During a Senate Finance Committee hearing on Tuesday, Sen. Sheldon Whitehouse (D-RI) spoke about the harmful effect that tariffs may have on small businesses that rely on trade with Canada.
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NewsTranscript
00:00Senator Whitehouse.
00:03Thanks.
00:04Thanks, Ambassador Greer, for being here.
00:08Just to sort of frame our conversation, tell me what a negative externality is.
00:13This is something you and I like to talk about.
00:16Yes, we do.
00:17This is a situation where you have a foreign country where perhaps they have actions such
00:22as poor environmental regimes or lax labor laws, and they don't bear the cost of that.
00:28Instead, they send their goods that are the product of these processes where they have
00:32lax regulatory regimes.
00:34They send it here, and we end up bearing this.
00:36They externalize these negative externalities to us, and we have to bear it, and our workers
00:40have to bear it, and we don't compete on a level playing field.
00:43So two things are wrong with this.
00:45One, the customary negative externality is pollution, and to the extent, for instance, on an issue
00:53I've done a lot of work on in bipartisan fashion, plastic in our oceans.
01:02Now it's in our drinking water.
01:03It's in breast milk.
01:04I mean, we've really gone down a very weird pathway with respect to plastics.
01:11If China, for instance, is responsible for dumping 60 or 70 percent of the plastics into the Pacific,
01:19then that's a harm to us.
01:22Correct?
01:23Yes, I agree.
01:25Because it's a commons, the ocean, and we suffer from that.
01:29And then, if the Chinese company is exporting their goods to the U.S., and that Chinese company
01:36has a lower cost for its product because it doesn't have proper pollution control with
01:43respect to plastic, and the U.S. company does, then that's an unfair trade imbalance.
01:50Correct?
01:51Yes, I agree with that.
01:53So two things are wrong when we get into the situation of foreign countries allowing pollution
02:01that our companies pay to prevent.
02:04That's right.
02:06And that's an appropriate place for tariffs to be deployed to offset that trade imbalance
02:14and help protect the commons from this particular tragedy, correct?
02:20I think trade action can be appropriate, and when the president announced his reciprocal
02:24tariff regime last Wednesday, he specifically referred to pollution by other countries in
02:29his speech.
02:30You may not have listened to it, but you may want to go back and listen to that part because
02:32that's very true, and I agree with you.
02:34Well, it might be the only place in which the administration shows the slightest interest
02:39in pollution, so good for that.
02:43The issue of plastics is, I think, a pretty significant one.
02:50Again, there's been a lot of bipartisan interest.
02:53I even went up to the Oval Office during Trump One to have one of my bills signed by the president,
02:59and he gave a very animated riff on Asian countries polluting our beautiful oceans and how it comes
03:07ashore very often in Alaska by the ton along their beaches.
03:13So I hope this is an area we can continue to work together.
03:17And in particular, I hope that you'll sit down with me and Senator Cassidy on legislation
03:23that we are working on.
03:25Will you give us that meeting?
03:27Senator, I'll take any meeting with you that you would like to talk about this issue.
03:31And I'd like to also let you-
03:32Great.
03:33We'll sit down with Senator Cassidy's team and have a conversation there.
03:37The other thing I wanted to flag for you is that you pretty well successfully deflected
03:43all of Senator Bennett's questions about what the immediate impact looks like in the short-term
03:49pain for the long-term gain.
03:52I just want to flag for you one issue that is very important to me.
03:56Rhode Island is a small business state, right?
04:01We don't have a whole lot of big mega-corporations there who can balance things and move things
04:07around.
04:09Canada is our largest trading partner.
04:11We have companies who fill an important niche in the global supply chain, and particularly
04:18in American companies' supply chains, because they get something from Canada, or let's say
04:25China, it could be, but Canada is our major trading partner, and they process that thing,
04:31and then they put it into the supply chain for the larger corporate entities.
04:39It's their business.
04:42That's all they've got.
04:45So if we're not looking out for these small businesses that are actually going to have
04:49to lock their doors and close the shutters and fire their employees and go out of business,
04:56I think you've missed a huge hole in the problem that these tariffs have created.
05:03If all you're listening to is the big mega-corporations who can move things around the world and have
05:07the resources to dodge these effects, you're not getting the straight story.
05:13I think in every one of our states there are going to be small businesses that occupy a
05:17niche in which trade is an important factor and that are going to go bust because of these
05:23tariffs.
05:24And I urge you to look out for those businesses because I don't think they're getting their
05:27voices heard at all.
05:29So, Senator, I've talked to you about this.
05:33I've talked to Senator Hassan about this and others.
05:36One thing I asked my team to do last week was to convene a meeting of a, I have a trade
05:41advisory council for small business.
05:43I've asked them to convene that meeting.
05:45I've connected with the Small Business Administration.
05:47They have an international trade desk there.
05:49I've talked to my, I have an office that also deals with small business because I do want
05:52to hear it.
05:53I think it's important that we hear it because they don't have the same voices in Washington.
05:56I will say right now, Canada and Mexico, things coming from Canada and Mexico that comply
06:00with the United States-Mexico-Canada Agreement come in duty-free and they continue to do so.
06:04If they follow the rules, if they don't follow the rules they're trying to put in Chinese
06:07stuff that's going to be tariffed, but if they follow the rules they're going to be getting
06:10the duty-free treatment they're due.
06:11Well, a small business that has gone broke is not very amenable to a meeting.
06:16They don't exist any longer.
06:18Senator Hassan.
06:22Thank you Mr. Chair and Ranking Member.
06:24Good morning Ambassador Greer.
06:25Thank you for being here.