements on reciprocal trade are intended to reverse the U.S. agricultural trade deficit, citing how the U.S. went from a $6 billion agricultural trade surplus four years ago to a $34 billion agricultural trade deficit last year. She stated how USTR is in ongoing negotiations for increased and expanded market access with trading partners across the board, and all in efforts to ensure the U.S.’s agricultural trade deficits turn into surpluses. She reiterated USTR’s commitment to U.S. producers having access to markets around the world, ensuring producers have a fair shake and reversing the trend of being outcompeted by imports.
- Senator Marshall (R-KS) highlighted the importance of the sorghum market, including with China and Mexico, alongside opportunities for value-added agricultural products like turning sorghum into biofuels within U.S. trade agreements. He emphasized distinguishing ethanol and other value-added products from simply increasing raw commodity exports. Callahan responded that the U.S. has an unprecedented opportunity to use reciprocal tariffs to open markets globally, especially in developing and emerging markets, while also maintaining and improving access to mature markets. She noted the growing domestic soybean crush capacity and the need for markets, agreeing that the focus must go beyond traditional discrete commodities to include value-added products, alongside citing efforts underway to identify shifting trade needs and open new tariff lines.
- Senator Grassley asked what changes should be raised during the U.S.-Mexico-Canada Agreement (USMCA) review, with Senator Marshall questioning opportunities and challenges in the upcoming USMCA negotiations. Callahan agreed on the value of USMCA but noted the U.S.’s significant agricultural trade deficit with Canada and Mexico. She framed the review as an opportunity to incorporate stakeholder feedback, referencing how USTR is reviewing public comments received through the Federal Register, and to address areas for improvement, particularly in ensuring that U.S. producers receive the benefits originally negotiated under the agreement. She cited recent agreements with Malaysia and Cambodia as examples of the rapid pace of negotiations in contrast to USMCA’s timeline.
- Senator Warren (D-MA) and Senator Bennet (D-CO) questioned the use of U.S. taxpayer funds to support competitors abroad at the expense of U.S. producers. Their comments criticized the U.S. bailing out Argentina while U.S. soybean farmers are facing falling crop prices and loss of market access, referencing continued Chinese purchases of Argentine soybeans. Callahan responded that soy is a top commodity in reciprocal trade negotiations, noting that ongoing negotiations are intended to reset trade relationships and how China’s weaponization of agriculture has significantly harmed U.S. soybean farmers.
- Senator Cortez Masto (D-NV) criticized the administration’s fifty percent tariff on Brazilian coffee, noting the U.S. imports 99 percent of its coffee and previously paid no tariffs. She cited the surge in retail coffee prices of over twenty percent in August and forty percent since last year. She questioned the rationale for using coffee tariffs as negotiating leverage when coffee is not produced in the U.S., and highlighted bipartisan legislation to eliminate the tariff. Callahan referenced that coffee is included on the Potential Tariff Adjustments for Aligned Partners (PTAAP) list and how PTAAP serves as a valuable tool in negotiations, covering up to eighty percent of some countries’ agricultural exports to the U.S. She stated that for partners who offer ambitious trade deals, the U.S. would be ready to lift tariffs on products like coffee.
- Senator Cantwell (D-WA) questioned Goettman on how USTR will address China’s imposition of docking fees on U.S. shipping and high costs, citing estimates at $1.6 million per voyage, for operators like Costco, while also preventing diversion of vessels to Canadian ports. Goettman responded that USTR is committed to maintaining market share at U.S. ports and is examining factors such as the harbor maintenance tax and vessel taxes to ensure a level playing field between U.S. and Canadian ports.
- Senator Warnock (D-GA) emphasized the importance of extending the expired African Growth and Opportunity Act (AGOA) and the Haiti Economic Lift Program (HELP) to counter China’s growing influence as Sub-Saharan Africa’s largest bilateral trading partner and to address its $60 billion trade surplus with the region. Goettman affirmed his support for extending AGOA and HELP, citing China’s expanding commercial and political influence in Africa.
