Advancing National Security through Commercial Diplomacy

Committee on Foreign Affairs will come to order. I would ask everybody to rise and join me in reciting the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. Welcome everybody. The purpose of today's hearing is to discuss the department's progress in changing the institution's culture, putting American business and protecting American industry

Thank you, Chairman Mask. I'm happy to offer opening remarks. Today, this hearing focuses on commercial diplomacy, which the President's national security strategy puts at the tip of the spear of our foreign policy. We will hear how the State Department, through the leadership of the Under-Secretary of Economic Affairs, deploys the bureaus and offices of economic statecraft to support American businesses abroad, protect American industry at home and advance our national security interests. For too long, we assumed that global markets would naturally align with US interest. That assumption has proven false. Our adversaries have weaponized trade, investment, supply chains, and technology to undermine American industrial capacity and expend their influence. As the President has said repeatedly, economic security is national security. Whether we are talking about enforcing sanctions, securing critical mineral supply chains, building new semiconductor manufacturing f- capacity, expanding energy exports, or strengthening transportation networks, these priorities are about protecting America American workers, businesses, and our strategic position in the world. Under President Trump's leadership, US foreign policy is guided by a clear principle, American strength, commercial, industrial, technological, is the foundation of American diplomacy abroad. Today, economic policy is not separate from foreign policy, it is at the heart of it. Last year, this committee led a State Department authorization process to evaluate reforms ensuring the department has the expertise the structure and leadership that is necessary to execute that agenda effectively. Many of those provisions are now law. We will continue pursuing additional reforms, especially those that empower the bureaus and offices under Mister Helberg's purview. Any reform must meet a simple test. Does it make the United States stronger, safer, more prosperous? The State Department, and particularly the so-called " E-family", plays a critical role in this effort. Its global diplomatic footprint provides leverage no other agency possesses. As we continue our oversight, the committee will examine whether returning the US foreign commercial service to the State Department and strengthen our commercial diplomacy regime, re-invigorate a neglected FCS, sharpen accountability, and better align economic tools with foreign policy objectives. That influence must be matched with clear priorities and measurable accountability. Since assuming his role last fall, Under Secretary Jacob Helberg has emphasized supply chain uh security, allied coordination, and competition on critical and emerging technologies as core priorities. Earlier this month, he helped convene the twenty twenty-six Critical Minerals Ministerial, bringing together fifty-four nations to advance more secure and diversified supply chains. His PAX silica initiative, focused on securing the full stack from energy and critical minerals to advance manufacturing and next generation technologies reflects the type of integrated economic strategy this committee expects to see from the department. As Congress, we have a responsibility to ensure these initiatives endure beyond any single administration. That is why I, alongside with my ranking member, um, Ami Berra and Chairman Brian Mast, we introduce the bipartisan Dominance Act to make the United States the partner of choice for countries seeking secure, diversified and resilient critical mineral supply chains. Breaking China's chokehold on critical minerals will not happen overnight. It will require sustained bipartisan resolve, here in Congress and in close coordination with the administration. So I look forward to working with you, Mister Helberg, to ensure that your efforts represent not just the progress, but decisive step forward, ending China's control over the strategic supply chains. Let me be clear. American economic strength is the foundation of the American leadership abroad. Diplomacy should reinforce US competitiveness. and support American workers and businesses and strengthen our long-term industrial and technological base. The department must be empowered to engage and negotiate from a position of strength. That means standing up to unfair economic practices, enforcing the rules, supporting US energy and exports, and ensuring that American economic power is used deliberately and strategically. We need to ensure our foreign policy institutions are aligned with the realities of the global competition. I thank Under Secretary Helberg for joining us today, and we look forward to discussing how economic statecraft is being implemented and what Congress can do to ensure it delivers true results to the American people. With that, I yield back.

Thank you, Representative Kim. And I don't know if this is because uh people from Rhode Island deal with snow better than people from New York, but offering an opening statement for the minority side is Representative Amo from Rhode Island. So you are recognized.

