SENATE FINANCE COMMITTEE
CONFIRMATION HEARING FOR USTR & TREASURY NOMINEES
For questions on the note below, please contact the Delta Strategy Group team.
On July 31, the Senate Finance Committee held a hearing to examine the nominations of Bryan Switzer for a Deputy U.S. Trade Representative (USTR) for Asia, Textiles, Investment, Services, and Intellectual Property, with the rank of Ambassador; and Derek Theurer for a Deputy Under Secretary of the Treasury. Chairman Crapo’s (R-ID) opening statement is available here, and Ranking Member Wyden’s (D-OR) is available here.
Below is a summary of the hearing prepared by Delta Strategy Group, which includes several high-level takeaways, followed by summaries of opening statements and discussion.
KEY TAKEAWAYS
- Chairman Crapo (R-ID) highlighted Switzer’s experience with negotiating international agreements, expanding market access for U.S. businesses, and protecting U.S. firms from unfair trade practices. He discussed how Switzer’s confirmation will ensure that USTR implements policies that promote U.S. competitiveness, build supply chain resilience, and address emerging global challenges.
- Switzer emphasized that opening market access is the most important element the administration’s trade policy, citing the current limitations established by tariff barriers, non-tariff barriers, and other regulatory structures. He outlined that USTR will look at the totality of the trade actions and violations that take place in any given country and will take a series of trade actions against the entire country, as opposed to one-off attempts that have been tried in previous administrations. He raised that in almost every case, one-off approaches did not work, highlighting that USTR will be using a systemic approach to coercive practices head-on and from the ground up.
- In response to Senators Grassley (R-IA) and Young (R-IN) on China as a threat, Switzer stated that the goal is not full decoupling from China but trade reciprocity and fairness, complemented by strategic de-risking in specific sectors. He raised the need, as a matter of national security, to ensure and secure networks of trust between the U.S. and allies, with bilateral agreements such as the U.S.-Mexico-Canada Agreement (USMCA) and the U.S.-Japan Trade Agreement (USJTA). He called for building the U.S. holistic supply chain as the means toward a long-term, sustainable, efficient, competitive supply chain.
- Senator Grassley (R-IA) emphasized the importance of promptly and properly implementing the Clean Fuel Production Tax Credit (45Z) included in the One Big Beautiful Bill Act (OBBBA), noting its significance to the biofuels industry and farmers. He criticized the Biden administration for failing to meaningfully address 45Z regulations, referencing how the inaction has led to market disruptions and biofuel plant closures. He questioned Theurer on a timeline for formal implementation guidance, stressing the need for regulatory certainty to allow the industry to proceed confidently. Theurer responded that he did not know the timeline, noting the role of the Office of Tax Policy, but that such input is helpful and that it will be conveyed as a priority.
- Democrats, led by Ranking Member Ron Wyden (D-OR), criticized President Trump’s trade agenda as unpredictable and harmful, describing how it has been marked by tariff flip-flops that have created uncertainty for farmers, businesses, and workers. He questioned Switzer about how tariffs serve as a form of taxes on U.S. businesses. He also cited discussions with wheat farmers about falling prices and rising input costs, emphasizing their calls for certainty and predictability in trade policy.
SUMMARY
Opening Statements and Testimony
Chairman Mike Crapo (R-ID)
Switzer has over 25 years of experience advancing U.S. strategic interests both domestically and internationally. Throughout his career as a Foreign Service Officer at the Department of State, he negotiated international agreements, expanded market access for U.S. businesses, and protected U.S. firms from unfair trade practices such as intellectual property (IP) theft and forced technology transfer. I look forward to working with him, if confirmed, to ensure that USTR implements policies that promote U.S. competitiveness, build supply chain resilience, and address emerging global challenges. The Deputy Undersecretary for Legislative Affairs is responsible for advising the Secretary on congressional relations matters to assist in the formulation of policy and to determine the overall direction of the Department. Theurer is a veteran of Capitol Hill and undoubtedly understands the importance of keeping Congress informed of actions. Given his experience, I expect him to prioritize timeliness in responding to inquiries from Congress.
