Ross Says He Wants More Information on Cuba and is Pro Trade

Commerce Secretary-designate responds to trade policy questions

Saying he does not have a “firm view” on the US embargo on Cuba, Commerce Secretary-designate Wilbur Ross told Senate Commerce Committee members today that he would like to become more educated on what he termed a complex issue.

Ross was asked whether he would support ending the US Cuba embargo or would recommend rolling back steps the Obama administration has taken toward normalization. In response to a question from Sen. Amy Klobuchar (D-Minn.) Ross said he has no opinion on whether the US should roll back the Obama administration’s easing of US embargo travel and business restrictions against Cuba. Ross said his Cuban-American friends are divided on the issue, adding that he has never been to Cuba. Klobuchar supports lifting the embargo.

Ross reaffirmed that the North American Free Trade Agreement (NAFTA) between the US, Mexico and Canada will be a “very, very early topic” for the incoming Trump administration. Sen. Tammy Baldwin (D-Wis.) pressed Ross on ending “Buy America” provisions in NAFTA that allow Canadian and Mexican companies to be treated like American companies in bidding on US government projects. Ross said “all aspects of NAFTA would be put on the table” in a Trump administration.

Ross also said it was easier and quicker to negotiate bilateral trade deals as opposed to multilateral trade deals such as the Trans-Pacific Partnership (TPP). He said that after delving into thousands of pages on the TPP text, he found that parts “were not as advertised.” In particular, he said he was unhappy with rules of origin on cars that could have TPP countries make car parts with materials from non-TPP countries that would be subject to low tariffs.

Ross said that he will work with President-elect Donald Trump to negotiate trade deals that are “sensible” and take advantage of the US trading partners’ desire to sell to Americans to ensure “fair trade.”

“I am pro trade. But I am pro sensible trade, not trade that is detrimental to the American worker and to the domestic manufacturing base,” Ross said before the Senate’s Commerce, Science & Transportation Committee, which will consider his nomination.

Ross said he views the Commerce Department’s authority to self-initiate dumping and subsidy cases as a useful tool. “I’m an activist,” Ross told the panel. He questioned on the topic by Sen. Gary Peters (D-Mich.), who complained that the authority has seldom been used by Commerce. Ross said the authority to self-initiate is particularly useful for small companies that lack the resources to compile the necessary data to bring a successful case. He also said that the duration of dumping and anti-subsidy cases should be shortened.

Ross’ role is expected to be expanded widely for him to work with other key trade officials in the Trump administration. Trump has said Ross, the designated National Trade Council Director Peter Navarro and US Trade Representative choice Robert Lighthizer will be responsible for setting trade policy for his administration.

“I’ve made my livelihood for over five decades dealing in international commerce,” Ross said. “I think I’ve probably had more direct experience than any prior Cabinet nominee has had with unfair trade in the steel business, in the textile business, in the auto parts business and other sectors.”

Ross’ net worth is estimated by Forbes to be about $2.9 billion. He made his fortune in private equity, buying distressed companies and overhauling their operations before selling them at profit margins. Ross formed his own private equity firm in 2000 with $440 million in investor money. In the early 2000s, he acquired the factories of Pennsylvania’s Bethlehem Steel, Cleveland-based LTV and other manufacturers and consolidated them into a new company, International Steel Group. It was then sold to Mittal Steel for $4.5 billion in 2004.

“He is one of the greatest negotiators I have ever met,” Trump said in a statement.

Having cut deals with companies in China, South Korea and other countries considered difficult for foreign investors, Ross noted his extensive experience in dealing with international companies. “My companies have operated on the ground in some 23 countries around the world,” he said.

“I’ve also been in the middle of complicated situations in our domestic manufacturing sector and being subjected to some of the bad trade activities of other countries, both in terms of non-tariff trade barriers that some countries impose on us and state subsidies of foreign exports coming into the United States,” Ross said.

Regarding a 35 percent tariff proposed by President-elect Donald Trump, Ross said it was a “complicated issue” whether it would be best to impose a “flat tariff on everything” or target tariffs to individual situations. He said tariffs “play a role as a negotiation tool and, if necessary, to punish offenders who do not play by the rules.”

China’s steel overcapacity is resulting in low-priced steel being dumped, Ross said. He called China a protectionist nation that talks about free trade but uses tariffs and various policies to block US products.

Ross noted that additional steps should be taken to ensure that unfair trade duties are collected, saying billions have gone uncollected. “That kind of thing has to be fixed,” he said.

Sen. Bill Nelson (D-Fla.) and Chairman John Thune (R-S.D.) praised Ross for notifying the committee of a problem with one of his domestic staff. Ross said in rechecking the immigration status of his home employees he discovered that one employee who had provided documentation in 2009 could not provide it in 2016. The person was fired, he said.

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