Thank you, Mister Chairman, and uh I'm grateful that the people of Rhode Island uh allow me to be here while they go through three feet of snow uh and and are doing their best to recover from that. Uh but uh Mister Chairman, thank you for organizing this hearing. Uh despite this committee's oversight role over the State Department, we have had frankly very few administration witnesses appear so far this Congress. So I am glad to have the Undersecretary here for this critical hearing. Mister Helberg, uh thank you for testifying today and welcome. If you ask most Americans what the core of President Trump's foreign policy approach is they probably give you one word, tariffs. And to the the President's credit, he's been consistent on this. He ran on tariffs, he imposed tariffs on our rivals and even uh more so on our closest allies and partners. Unfortunately, as the Supreme Court ruled on Friday, he has done so illegally in an end run around Congress. And he has done it at the expense of our diplomatic relationships. But the costs have been most disastrous for hardworking Americans. American families have shouldered the burden of Trump's tariffs through higher prices bearing ninety percent of businesses' increased import costs. Trump's tariff schemes cost American families seventeen hundred dollars last year. And American farmers and businesses have been forced to lay off workers as the economy has seen the lowest rates of employment growth outside of the res- recession years since two thousand and three. And all that pain for what? Did it improve America's trade deficit a flat no. Despite the president's promises, America's trade deficit only decreased by point two percent last year. And we have not seen the massive onshoring of companies back to the US, that he pledged either. The US manufacturing sector lost seventy thousand jobs in twenty twenty five, but the president remains dead set on finding new ways to tariff. The worst part is the administration knows very well that the pain it's sweeping uh it's sweeping tariffs have caused on the American people. Why else would they backtrack and issue countless exceptions, only adding to the chaos and economic volatility for American companies and consumers? Because they know tariffs are unpopular, House Republicans resorted to procedural hijinks to avoid voting on the Trump tariffs for nearly a year. We finally forced a vote earlier this month on ranking Meeks uh, m- ranking member Meeks' bill to stop the carrier tariffs, on which some of my colleagues across the aisle voted uh, yes. But the vast majority of Republicans voted to protect Trump's tariff regime at their constituents' expense. Let's be very clear. The President's America First policies, his tariffs, his gutting of the State Department and USAID, and his tarnishing of NATO and other allies have left the United States weaker and more isolated today than we have been in decades. This administration has disrespected, lectured, coerced, and ignored the very allies we need to overcome complex global challenges, including the strategic competition with China. Now, I was glad to see the administration recently unveiled promising new initiatives to bolster critical minerals and AI supply chains after China retaliated against the president's trade war with crippling rare earth uh uh export controls but multilateral initiatives like this will not succeed so long as this administration continues to take its allies for granted and goes out of its way to disrespect them I worry that if we don't course correct soon the damage will in fact be permanent. If you continue treating your allies like your adversaries, they will eventually be forced to respond in kind. Our allies are already hedging, accommodating the president in the short term while also securing new investment and trade deals with China. It's no surprise that the Canadian and British Prime Ministers visited China last month for the first time in nearly eight years. It's also no surprise that our oldest allies are discussing a Canada-EU Pacific trade bloc that would exclude the United States. This is a clear case of cause and effect. This is America first in action and it will leave America less pr- prosperous and less respected on the world stage. America first is America alone. The American people deserve answers on how the administration's policies are affecting our global standing alliances, national security, and economic prosperity. So I look forward to the discussion today and I yield back.

Other members of the committee are reminded that opening statements may be submitted for the record. We're pleased to have the Under Secretary of State for Economic Growth, Energy and Environment, Jacob Helberg, before us today. Your full statements will be made a part of the record, and I'll ask that you keep your spoken remarks to about five minutes in order to allow time for member questions. Under Secretary Helberg, you are recognized.