SUMMARY
Opening Statements and Testimony
Chairman Mike Crapo (R-ID)
Dr. Callahan, nominated to serve as the Chief Agriculture Negotiator at USTR, has a long career in public service across USTR, the Food and Drug Administration (FDA), and the Department of Agriculture (USDA). As the Assistant USTR for Agricultural Affairs and Commodity Policy, Dr. Callahan has worked tirelessly to promote the interests of U.S. farmers, ranchers, and food manufacturers. Her nomination has been supported by over eighty associations representing these groups. I look forward to working with her, if confirmed, to ensure that the interests of U.S. agriculture are protected in international negotiations.
Ranking Member Ron Wyden (D-OR)
Instead of talking about keeping costs down, Republicans are talking about bailing out a foreign country while families go hungry. The Treasury Secretary, who is close to a billionaire, talks about being a soybean farmer. The President’s trade agenda has been nothing short of a disaster. Farmers and small businesses are struggling to stay afloat as he flip-flops on his tariffs and prices rise on everything. What is needed now more than ever is a consistent, understandable trade agenda that puts U.S. workers, businesses, and farmers first. Instead, we have a trade agenda that seems driven by the President’s personal grievances. I want to hear exactly how these nominees plan to restore stability to the economy and bring down costs.
Julie Callahan, Nominee for Chief Agricultural Negotiator
When I look at a map of the world, I see tariff and non-tariff barriers, as well as opportunities. U.S. agriculture is second to none, in terms of quality, safety, and efficiency, from the commitment to sustainable practices that allow for increased yields with fewer inputs, biotechnology that allows for no-till practices and innovative products to meet consumer demand. That said, U.S. agriculture is under great stress. Producers rely on export markets to break even and often find themselves on the receiving end of unfair trade practices that threaten their existence. Frankly, many trading partners do not treat the U.S. as well as we treat them. Moreover, many treat our competitors better than they treat us. Many times, trading partners have told me that agriculture is “too sensitive” to include in negotiations, yet they are importing billions of dollars of products. That is not right. The President’s America First Trade Policy offers a path to reset our trade relationships in a holistic manner and re-establish a level playing field for U.S. farmers. I understand that despite the President’s success in lowering inflation, unleashing American energy, and unlocking new market access, farmers continue to struggle. China is using agriculture as a weapon, and U.S. producers are feeling the pain. I will work with Congress and the administration to craft and implement an agricultural trade policy that promotes fair and reciprocal trade, and for the benefits to accrue for all sizes and sectors of the agricultural economy. I will work tirelessly to break down barriers and open market access for U.S. producers.
Jeffrey Goettman, Nominee for Deputy U.S. Trade Representative
Ambassador Bob Lighthizer supported my appointment as the Chief Operating Officer and Executive Vice President of EXIM during President Trump’s first term. Ambassador Greer has shown steady leadership in forging the America First trade policy, with his unparalleled knowledge of international trade and his unwavering commitment to take action. Today, the hollowing out of once vibrant manufacturing communities is emblematic of how the U.S. suffered from the deindustrialization that began with North American Free Trade Agreement (NAFTA) and was accelerated by China’s entry into the World Trade Organization (WTO). At EXIM, I had a front-row seat witnessing the erosion of the U.S.’s global share in important infrastructure projects due to the aggressive industrial policies and fierce competition of other nations. I watched as China executed its Belt and Road initiatives to expand and strengthen its commercial and political influence in Africa and strategic regions around the globe, while also flooding global markets with subsidized industrial overcapacity. I will also work to advance critical manufacturing sectors and supply chains in the U.S.
DISCUSSION
Chairman Crapo (R-ID): Do you commit to continuing to make yourself accessible to discuss in greater detail the tariff and non-tariff barriers U.S. agriculture faces, as President Trump moves forward with efforts to reduce these trade barriers? Callahan: Absolutely. We are in an unprecedented time in terms of our negotiations to ensure U.S. producers are able to get the market access they need and can compete on a level playing field all over the world. I look forward to working with you, with our cleared advisors, and with stakeholders to make sure U.S. farmers and ranchers get those benefits.
