Secretary Ross at White House Daily Press Briefing (04/25/17)
MR. SPICER: Good afternoon. I'd like to start off today by having the Secretary of Commerce discuss an action that the Commerce Department took last night with respect to Canadian softwood lumber. It's an action that talks about what we're doing to make sure that we're fighting for our industries here at home.
So without further ado, I want to bring up Secretary Wilbur Ross.
SECRETARY ROSS: Thank you, Sean.
The action we took last night is actually the culmination of a couple of decades of disputes between the United States and Canada. What’s provoked the disputes is the following. In Canada, the forests are owned by the individual provinces, and each of the provinces sets a charge for the loggers to use when they’re taking trees down. In the U.S., it's all open market, it's all market-based prices.
So the provinces subsidize the cutting down of lumber -- the technical term being stumpage -- and then that lets them charge a subsidized low price when the product hits the U.S. border. We have determined preliminarily that those problems, while they vary from one province to another, in some cases are as high as roughly 25 percent, and on average are around 20 percent. So they’re quite material items.
So the preliminary decision that was put out yesterday imposes those countervailing duties on softwood lumber from Canada. Those duties will be collected starting today and they will be collected on a retroactive basis, going back 90 days, because it is 90 days ago that the Canadians were put on notice about this being an inappropriate process. What it amounts to is the following.
There is roughly $15 billion worth of softwood lumber used in houses in this country, and about 31.5 percent of that comes from the Canadians. So that's roughly $5 billion a year. A 20 percent tariff on that is essentially a billion dollars a year. And the retrospective 90-day feature adds another $250 million to that on a one-time basis.
Softwood lumber, as I say, is fundamentally used in single-family houses. We do not think that the price of lumber will go up by anything like the 20 percent, but there may be some small increase in the price of lumber for the house.
Q Will housing prices be increased in the United States due to that action?
SECRETARY ROSS: Not necessarily, because you're talking such a small amount. And the biggest part of most home prices in any event is the land value, not the lumber value. Lumber is a pretty small percentage of the total cost of the house.
Q Mr. Secretary, what provoked this? As you mentioned, this has been a long-running dispute, subject of conversations between U.S. and the Canadian governments, the Bush administration and the Obama administration. Is this part of the milk dispute and is this a lever or a bargaining chip with the Canadian government over that dispute that's going on as we'll?
SECRETARY ROSS: This investigation had been underway before anything came up about milk. And on a statutory basis, the last day we could have released the findings would have been today, so the only thing that we did do was accelerate it one day.
Q If this is not related at all to the milk dispute, do you see it as factoring in the Canadian judgments about how to respond or how to resolve some of these other trade disputes?
SECRETARY ROSS: Well, everything relates to everything else when you're trying to negotiate, so I can't say there’s no impact. But what we have tried to do was to clear the air and get this dispute out of the way before the big NAFTA talks went on. That was not possible to achieve, and that's why we went ahead and released the findings.
Q Mr. Secretary, Canada is an extremely close ally and a neighbor. Are you comfortable with how this has worked out in terms of what it means for the overall relationship between our two countries?
SECRETARY ROSS: Well, they are a close ally. They’re an important ally. They’re generally a good neighbor. That doesn’t mean they don't have to play by the rules.
Q What do you mean by “generally” a good neighbor?
SECRETARY ROSS: Well, things like this I don't regard as being a good neighbor -- dumping lumber. And there’s a feeling in the dairy industry that they’re a little bit abrupt in the action that they took the week before.
Q The Canadian government said that those are unfair tariffs. And each time the case was brought to an international court, Canada won its case. What do you answer to this?
SECRETARY ROSS: I had nothing to do with the prior cases. I'm confident that this case is a good case.
Q Going to put tariffs on dairy, too?
SECRETARY ROSS: The problem with dairy isn't that they’re dumping dairy products in the U.S. The problem is the reverse
-- they’re prohibiting U.S. dairy producers from selling their products in Canada, as a practical matter, and we're looking into whether there are measures we can do to try to correct that.
Q Mr. Secretary, have you heard from anybody in the Canadian government, or has the Prime Minister reached out to President Trump to try to convince you to change your policy or change the approach or work with you in any way?
SECRETARY ROSS: Well, I haven't heard of anybody trying to ask us to change the approach. You’ve seen the public statements that the Canadians put out. As far as I know, that is their position.