Thank you. Chairman Mass, Ranking Member Meeks, and members of the committee. I did not come here today to litigate trade data or walk you through compliance spreadsheets. I came here to speak to you about national survival. Thank you for the opportunity to testify. I am Jacob Hallberg, President Trump's Undersecretary of State for Economic Affairs, serving Undersecretary Rubio. The nation that controls the industrial foundations of artificial intelligence will lead this century. The nation that doesn't will depend on those who do. That is why the United States has built Paxilica. an economic security coalition for the AI century, designed to secure the supply chain infrastructure that underlies national power. We have built this coalition with Japan, South Korea, Singapore, Israel, the UAE, the UK, Australia and Qatar, along with essential partners like the Netherlands and Taiwan. Just last week, we welcomed India into the fold. We are entering an an economic era that will reorder wealth and power favoring nations that can build and scale free from coercive dependencies on adversarial choke points. In the first Industrial Revolution, the newly industrialized surged ahead. Historians called it the great divergence. The global economy is now on the foothills of another similar divergence driven by AI. And the numbers show the slope. PAC-silica members are growing more than three times as fast as their G-seven peers, averaging three to four percent of GDP growth per year since the release of Chad GBT, compared to one percent for G seven countries. China has placed the AI revolution at the heart of its new five-year plan, enhancing innovation at home while aggressively competing for market share abroad. American technological leadership requires supply chain security. Paxillica is our strategy, and we have wasted no time implementing the principles adopted last December. Our efforts focus on two fronts, execution and alignment. First on execution, we begin with the arteries of global trade, logistics. In his inaugural speech, President Trump made clear China's control of the Panama Canal was entirely unacceptable to our national security. I'm pleased to report that last month the Panamanian Supreme Court invalidated China's control, paving the way for a buyout by BlackRock. Building on this success, I have directed my office to conduct a strategic review of all logistical corridors with prior State Department involvement, including the Libido corridor, the Andes Atlantic corridor, and the Luzon corridor in the Philippines. We will engage PAC-Seleca partners to expand and modernize these corridors by marrying existing infrastructure with new technologies delivering speed, scale, and certainty to suppliers from Tokyo to Tel Aviv, from Singapore to San Francisco. Next, the muscle, industrial production. Industrial capacity is not nostalgia, it is the muscle of sovereignty. Thanks to Secretary Lutnik, Secretary Besson, and Ambassador Greer, America is re-industrializing. My office is a force multiplier, facilit facilitating partnerships with the world's largest industrial companies, and focusing economic diplomacy on scalable mineral projects in the United States and allied nations. And finally, the cognition of modern manufacturing, core and edge AI infrastructure. The American AI exports program is a whole of government effort to share the benefits of American AI worldwide. Working with the White House, OSTP, Commerce and EXIM, we are scaling this program to meet the explosive demand for trusted core AI infrastructure. And last week, we launched a concierge service to provide PACSILICA members with consultative support in adopting American technology. Recognizing that much of the world interacts with AI at the edge, through smartphones, not expensive data centers, we also launched a competitive process to award up to two hundred million dollars in foreign assistance for secure low-cost devices running on the American software ecosystem. Second, on alignment. PAC-Silica will deepen coordination in three policy areas, protection of critical infrastructure and sensitive technologies, alignment of market incentives and anti-dumping practices, and the promotion of a pro-innovation approached AI policy. Earlier this month, Vice President Vance and Ambassador Greer outlined the contours of a preferential trade zone for minerals and and at the Critical Minerals Ministerial a major effort ahead for anti-dumping and market incentive coordination. Last week, we signed the US-India joint statement on AI opportunity, a pro-innovation blueprint against efforts by other nations to weaponize global governance as a concept into an instrument of control and wealth extraction against American companies. And yesterday, the UAE's largest AI company, G forty two, announced plans to pilot a common operating picture framework that protects sensitive American technology through cryptographic tracking and real-time verifications. If successful, this framework could scale across the PAC silica ecosystem. We are moving in trump time, making progress on all fronts, all at once, and expect to see early results before the end of the calendar year. Consider what this coalition has already accomplished that traditional diplomacy could not. Qatar and Israel now sit inside the same economic framework, a new road toward normalization built not on shared ideology, but on shared supply chains. That is proof that Pax Silica works. Under President Trump's leadership, America is not waiting for the new divergence to arrive. We will shape it and set the terms. Thank you. I look forward to your questions and welcome your partnership in moving Paxton Lincoln from architecture to enduring advantage for our people.

Thank you, Under Secretary Helberg. We're now going to recognize members for about five minutes of questioning, alternating between Republicans and Democrats. I'm gonna begin by recognizing uh Representative Kim.

Thank you, Chairman, and thank you again, Under Secretary Helberg, for joining us today. Right here. Good morning. Um, the Commerce Department has proposed cutting the staff of the FCS or uh, you know, by more than half in fiscal year two thousand twenty six. Over the past two decades, long before the creation of Doge, the number of staff in commerce's international trade agency which includes FCS has fallen by a third from two thousand seven to two thousand twenty five and additional personnel reductions are on the table the steady decline in personnel and funding for FCS is inconsistent with what was argued when FCS was pulled out of the state and moved to commerce in nineteen seventy nine some members of the committee wanna strengthen the US commerce uh diplomacy and are considering whether to move the FCS back to the State Department. So first question to you is what are the pros and cons of moving the FCS to state in your opinion?

Thank you for the uh the for the question, Congresswoman. Uh last year before my swearing in, the State Department underwent an extensive reorg to better align its people and capabilities with its core diplomatic mission um the basic rationale steady bureaucratic accretion and ossification under administration of both parties had really distracted our our department from its core mission, which consequently undermined its effectiveness and relevance. Ultimately, the department's reorganization streamlined department reporting lines and optimized our workforce and drove efficiencies in our operations. Currently, we have moved incredibly fast to achieve uh a record number of peace deals, as well as bilateral agreements for critical minerals. We're very satisfied with the results that we're making. Um, if the Congress chooses to pass reform through both house, through both chambers to undertake a reorganization of the department, and build on the work that we did last year, that is a certainly a consideration that I'm sure the White House would be happy to uh engage with you on.