Senator Wyden (D-OR): What are you doing about the tariffs that are driving up input costs for farmers and ranchers, particularly on key inputs like fertilizer, and what is being done today to help reduce those costs? Callahan: I understand the urgency of getting these agreements over the finish line rapidly so that we can open opportunities for U.S. farmers and ranchers. On the specific input costs, like the referenced rising costs of fertilizer, I have a very close relationship with the Assistant USTR for Industrial Goods, and we are both cognizant of the urgency.
Senator Grassley (R-IA): What are some of the non-tariff barriers U.S. farmers face in exporting products to China, including soybeans? How will you continue to force China to comply with rule-based trade and its own regulations to allow more U.S. products into the Chinese market? Callahan: In terms of the struggle faced by U.S. farmers and ranchers on high input costs and low commodity prices, I understand the stress and will work on trade policy from the USTR side and with colleagues across the U.S. government on domestic policy issues that can help. On China specifically, China has done some unprecedented damage this year, in particular this growing season, when they were not procuring U.S. agricultural goods. There is some sign of hope in advance of the President’s meeting with President Xi. That said, we are very pleased to see that there are some soybean purchases happening, which are long overdue. There are other sectors where we also need to see China lift its unjustified trade barriers, including sorghum, cotton, and a number of other commodities. Across the board, China has been weaponizing agriculture, and I am looking forward, if confirmed, to engaging with China to ensure that we can have a transactional relationship. We do not want to over-rely on China as an export market, but we also do not want that market to be zero.
Senator Grassley (R-IA): As we look to reviewing USMCA now that the Mexico GMO corn issue was resolved, are there some changes that we should voice in the review? Goettman: USMCA is part of my portfolio going forward, and so far, I have been unable to directly engage on issues related to USMCA. I look forward to working with your team and ensuring that we get the appropriate outcomes for farmers; Callahan: The USMCA review is an excellent opportunity to take into consideration the feedback that we received from stakeholders and address areas where there is clearly room for improvement, particularly in ensuring producers get the benefits that USTR originally negotiated in the USMCA.
Senator Daines (R-MT): Has U.S. wheat benefited from the recent framework agreement with Japan, and can we expect more positive results with South Korea, given the importance of export market access for U.S. wheat farmers? Callahan: In terms of our agreements on reciprocal trade negotiations, we are really pushing for three areas of progress. One is lowering tariffs on U.S. agricultural goods. The second is eliminating unjustified non-tariff barriers. Those are really the core areas of negotiation. The third is seeking purchase commitments from countries that choose to do so. U.S. wheat is one of the commodities that several countries are committing to sign Memorandums of Understanding (MOUs) with the private sector and making plans to import more U.S. wheat to benefit U.S. wheat growers. In terms of Japan and Korea in particular, we will be pressing them to ensure that there are no non-tariff barriers that are unjustifiably holding back purchases of U.S. wheat and to promote further market access for those two countries as well.
Senator Bennet (D-CO): What is the value in providing unconditional financial support to Argentina, expanding their U.S. market access, and taking on exposure to the Argentine peso, especially while China continues large soybean purchases from Argentina at the expense of U.S. farmers, if these actions do not reduce prices in the U.S. and may come at the cost of our national security? Callahan: The negotiations with Argentina are underway, and my intention is to signal to U.S. farmers and ranchers that my single-minded effort across our negotiations is to open market access to benefit U.S. farmers and ranchers.