Q Mr. Secretary, I'm curious whether this softwood lumber dispute or the milk dispute points to the need to revisit, to renegotiate NAFTA sooner rather than later.
SECRETARY ROSS: Well, I think it does, because if you think about it, if NAFTA were functioning properly you wouldn’t having these kinds of very prickly, very unfortunate developments back-to-back. So in that sense it shows that NAFTA has not worked as well as it should.
Q Milk is not covered by -- this particular dispute is not covered by NAFTA.
SECRETARY ROSS: That's one of the problems.
Q Mr. Secretary, in other words, why not try to resolve this in not-so-public fashion? You're coming in the Briefing Room. You're obviously trying to flex the muscles of this administration. What would you say to the layman out there who says, why is President Trump messing with the Canadians now?
SECRETARY ROSS: It’s not a question of President Trump messing with the Canadians. We believe the Canadians violated legitimate practice. And to the degree we're correcting that, it should be corrected, just like steel dumping from China or any other trade infraction.
Q You're trying to make a point, publicly.
SECRETARY ROSS: We make it publicly all the time. It’s just that there has been so much general public interest engendered by the two things -- the dairy and the lumber -- that we thought it was good to clarify.
Q Secretary Ross, during the presidential campaign, people following then-candidate Trump would have assumed his singular focus would be on Mexico in terms of trade. All of a sudden now we're hearing all these items related to Canada. Can you tell us why the focus seems to have shifted up north?
SECRETARY ROSS: Well, we had no way to know that the Canadian diary people would take the action that they did; nor did we have any way to know that the lumber dispute wouldn’t have been resolved by negotiations. We tried. It didn't work, and so we went ahead with the statutory proceeding.
Q -- any additional trade against Canada?
SECRETARY ROSS: I’m sorry?
Q Is the administration contemplating additional trade actions against Canada at this point?
SECRETARY ROSS: As far as I know, there’s nothing immediate contemplated.
Q Secretary Ross, when I talk to trade experts about this, they say the substance of what you did is very routine, like this has been done before, these preliminary countervailing duties. But they said what was really irregular was the way that you communicated it. Is this something that you're trying to sort of do as a bit of a PR thing to put NAFTA on notice? How should we read your very aggressive statement?
SECRETARY ROSS: Well, it’s not routine -- it’s not routine in that a $1 billion of countervailing duties does not happen every single day. This is a quite large --
Q It happened in the early 2000s. It’s happened before. It’s not unprecedented.
SECRETARY ROSS: No. We made the release the way that we made the release.
Q But why did you make it that way?
SECRETARY ROSS: It seemed appropriate under the circumstances.
Q Mr. Secretary, thank you, sir. Sir, India and America both were -- America was the largest trading partner of India -- or India was largest trading partner under Prime Minister Modi. And now we have a new administration with a new TP, and a revisionist administration -- same thing in India. Prime Minister has the same thinking. So what is the future of the trade between U.S. and India, sir?
SECRETARY ROSS: Well, the U.S. does not have a free-trade agreement with India at this point, so the trade relations between the U.S. and India are governed by the WTO rules. There’s nothing in the actions we've taken that changes that.
Q Mr. Secretary, following up on what Jim said, though, if housing prices do increase due to this, what do you tell the average consumer in the United States if the prices are going up? They didn't bargain for that.
SECRETARY ROSS: Well, I don't know what they bargained for, but I’m sure what nobody in the United States bargained for is people dumping product. It’s no different whether you dump steel or aluminum or cars or lumber or anything else. Nobody has --
Q You used the term "countervailing duty" and "anti-dumping" interchangeably, and they're two different things. Which is it -- dumping or countervailing duties?
SECRETARY ROSS: This is countervailing duties.
Q Mr. Secretary, do you have a specific timeline for when the President is going to announce his intention to renegotiate NAFTA? And could this move actually complicate his efforts to get a deal?
SECRETARY ROSS: Well, we've put the Congress on notice quite a few weeks ago of our intention to renegotiate NAFTA. What's been stalled is getting the Trade Promotion Authority, the so-called fast track authority, approved by the Congress. Now, Bob Lighthizer, having been confirmed out of committee today, and hopefully coming to the Senate for a full vote very shortly, that should cure one of the objections that some of the senators had. Namely, they were concerned about formerly reopening NAFTA when you have the U.S. Trade Rep being confirmed.