If, let's say, the FCS does not come back to their state, what additional authorities or tools do you need to build state's commercial diplomacy to the level that is necessary to fulfill President's national uh security strategy?

So we already have um economic officers dispatched at embassies. Um we we do find those resources helpful, so we have used, I'll I'll give you one example, and we launched last week a chip concierge service to turn our economic force dispatched embassies into business development officers that help promote the adoption of American technology. Um, with that being said, so far, um, I've only been sworn in for about four months. I can't say that I've encountered significant uh limitations based on limitations of headcount uh but I'd be happy to work with you to make sure that the objectives you're trying to advance, are actually getting satisfied.

Thank you, thank you. You know, in addition to overseeing the E family, my subcommittee has jurisdiction over the US uh International Development Finance Corporation and the US Trade and Development Agency. And I also serve on the House Financial Services Committee that oversees the Axiom Bank uh which we're in the process of reauthorizing. All of those agencies can be tools in our effort to diversify critical mineral and energy supply chains away from China. Uh so who in the administration is the traffic cup for making sure each agency's critical minerals initiative is coordinated and not duplicative and in what regard how do the mineral security partnership well at the state and of course we have project vault, edX and bank and the DFC's increased authority to invest in critical mineral projects align together.

Um thank you very much for the question. Inter-agency coordination is incredibly important and the National Security Council runs a very rigorous inter-agency coordination process. Um with respect to the the the mineral security partnership, one of the deliverables that was outlined at the last critical minerals ministerial was actually uh the conversion of the MSP into what has now become the forge and to which we have added a number of countries through bilateral agreements. Um, Vice President Vance and Ambassador Greer at that historic summit unveiled the concept of creating a preferential trade zone with our allies,

Mm-hmm.

um, by the establishment of a buyers club. We believe that this is the key unlock to directing f- private capital into uh the mineral refining and mineral extraction sector in a way that really is financially and economically viable. Um so we will work on a uh uh on a whole of government basis in coordination with USTR and the NSC to actually advance um this preferential trade zone concept.

Mm-hmm.

Um uh through my capacity at the State Department, I'm actually coordinating with the NSC to advance this concept uh which was primarily led by USTR through the PacSilica initiative because PacSilica countries are home to the vast majority of high-end technology manufacturers outside of China. And so we're very committed to inter-agency coordination. We try to uh maintain a balance between having an entrepreneurial approach, while making sure that there's nothing duplic duplicative and that we can leverage each other's um programs as a force multiplier.

Thank you. As you uh implement the uh the forge, their additional authorities or tools you need, please let us know. Happy to work with you. Thank you.

Happy to work with you as well. Thank you.

Representative Amal, you're recognized.

Thank you, Mister Chairman, and thanks again, Under Secretary, for being here. Uh, you're responsible for advancing American commercial interests abroad, opening markets, supporting US businesses, and strengthening our economic position. Because your role is so very important to the US's role in uh, the global economy, I wanna make sure we're on the same page with uh a few straightforward yes or no questions. Can the United States thrive in the global economy completely on its own, yes or no?

Thank you Congressman for uh your question. The United States is obviously not alone. We just hosted the one of the largest uh

So that's a yes. I I got I got limited time.

one of the largest ministerials in our department's history, with over fifty-five countries in attendance.

Great. Does the United States have economic and national security advantages that depend on strong alliances and global partnerships, yes or no?

Congressman, the United States has probably the strongest alliances it's ever had. We created the Board of Peas

Great, thank you. No, no, I'm gonna reclaim my time. Hold on.

through the National Security Council.

Should public officials ever use their positions to enrich themselves or their families, yes or no?

I'm sorry, Jim, am I repeating the question?

Should public officials ever use their positions to enrich themselves or their families?

I obviously and totally disagree with the premise of your question.

It's a yes or no.

I I it's

All right, well, well, that that's that's

with the premise of your question, you're implying improper conduct, which I obviously disagree with. There's no basis for that.

Well, I I'm sure nobody's made any money off of the dealings that are are happening right now.

There's

But let's keep going.

I'm sure the irony isn't lost on anyone.

Should our should our foreign policy be based on the profit motives of private individuals over that of working Americans or our national security?