Ranking Member Ron Wyden (D-OR)
From day one, Donald Trump’s trade agenda has been nothing short of disastrous. Basically, it consists of a few lines on a napkin for the most part, and a lot of flip-flopping on tariffs. Farmers, businesses, and workers are left in limbo and this roller coaster of uncertainty is causing huge harm. Wheat farmers told me, “Our prices are down. That is a big problem. Our input costs are up. Give us some certainty and predictability.” That is the kind of leadership that we would like. Donald Trump has managed to weaponize nearly every corner of the Treasury Department to target enemies or those who disagree with him, and that has been to the detriment of the country. I certainly hope that Theurer can make some improvements there. Among the current class of Trump appointees, even the familiar nominees who come before this Committee and say all the right things, have ended up betraying their commitments. Unfortunately, trust is long gone with this Treasury Department turning the IRS against taxpayers.
Bryan Switzer for a Deputy United States Trade Representative
I have spent more than two decades in public service, advancing U.S. strategic interests at the intersection of diplomacy, trade, technology, and national security. The U.S. and our allies largely built the international trading system. While we have benefited from this trading system, it, like all governance systems, needs reform from time to time. The status quo trading system of the past two decades ignored the unfair trading practices of many of our largest trading partners and, as a result, many Americans, particularly the middle class, are hurting. We need trade policies and practices that place the U.S. economy and worker first, requiring that all our trading partners play by rules based on reciprocity. Throughout my twenty years of government service, I have worked to promote the economic interests, leadership, and technological competitiveness of the U.S. around the globe. I have seen how trade policy, technological leadership, and national security are deeply intertwined. As our global competitors seek to rewrite the rules of commerce, we must ensure that our trade agenda supports not just economic growth, but also the values, resilience, and strategic strength of the U.S. by ensuring that American workers, farmers, and businesses can compete fairly in global markets. Having spent much of my career negotiating international agreements and defending companies from forced technology transfer and other discriminatory practices, I believe trade policies must ensure that U.S. producers, not just consumers, benefit from global commerce. That means securing reciprocal access, raising labor and environmental standards, and confronting coercive practices head-on. We must strive to enhance our economic and supply chain resilience. The past few years have exposed vulnerabilities in our global supply chains, particularly in strategic sectors like semiconductors, pharmaceuticals, and critical minerals. In today’s geopolitical climate, we must treat economic resilience as a core pillar of national security. USTR has a role to play in advancing trade agreements and partnerships that strengthen our ability to withstand shocks and reduce overreliance on adversarial economies. U.S. trade leadership should be principled, pragmatic, and strategic. Successful policy depends on deep interagency coordination, close consultation with Congress, and sustained engagement with allies and partners. Trade is not an end in itself, but a tool to advance our broader goals: economic prosperity for all Americans, industrial strength, technological leadership, and global stability. I am committed to working with this Committee to ensure that our trade agenda reflects those priorities and delivers tangible results.
Derek Theurer for a Deputy Under Secretary of the Treasury
Having previously served as Senior Tax Counsel to a member of the Finance Committee, I recognize the scope and significance of the issues deliberated herein, including tax and trade. I was pleased to see The One, Big, Beautiful Bill signed into law by President Trump on July 4th, locking in crucial tax relief for families and small businesses and priming our economy for growth. To assist efforts and responsibilities for legislating and conducting oversight, the Treasury Office of Legislative Affairs will be open and responsive on relevant matters across our departmental offices and bureaus. Working together, I am confident we can find ways to strengthen the economy and offer greater security to American families.