Now, the Catch-22 to that was they were also slow-walking the confirmation, so it was a little bit of a circular thing. But in any event, that appears to be in the process of being corrected.
Q Will this move complicate your efforts to get the deal?
SECRETARY ROSS: Everything affects everything else. But this trade issue over lumber, as has been pointed out, is not a brand-new issue. It's been around for quite a while.
Q Mr. Secretary, the next upcoming meeting of the G7 is about a month away, and the U.S. is in the middle of negotiations with -- or talks with China about how to address North Korea. Are you comfortable that the North Korea calculus has not hamstrung your ability to be as direct with China on matters like that? And is the action with Canada meant also to signal to our other Western economic allies and partners that if they mess with the U.S., they could face something like this?
SECRETARY ROSS: Well, as to Canada -- as you know, at the Mar-a-Lago meetings, we agreed on a kind of 100-day program, and we're going back and forth with the Chinese over the 100-day program. So we shall see what comes from that. As to the action with lumber or, for that matter, with dairy with Canada, it really has no bearing on the Chinese relationship at all.
Q It seems to me that the object of the 25 percent tariff on soft lumber coming out of Canada is not to raise wood prices, it's to save and create American forestry jobs and loggers who are losing their jobs right now as a result of the dumping. Has the administration done a study? Do you know how many American jobs are going to be saved by this tariff?
SECRETARY ROSS: Well, it's quite a lot of board feet of lumber. Lumber sells for about 38 cents per foot. So if you take all these large amounts -- there's about 47 billion board feet of lumber consumed in the U.S. market in a given year. And part of the reason I don’t see that there be a huge price differential coming in is this only affects 31.5 percent of that output. The competition among the American producers remains the same. So this is not like suddenly house prices are going to go up 10 to 15 percent. That's silly.
Q How many new jobs will be created or jobs will be saved as a result of stopping the dumping?
SECRETARY ROSS: I don’t have an exact total, but I can tell you it's in quite a few states -- so along the northern perimeter, going all the way down into Louisiana. So this affects quite a number of people and quite a number of businesses.
Q Mr. Secretary, you're getting bipartisan support, at the very least, for your actions on softwood lumber, and I expect there will be bipartisan support on whatever action you take on behalf of the dairy industry as well. I mean, you appear to be laying the groundwork here for your notification to Congress that you would like to renegotiate NAFTA. Are we correct in reading it that way, that you're kind of paving the pathway here, or at least greasing the skids?
SECRETARY ROSS: Well, the President announced a couple of months ago that he wanted renegotiate NAFTA. And as I say, it's been stalled in the Congress, because to do it effectively you really need to use the Trade Promotion Authority. I think you're aware of the benefit that gives, which is when it comes to the floor of the vote, it's an up or down vote; they can't amend the deal. So it makes it much more probable of getting a deal approved. That’s the practical significance of it.
Q So there’s these very public actions that you’re taking in being here in the briefing. Is that sort of paving the way for promoting that authority?
SECRETARY ROSS: Well, we hope to get as soon as possible the Trade Promotion Authority granted. Only Congress can do that. And so we’ve been consulting with the staff. I’ve met I don’t know how many times -- quite a lot of times, both with Ways and Means and with the Senate Finance Committee. And we hope that with the Lightheizer confirmation, that will remove that impediment.
Q Mr. Secretary, on India? A follow-up on Goyal’s question?
SECRETARY ROSS: I’m sorry, I couldn’t hear.
Q Do you favor a free trade agreement with India? As you said earlier, there isn't one between the two countries right now. Do you favor a free trade agreement with India?
SECRETARY ROSS: Oh, any pending trade events with India? Is that the question?
Q Free trade agreement.
Q Free trade.
SECRETARY ROSS: I don’t believe that there have been any serious discussions with India of late on the topic of a free trade agreement, but there’s no inherent negative attitude on our part relating to that.
Q Mr. Secretary, you're going to have an announcement on Thursday that you'll do something similar with aluminum that you did with steel last week in terms of initiating investigations into potential aluminum dumping into the country. Could you talk a little bit about that?
SECRETARY ROSS: Well, I think the right time to talk about executive orders is once they’ve been issued.
Q Mr. Secretary, this is a high-profile action, in keeping with -- there’s a precedent for similar action in the past. Is there a risk that this could provoke retaliation on the part of the Canadians and we could see a trade war between the United States and Canada?