Congressman, you're making uh an uh uh an insinuation about malintent,

I I m- Mr. Elberg, I reclaim my time.

which I again

If you can't give clear answers to these simple questions,

disagree with.

that tells me a lot. The reality is this, and I think you agreed with this part, which is we do not succeed alone. Our economic strength depends on alliances and public service i- is not a vehicle for personal gain. I believe that, I would hope you believe that too. But you seem to think it's fine the public of officials in this administration are using their positions to enrich themselves and their families. No, I didn't say that. I did not say that. Well, you didn't answer the question. You're putting, we're asking rhetorical questions and putting Here's the thing, here's the thing. President Trump's chaotic tariff policy undermines that reality. Instead of fulfilling your role as Under Secretary to stabilize our commercial diplomacy, you said that Trump's tariffs are quote "an indispensable shield" unquote, that will bring back American manufacturing.

They are.

Trump's tariffs have been declared by the Supreme Court as illegal, arbitrary, and constantly shifting. And a- after the Supreme Court made its ruling, he announced an a new ten percent global tariff and wants to go higher. That kind of whiplash makes it impossible for our allies to negotiate in good faith. And workers, manufacturers and American consumers are suffering the consequences. That's a fact. No, it's not. Recent studies, excuse me, Inflation is under three percent. a- a- I'm reclaiming my time, Mister Helberg. Recent studies have shown Americans are paying ninety-five percent of these tariffs and they cost the average household about a- a thousand dollars in twenty twenty five. And domestic manufacturing has declined under President Trump's watch. The manufacturing industry lost a hundred and eight thousand jobs during the first year of his second term. And we're gonna hear differently tonight, but those are the facts. Manufacturers in my district, the people I work for, that you work for too, are telling me that they're b- they're hurt and they're not being helped. One told me, quote, if the goal is to help bring back manufacturing uh industries and jobs to the United States, the current administration's sweeping tariff pol- policy is having the complete opposite effect. A so-called indispensable shield does not create chaos, it doesn't raise costs, and it doesn't weaken our standing with our allies. Your job as a public servant is to strengthen American commercial diplomacy, not to defend Trump's instability that makes us less competitive and less trusted around the world. Costs arising, small businesses are struggling, and our global credibility is eroding. That is the state of the union, the real state of the union that we will hear We should be hearing tonight, but we're gonna hear the opposite. We will hear some half-truths and maybe some lies. We should be pursuing a stable, strategic trade policy that strengthens alliances and lowers costs, not pushing one that creates confusion and hands leverage to our competitors. Look, I look forward to you and your role uh deciding that you're gonna stand up for the American people. To put Americans first and not America last. That is what public servants are supposed to do. I'm not trying to lecture you. But the American people are looking for more. They're demanding more. And with that, I yield back.

Representative yields back. Representative Huizenga is recognized.

Uh, thank you, Mister Chairman. Uh, sorry to my colleague, I I I guffawed when I he said he wasn't trying to lecture you. It sounded like a lecture. Uh, and I don't know about the manufacturing base in Rhode Island, but I can tell you the manufacturing base in Michigan, uh at worst has been mixed and most economists there will tell you it's been an improvement for manufacturing in michigan um so uh mister helberg i uh i i do wanna note uh that i uh gonna focus on some of the technology uh but uh i am pleased to see and to hear that you are talking about places like the panama canal uh about the luzon corridor in the philippines um i i've spent extensive amount of time in the philippines I think that frankly is one of those areas of the world that has been um not focused on enough, and the influence of what has uh happened in uh uh because of China and what they've been doing. Um, I wanna talk a little bit about your uh tweet yesterday uh that uh that you had put out, and and you had you had talked a little bit about G forty-two in your uh in your opening statement. Uh, I too have been long concerned with the security of America's crown jewels, technology deployed and how it's being deployed worldwide, especially in countries like U uh UAE with historic ties to the Communist Party. Um, that's why I'm encouraged, like you were in your in your tweet about the assurance compute framework unveiled by uh by the uh UAE-based AI company G forty-two, as part of this PAC silica. Um, could you tell us a little bit more, just unpack very quickly, cuz I wanna get to another issue, about the importance of creating saf- safeguard so the US technology fall into the hands of the Chinese Communist Party.

Absolutely Congressman, and uh thank you so much for giving me the opportunity to to weigh in on this. So, as you know, the current, the BIS rule that was ruled out in January requires exporters to meet very strict conditions, including including US third-party testing, know your customer procedures and physical security certifications, and screening of all remote access users. The reason that the G forty two announcement yesterday is significant, is because it actually sets a pilot for a potential model, on a voluntary basis for a large company, to use cryptographic tracking, uh as well as um as well as end-user verifications to track every single token, on G forty two's AI cluster. They are setting out, they agreed to build a common operating picture, that would could allow American policymakers to actually have total transparency and assurance that the the clusters in the UAE, used and owned by G-forty-two, are not being accessed improperly by uh individuals and entities that would go against um American export control rules. So it's a voluntary framework,

Well

it's incredibly uh it's it's an incredibly uh, positive and so forth.