DISCUSSION
Chairman Crapo (R-ID): How are you going to use the tools at your disposal to address the challenges identified in the USTR’s Special 301 Report to ensure the rigorous enforcement of U.S. IP rights that exist for and foster innovation? Switzer: IP rights are a priority of Ambassador Greer and President Trump. In every one of our trade discussions and agreements, it is first and foremost. Issues like digital service taxes and others are issues that we are very concerned about. We intend to use every tool at our disposal, whether it be 301 or others, in working with Commerce and the U.S. government to ensure that U.S. IP rights are protected, and that U.S. property holders are protected. That would include things like trademarks and other items where you have counterfeit goods from certain countries, and you also have cases where U.S. IP is stolen outright or where countries have pressured U.S. firms to provide access. One of the real issues that we have faced, particularly when it comes to China, is that when the firms tell us the things that happened to them, they often tell us not to do anything about it. This administration has decided that we are going to take on those coercive practices head-on. We are not going to choose to prosecute one case or not prosecute one case on behalf of a specific firm. We are going to look at the totality of the trade actions and IP violations that take place in any given country, and we are going to take a series of trade actions against the entire country, as opposed to one-off attempts that have been tried in previous administrations. In almost every case, that one-off approach did not work. We are using a systemic approach that uses every tool at our disposal to approach this from the ground up.
Ranking Member Wyden (D-OR): What would you do specifically to help small businesses getting hit by tariffs that serve as a form of taxes? Switzer: What I would do is what the President is trying to do now and has been doing with a lot of the great trade deals, and what Ambassador Greer has been doing traveling all over the world. I would push for access. U.S. small businesses have been denied access to most markets around the world through tariff barriers, non-tariff barriers, regulatory structures, and the use of so-called white lists of products that are available to be purchased. For small businesses from the U.S. trying to sell in China, whether they have a superior product, whether they can beat on price, or whether there is a huge market is that none of those things matter. The government puts in place restrictions. Opening access is the most important thing to do, and we are working diligently.
Senator Grassley (R-IA): Will you commit to keeping Congress well informed during the implementation process of the OBBBA, and consult with relevant members of Congress where questions arise regarding congressional intent? Theurer: Absolutely. Treasury will implement the law, and I look forward to working with you as we go through that process.
Senator Grassley (R-IA): Regarding the twelve-month transition period based on when projects “begin construction” and the phase-out for wind and solar credits, will you commit to advising Treasury that both the law and the congressional intent are clear, and that “beginning of construction” means what it has meant for more than a decade? Theurer: This is an issue that falls squarely in the purview of the Office of Tax Policy at Treasury. We had an opportunity to meet with you and your staff this week. If confirmed, you can expect that that type of engagement will continue and an open door through the Office of Legislative Affairs as the Office of Tax Policy works through these questions.
Senator Grassley (R-IA): Due to Biden administration failing to meaningfully address 45Z regulation, which caused major market disruption and plant closures, when can we expect to see formal guidance on implementing the 45Z clean fuel production credits so that the biofuels industry can confidently move forward with operations? Theurer: This again falls squarely within the Office of Tax Policy. I do not have the timeline on when they might provide guidance there, but this input is helpful. It is noted, and we will be sure it is conveyed as a priority.
Senator Grassley (R-IA): Do you think that the whole U.S. economy needs to decouple completely from China, or only certain sectors? Switzer: As Secretary Bessent, Ambassador Greer, and the President have said, we do not seek to decouple from China. What we seek is trade reciprocity and trade de-risking. There are certain segments of the U.S. economy that require de-risking, such as semiconductors. We have cyber-physical systems that can turn on and turn off elements of our critical digital infrastructure; aerospace, defense, and other areas of national infrastructure. These are the things that we need to de-risk. When it comes to other areas, we want to sell into China. As long as there is trade reciprocity, we should be able to buy from China items that they produce that others cannot produce, whether it be certain types of textiles and others where there is a robust market. What we really seek is purely fairness and reciprocity, with some strategic de-risking.