SECRETARY ROSS: Well, I know that that would be a stimulatory thing for all your readership, but we don’t think that’s going to happen.
Q So you think this is isolated, this is dairy and softwood?
SECRETARY ROSS: We think so, and we certainly hope so. And we look forward to constructive discussions with the Canadians as we get into NAFTA.
Q You don’t anticipate any retaliatory action on the part of Canada?
SECRETARY ROSS: It’s totally Canada’s decision what they’ll do. I’m not aware of anything that we’ve violated, so I don’t know what it is that they could do that would be a legitimate action.
Q What if we passed a border adjustment tax? What if that were part of the tax reform package?
SECRETARY ROSS: Well, as I understand it, there will be some word on the tax reform package from the people who are working on it, so it would be better to address that question to them.
Q While we have you, Mr. Secretary -- (laughter) -- of 3 percent GDP growth, is that a fair assessment? Is that something that is realistic? Do you believe it’s realistic?
SECRETARY ROSS: Well, I would hope that the growth could, over time, get to be better than that. President Obama is the only President in many, many, many, many that didn’t have at least one year of 3 percent growth. And with all the initiatives that we’re doing -- the regulatory reform, the trade reform, the tax reform hopefully -- and unleashing energy, there’s no reason we shouldn’t be able at least to have that if not beat it.
Q Mr. Secretary, you mentioned cars. Who is dumping cars to the United States? Which countries --
SECRETARY ROSS: No, I just used that as a figure of speech.
Q Mr. Secretary, finally --
Q Who’s dumping cars to the United States?
Q He said it was a figure of speech.
SECRETARY ROSS: I just said, it was a figure of speech.
Q Mr. Secretary, what happened between the press conference with Prime Minister Trudeau, when the President said he would only be “tweaking” the relationship, and this decision on softwood lumber? What changed?
SECRETARY ROSS: Well, first of all, this is not a presidential decision to do the softwood lumber. This was a decision that arose from a trade case that was underway. So it was a normal decision. So I don’t think it has anything to do with the personal relationship between Mr. Trudeau and the President.
Q Mr. Secretary, finally, if you or the President have any faith or trust in WTO?
SECRETARY ROSS: Well, WTO is a whole different subject matter. We do have some questions and some concerns about it. There will be a WTO meeting coming up in the next several weeks, and what will come out of that will come out of that.
Q Mr. Secretary, thank you. In your view, should the U.S. stay in the Paris climate agreement or withdraw from it?
SECRETARY ROSS: Well, now you’re really getting outside my area. (Laughter.)
Q You’re a participant in those discussions.
SECRETARY ROSS: It’s really outside my area. I’m having enough difficulty dealing with the trade issues rather than poaching on other people’s territory.
Q Are you concerned about the negotiations of FTA with South Korea?
SECRETARY ROSS: Well, the fifth anniversary of the South Korean arrangement, the so-called KORUS, comes up I believe on May 4th or May 5th, something like that. So that would be a logical time to think through whether there was something to be done or not.
Q And do you think softwood lumber might get Michael Flynn’s name off the front pages?
SECRETARY ROSS: Is Michael Flynn now a trade issue? I wasn’t aware that he was. (Laughter.)
MR. SPICER: Thank you, Mr. Secretary.
Q Mr. Secretary, here’s one more way out of the box for you.
SECRETARY ROSS: Oh, well, thank you for that.
Q If, in fact, the next president elected is Marine Le Pen in France, who is not at all for continuing the EU, how would that affect the relationship with France and the EU?
SECRETARY ROSS: That’s such a hypothetical question that I find it very difficult --
Q Well, it’s either she or Monsieur Macron.
SECRETARY ROSS: Well, I think let’s wait for the French run-off election. Let’s see who’s elected. Let’s see what actions they take. And then we’ll be in a position to make a reasoned response to the question.
MR. SPICER: Thank you, Mr. Secretary.
Q Come back any time.
Q You’re always welcome.
MR. SPICER: That doesn’t make me feel too good.
SECRETARY ROSS: What did they say?
MR. SPICER: They said come back anytime.
Q You’re always welcome, Mr. Secretary.
MR. SPICER: He is always welcome.
Q It was a pleasure.
SECRETARY ROSS: I’m glad you’re out of questions because I’m out of answers. (Laughter.)