Yep, I I I agree. That's why frankly I'm sponsoring the uh, chip security act, which would insure that our AI chips uh, can't be smuggled into places like uh, like China. Um, uh, supply ch- supply chain resilience is a key to dominating the the global economy. China understands this. Uh, they're exploiting every avenue that they can to gain an advantage over the United States and the West writ large. Uh, I was pleased to see the rollout of Paxilica, uh, which seeks to secure the supply chain of the entire AI stack. by working closely with partners and allies to protect this future defining technology. Uh, I also, uh, wanna note that I applaud the addition of India, uh, to that. Uh, they are a very, um, uh, well, it rightly acknowledges their, their geo-strategic, uh, place and significance in the development of AI. Um, can you provide insight into how Pa- Paxilica interacts with other multi, uh, uh, lateral forums such as the G seven, the quad, AUKUS. And uh where do you see opportunities to expand inter-agency cooperation?

Thank you for the question, Congressman. So the uh interesting aspect about PAC-SILECA is that it's a grouping of countries that is unique and different from the G-twenty, the G-seven, um as well as other pre-existing groupings that the US had been a part of. Um it is a grouping tailored for the AI economy. So it includes countries that actually have unique and differentiated capabilities that play make significant contributions to different layers of the AI supply chain. Um, India is probably the only country in the world that rivals China, in terms of the depth of its uh human capital and talent. It's also the world's star the world's third largest mineral refiner, um even though it currently accounts for only one percent of global market share. Um, obviously South Korea and Japan are home to uh incredibly advanced high bandwidth memory companies, as well as semiconductor manufacturing companies. The um PACS silica includes countries like I two U two and the quad, so it actually is more comprehensive. And one of the the beneficial aspects about it is we have intentionally kept it flexible. So it is a multilateral um grouping, it's a platform where we can do plurilateral work, not everything, has to include all eleven countries. So we're we're using the platform to engage countries on a bilateral basis, as well as a plurilateral lateral basis to partner with each other, as well as to partner with each other in third markets, uh, including in places like Africa, which is obviously, um, the main home of the vast majority of where where the world's, um, uh, uh, minerals currently come from.

I just returned from Nigeria,

Representative Sherman, you are recognized.

Mr. Chairman, I'm gonna use the first minute or two to deal with an issue perhaps relevant to the Middle East subcommittee and also to the rights and privileges of members of this committee. There are a number of statutes that require us they require the administration to give notices to the committee, and of course, in due course, those are shared with the ranking member and uh notices shared with all members of the committee. Um there's probably nothing more important than preventing nuclear proliferation and an important part of that is whether we agree to a nuclear cooperation agreement with such countries as Saudi Arabia. These come together because in uh twenty twenty i was able to uh uh add section twelve sixty four to the ndaa which requires that before the president even begin uh to allow congress to review it's did uh a nuclear cooperation agreement with saudi arabia he has to file ninety days in advance of the beginning of the review a statement with this committee a report and in fact it appears that a report was filed in late November. It is quite possible that this report went to you, your personal office, rather than the, uh, committee's office, in which case it would have been ineffective and the clock, uh, would not have started. In any case, no Democrat became aware of this, at least no Democrat on this committee became aware of this, until this month. Now, uh, I hope that this committee will draw the line and say that report, uh, has not been filed with the committee, at least until February. And that's when the ninety days begins. But much more important, we've gotta look at whether we want a nuclear cooperation agreement with Saudi Arabia that does not have the safeguards that we negotiated with the UAE. And, uh, that's why I hope members of this committee will cosponsor a bill that I have sent a dear colleague out on, That is the bill that Senator Rubio and I introduced in twenty eighteen. And it requires that for a nuclear cooperation with Saudi uh agreement with Saudi Arabia, there has to be an affirmative vote of Congress. So, while the procedure is interesting, uh, the substance has got to be that we need an affirmative vote. Uh, s- I think Senator Rubio was wise, perhaps sometimes wiser than secretary Rubio, and I hope that all members will join me in that effort. Uh, as to the uh statement of our witness who says that whoever uh con- uh leads in AI will lead in this century, I agree with you. But you assume it's gonna be the United States or China. Some people might bet on Europe. But your statement doesn't be start on the idea of what if an AI itself is in control. Humankind is spending trillions of dollars to make AI more powerful. Virtually nothing, I would say nothing, is being spent to monitor for and prevent self-awareness, ambition, self-direction. Uh, I have a bill uh on uh that, and I hope my colleagues will join me, eh to establish a research center to look at that. And in the meantime, uh this uh I would commend to our witness the two thousand eight hearing that we conducted in this room. uh, that I chaired dealing with, uh, AI, uh, using the non-proliferation treaty as a model for what you should be negotiating with China not uh with regard to making sure that AI is controllable. Uh, the movie industry is one of our biggest exports, and it's a multiplier because it sets the tone. It makes our other products interesting. It builds our name brand. It helps our foreign policy. It really influences and controls world world culture. And yet, our movies have to deal with a number of unfair barriers. Most importantly is in China, where only forty movies are allowed every year to be in their theaters. We could limit China to only forty electronic products or forty toys. Um, we have uh uh a situation in China, where instead of the theater owner giving half the revenue, not even half the ribbon, half the box office ribbon and no nothing for the popcorn, to the movie, to the movie maker, it's sometimes as low as twenty percent. Uh, Australia and Canada have local uh content uh uh provisions. What steps are you taking so that our trading partners will fairly treat the uh, uh, movie exports?