Senator Whitehouse (D-RI): Would you consider putting a penalty or consequence of some kind on Asian countries that do not invest adequately in their own waste management systems, given that there are no consequences for them and it is not even counted in our list of trade concerns? Switzer: One of the ways that they are able to flood markets with products that are below market value or below the cost of production is because they do not internalize the environmental costs. It is an unrecognized subsidy, and it is a priority of the USTR to begin to implement better environmental safeguards within our trade agreements. That is why the USMCA had environmental safeguards built into the trade agreement. Ambassador Greer has said that we want to build these similar sorts of high-quality environmental safeguards into other trade agreements as we continue to move forward with our discussions about providing more reciprocal trade. Environmental and labor standards are other aspects of reciprocity that we intend to try to build in.
Senator Hassan (D-NH): Would you advise administration officials to reverse tariffs that target our allies like Canada in order to focus on actually combating unfair trade from adversaries like the Chinese government? Switzer: The totality of the trade policy of the President is to address a global problem. We have a global national security problem and China is at the center in many cases, but it is not solely about China. I would recommend that we continue to focus on China, with the recognition that China is the second-largest economy in the world.
Senator Cortez Masto (D-NV): What is the value in a trade agreement that is not legally binding, does not come through Congress, has no written enforcement mechanism, and can be unilaterally violated at will? Switzer: There is a huge value. When the President gets together with the Prime Minister or President of another country, and they set the policy direction, they tell not only the U.S. government but also the other country’s government officials who now know that this is what our bosses told us we are going to achieve. I am not actually in USTR right now and I only know what is in the public domain, so you know as much as I do. These agreements will be structured as executive agreements. We have a large number of executive agreements. When I worked at the Department of State, we negotiated executive agreements on science, technology, health, climate, and all sorts of things. None of those required congressional approval. Wherever these agreements require statutorily mandated congressional approval, we will seek Congressional approval and follow the law. Ambassador Greer has committed to that.
Senator Daines (R-MT): Will you commit to safeguarding the projects we passed in the OBBBA, such as those supporting expensing for capital, R&D, interest, energy, and no tax on tips, by ensuring they are complying with the law as written and the existing “beginning of construction” guidance? Theurer: Small business provisions in this bill, as well as cost recovery, will be a significant accelerant for businesses. The Office of Tax Policy will interpret and provide guidance and they will work with you and your staff as they go through that process.
Senator Young (R-IN): How would you balance the commercial opportunities of digital services trade with the national security risks posed by untrusted suppliers, particularly Chinese state-linked providers? Switzer: I agree completely. We need to build networks of trust. We need our partners and allies in Europe, in Latin America, and elsewhere in Asia to agree to networks of trust, to install telecommunications, Internet of Things, and cyber-physical systems that can be trusted. We need to make sure that those products and the core technology underneath are made in America wherever possible, or made in allied countries wherever possible. We need to build that into our trade and our other bilateral agreements with our partner nation-states.
Senator Tillis (R-NC): What do you think about the President’s comment that IP and copyright infringements are too complicated to address upfront in AI implementation and should be left to the courts, especially given China’s rampant IP theft? What advice would you give for negotiating a trade agreement that holds them accountable for building their economic rise on the theft of U.S. innovation? Switzer: It is very complicated in some aspects, but it is less complicated than it needs to be. The President has really shown the kind of leadership that is required. You have to take these problems head-on and cannot attack them one at a time. This prisoner’s dilemma problem requires that only the U.S. government can step in. While we want to partner with the private sector, it requires deep leadership on behalf of the U.S. government, which says these practices will no longer be tolerated, full stop.
Senator Barrasso (R-WY): How will you work with our Asian allies to counter China’s domination in terms of global critical minerals? Switzer: The government of Japan is very interested in partnering with us on this. My understanding of the USJTA is that there is $550 billion of pledged financing to go into these sorts of projects. We need is a holistic supply chain. We need it from mines to final products, and not just defense products. That is how you get a long-term, sustainable, efficient, competitive supply chain across the board.