Senator Whitehouse (D-RI): If a foreign country, or a company in a foreign country, acquires competitive advantage against U.S. competition by virtue of its failure to meet health or environmental standards, is it appropriate to look at for tariffing to correct the imbalance and put the U.S. company on a fair footing with the foreign competitor? Will the adequacy of our competitor country’s waste management be an issue that you will take a look at? Goettman: Environmental enforcement, among other arbitrage that is occurring in the global economy, is something that we should look at significantly and pursue and work with your team on. Specifically, what we’ve seen in Southeast Asia is the waste product and plastic waste.
Senator Barrasso (R-WY): What assurances can you provide that increased imports from Argentina will not undercut prices for U.S. tallow producers? Callahan: Our efforts in all our negotiations across the globe and the agreements on reciprocal trade are intended to reverse the U.S. agricultural trade deficit. We went from a $6 billion agricultural trade surplus four years ago to a $34 billion agricultural trade deficit last year. We are negotiating for increased and expanded market access with our trading partners across the board. This negotiation is ongoing and is ensuring that our agricultural trade deficits turn into surpluses and that U.S. producers have access to markets around the world. We have farmers who are at risk of losing their ranches and farms, and I am committed to ensuring that U.S. producers have a fair shake and compete for the domestic market. They are being outcompeted by imports and we want to see that reversed as well.
Senator Cantwell (D-WA): What can we do to eliminate these tariffs? What do you know about important products like potatoes being left out of recent agreements, and what is the timeline for addressing this? Callahan: The issue of potato access into Japan is one that I am familiar with and is an issue I am committed to resolving with Japan, as their unjustified non-tariff barriers are preventing fresh potatoes from entering their market. I will certainly be engaging with my Japanese counterparts to make sure they move forward.
Senator Cantwell (D-WA): What will you commit to doing at USTR to lessen fees, estimated at about $1.6 million per voyage for Chinese operators like Costco, and to address that China started charging U.S. shipping for docking at Chinese ports? How will you protect U.S. ports from unintended consequences, such as vessels diverting to ports in Vancouver or Prince Rupert? Goettman: We are looking to ensure that jobs at U.S. ports will continue to be robust and have growing opportunities, and that we will not be losing market share in our northwestern ports to Canadian ports. As we work through this, there are several items that are important to consider in terms of the harbor maintenance tax as well as the vessel taxes. Our goal is to make sure that we maintain a level playing field here in our northwestern ports compared to Canada.
Senator Cortez Masto (D-NV): Given that the U.S. imports 99 percent of its coffee and previously paid zero tariffs, what is the point of the fifty percent tariff this administration has imposed on Brazilian coffee, especially as it has contributed to retail prices surging over twenty percent in August and coffee costs rising forty percent from a year ago? Callahan: On September 5, the executive order that was issued by the President lists a long list of products that are not produced in the United States, including coffee, cocoa, and spices. This list, PTAAP, is incredibly valuable to the trading partners that we are negotiating with. For some partners, this list represents eighty percent or more of their agricultural exports to the U.S. For those trading partners that offer us an ambitious deal, and we are able to close that deal, we will be ready and willing to remove the reciprocal tariff on coffee and other products.
Senator Cortez Masto (D-NV): How many PTAAP-listed countries are you currently negotiating with, and what is the timeline for those negotiations, with USCMA taking several years? Given that coffee is not produced in abundance in the U.S., should American consumers have to bear the cost of tariffs used as negotiating leverage, especially with bipartisan support to end the tariff on Brazilian coffee and legislation introduced to impose no tax on coffee? Callahan: At USTR, we have been working night and day to finalize these agreements. Two agreements that were signed this weekend, the Malaysia Agreement and the Cambodia Agreement, really are emblematic of the high level of ambition that we are seeing from trading partners. On the Malaysia Agreement, we worked around the clock to get that agreement over the finish line. These agreements are being finalized and signed on a really unprecedented timeline. You are right on the length of time for the USMCA versus the two agreements that were signed this weekend that only took a matter of months.