Thank you for that question, um, Congressman. There's uh a lot of topics that you touched upon there. Um, So on on your concerns about nuclear, that obviously falls under the the remit of my colleague, uh, Under Secretary Donato, uh, who oversees one two three agreements. Um, with respect to your comment on AI, um, our policy is we are very concerned about, um, the landscape getting quite competitive between the US and China. And so our policy is to accelerate innovation through tax incentive, energy dominance and deregulation that allows accelerating the build-out in the US?

If I if I can interrupt. My my question is humankind versus AI, not China versus the US. If the US US beats China, but AI itself is in control. Uh, as I told to one Chinese diplomat, the the machines that destroy humankind will be designed in Silicon Valley, not in Shanghai. Therefore, we win.

Uh, Congressman, I think your you're um articulating a hypothetical future where machines take control. Um what we do know today for sure is that China is racing to outpace us in AI innovation, and that the benefits of their AI progress flow directly to the People's Liberation Army. And that is a national security risk that we are not willing to to take. And so our policy is to make sure that the US government stays in the lead, By at home we want to accelerate innovation, and abroad we want to encourage the adoption of American technology.

Representative Self.

Uh, thank you, Mister Chairman. I wanna uh kinda tie, I'm over here. Here we go.

There you are.

Um, I wanna kinda tie your China expertise with our conversation today. Uh, first of all, just to comment, uh, you you mentioned that uh Qatar is now in Pax Silica and uh I represent a district in North Texas and I uh we are very concerned that Saudi money and Qatar money are are funding the Islamization of Texas. Uh so as you go about this uh just take that point back. Now, uh in your remit apparently you are responsible for reviving the defense industrial base amongst other things domestically. Um and you admit that AI includes critical minerals. So the first question is, uh, how do we deter China if they process ninety-two percent of all critical minerals today and they import seventy-three percent of their oil. And I'm going to be referring to tidal wave, uh, done by the Heritage folks, strategic exploitation and sustainment in the US-China conflict because my first question is critical minerals and oil, and then we'll move on.

And so, sorry, your your question, Congressman, was how do we deter China to do what exactly?

Yeah, if they already process ninety-two percent of all critical minerals around the world, how fast can we pare down their ninety-two percent of processed minerals, regardless of where they're mined? Start with that one.

Thank you, uh, thank you for the question. It's obviously the this fundamental, uh, challenge, uh, that our country faces that we are racing to address. Um our approach is multifold. We on the one hand are are racing as fast as possible in order to bring that number down. You're entirely correct that China processes uh somewhere in the neighborhood of ninety percent of the world's refining capacity. Um we wanna bring that number down and we're are working to do that by focusing on brownfield projects um in a multitude of different geographies. So while the Commerce Department along with USTR are focused on um revitalizing uh projects uh refining projects in the US. The State Department is supplementing those efforts by looking at and mapping out where uh the the biggest and most promising refining capacity on a brownfield basis are located and then identifying who the right constellation of partners are to deploy capital and bring those projects back online. there's refining capacity in australia there's refining capacity in india in south korea we want to expand that and we can do that on a much more compressed timeline than building refining capacity entirely from scratch the uh you you've also brought up the point about deterrence which is really key and while it's true that china controls ninety percent of the world's refining capacity the us actually china is incredibly vulnerable for its energy imports

right

And that is a point of leverage that the administration is keenly aware of. Um, obviously, the Chinese are also very much aware of that, and that is very much part of, you know, how we look at our economic deterrence posture.