Senator Warren (D-MA): Do you agree that bailing out Argentina while U.S. soybean farmers are struggling is a betrayal of the farmers whose interests you would be charged with representing? Can you acknowledge that there is a serious problem right now for U.S. soybean farmers, given surging farm bankruptcies, falling crop prices, and loss of market access, especially as U.S. taxpayer money is used to support their competitors abroad? Callahan: In our negotiations for agreements on reciprocal trade, soy is a top commodity that we are negotiating on to ensure that countries around the world have access to high-quality U.S. soybeans. In my role as the Assistant USTR for Agriculture, and if confirmed as the Chief Agricultural Negotiator, I will have the interests of U.S. producers. Our current negotiations are making good on the promise to U.S. farmers to reset our trade relationships. China’s weaponization of agriculture has absolutely harmed U.S. soybean farmers.
Senator Warren (D-MA): What is the name of the country China is buying soybeans from right now? Callahan: China is purchasing Latin American soybeans.
Senator Warnock (D-GA): Do you agree that it is important for Congress to maintain trade tools like AGOA and HELP, both of which expired on September 30, to combat China’s growing influence through becoming Sub-Saharan Africa’s largest bilateral trading partner as well as its $60 billion trade surplus with Africa? Will you commit to working on a bipartisan basis to get AGOA and HELP back online, and to help explore reforms that strengthen them long term in support of U.S. interests? Goettman: Based on my past experience at the ExIm as Chief Operating Officer, we saw China’s incredible influence and expansion of influence, both commercially and politically, throughout Africa. We are in support of an extension for both, and I look forward to using our resources to do such.
Senator Welch (D-VT): Is there a link between the tariffs that have been imposed and the complete loss of market opportunities in China for soybean farmers? Callahan: In negotiating the agreements on reciprocal trade, it is actually the opposite situation, where previously the U.S. had an average agricultural tariff imposed on imports of five percent, while we were negotiating with countries that have ten to thirty percent average tariffs on U.S. agricultural goods. The reciprocal tariffs have really allowed the leverage that we can get, both removal of non-tariff barriers that have prevented U.S. agricultural goods from accessing markets, and also bringing those incredibly high tariffs down for the U.S. can compete on a level playing field.
Senator Marshall (R-KS): What are the opportunities and challenges you see going into the upcoming USMCA negotiations, and how do we put wind beneath each other’s sails to strengthen what has been a very successful agreement? Callahan: I absolutely agree on the value of USMCA. That said, the U.S. has a massive agricultural trade deficit with both Canada and Mexico, and there are certainly areas for improvement. We are reviewing the comments received through our Federal Register notice and will be taking all of those comments into consideration as we think through how we can ensure that the benefits negotiated on paper are seen by U.S. producers, large and small, across the U.S.
Senator Marshall (R-KS): Can you speak to the importance of the sorghum market, not just with China but also with Mexico, and whether that will be a priority moving forward? What do you see as the opportunities for value-added agricultural products, such as turning soybeans into bacon, corn into beef, and sorghum into biofuels, particularly in the context of our trade agreements? How do you view opportunities for ethanol and other value-added products, as distinct from simply increasing raw commodity exports like corn and soybeans? Callahan: We have an unprecedented opportunity to use the leverage of the reciprocal tariffs to open markets around the world, most importantly, developing countries and emerging markets where there are increasing opportunities to grow our market share. There are a number of trading partners that are long-standing, important, and with mature markets that we want to make sure we are maintaining, decreasing non-tariff barriers where we can, and, importantly, opening up new markets. Our efforts right now are focused on opening up those new markets. Our capacity to crush soybeans domestically is growing, and that means we need markets for U.S. soybean meal. We are looking at input from stakeholders on where those shifts are occurring and what new tariff lines we need to open. It is not just the traditional discrete commodities that we need to think about, but also markets for those value-added products.
Senator Marshall (R-KS): What are the opportunities you see in the Western Hemisphere, Africa, and newer markets? Goettman: We have heard from many companies that manufacture in the U.S. who would like us to pay more attention to rules of origin, transformation, and other challenges that we face for products coming in across the border from Mexico and Canada.