OK, and uh last uh last year we held a hearing on the Bureau of Cyberspace and Digital Policy. Now under your jur jurisdiction in E, how is the positioning of this bureau improved or enhance the state's interest to advance our leadership abroad in all of these emerging technologies? Uh because it was pretty moribund, uh so tell us how you have have improved their actions.

So it's very simple, um prior administrations uh had a very government-centric approach to technology, focusing on um engaging international forums and uh focusing on uh standards and norms. Our approach is based on the premise that our innovations come out of the private sector, not the government. And so a lot of our work is geared at engaging private companies who are actually the engines of where a lot of these innovations come from. We're doing this to um secure the supply chain through off-take agreements. We're doing this to help uh better understand vulnerabilities in the map of the supply chain. Um, it is through engaging with the private sector that uh, that we are actually addressing a lot of the challenges that our technology companies face.

OK, and quickly, you've mentioned AI s uh uh several times here. Uh, w- when you match AI with quantum computing, people seem to think that will be the keys to the kingdom. Can you address quantum computing with AI?

So, let me just with saying that quantum computing is probably one of the most advanced fields of scientific research that in all honesty uh less than a hundred people in the world truly understand um with that being said uh i i would agree uh that the combination of the power of quantum computers combined with the capabilities of artificial intelligence um is incredibly potent and would really be unlike anything we've experienced. Uh, and so I I agree with that statement.

I recommend you follow it closely, Mister Chairman, I yield back.

Thank you, Mister Self. Representative Barra.

Thank you, Mister Chairman. Um, thank you for being here, Secretary Helberg. Um, I'm gonna ask about a piece of legislation that we passed out of this committee in a bipartisan way um that created the US Foundation for National Security and Counterterrorism also was led in the Senate by Se- Senator Graham and and Coons. Um, it created a public-private partnership that leverages the private sector and philanthropic funding to make our federal dollars go further in preserving vulnerable protected areas in allied and partnered developed countries. It'll fall under your bureau. Um, initial steps have been taken, um, but it isn't quite meeting the, um, statutory guidelines, um, to fully launch this, um, piece of legislation. And again, it's, it should fit with the, um, the priorities of secretary um Rubio as well as administration in creating that partnership. You've only been on the job for for four months so I won't ask you to to um give me the the full details but what I would love is um if the committee either at the staff level or at um at your level could just give us a an update to the committee to the members of progress and if there's anything that you need on our end again non-partisan you know a a good leverage a good bill so would love to to get that feedback and and get a sense of how implementation's going.

Thank you very much, Congressman. So, um, I am tracking the implementation of that bill. It's uh, I know it's an issue that, um, Senator Graham and Senator Coons care a great deal about and, um, received bipartisan support. Um, my understanding is there is still some ongoing discussion about who the right nominees are, for the staffing of this new foundation. Um, I'd be happy, uh, you know, the the selection of nominees is obviously um rests with authorities that are outside of the State Department's purview and uh resides with the President's choices out of the White House and the Presidential Personnel Office. Um, I'd be happy to um follow up with my colleagues at PPO as well as engage your office to uh make sure that the questions that you raised um you know,

What

that we can provide answers to them.

Wonderful, thank you. Um, also last year I introduced the bipartisan uh Mineral Security Partnership Authorization Act. Um, that's part of the dominance act that um chairwoman Kim um discussed, non-partisan and so forth. Um, earlier this meant that the critical minerals um ministerial secretary Rubio announced the f- forum on resource geostrategic engagement or um forge, as a successor to the MSP. Um, outside of broadening the coalition and bringing additional countries in, can you briefly give us an update on how Forge is gonna differ from the MSP again, um, and what that looks like?

Absolutely. So, um, Forge includes a number of different new members, now, so the membership, the composition of the membership is slightly different, but the, um, the, the most important difference is the introduction of the preferential trade zone concept. Um, which is really the landmark concept introduced by Vice President Vance and Ambassador Greer at the the Critical Minerals Ministerial earlier this month.

So, just expanding on that, for the peripheral frontal trade zones, will that be housed under um your bureau or will that be under USTR or a combination of of both?

So trade negotiations are really led out of Commerce and USTR primarily. Um, Um so ultimately, you know, they tend to be the ones leading those discussions. Um with that being said, uh my wor the work of my bureau will be including them and coordinating with them very closely to advance the preferential trade zone concept, through the PAC silica framework. So we wanna make sure that all of the the world's biggest manufacturers of the most strategic technologies are actually signed on to this this preferential trade zone concept, uh because those are the main off-takers for the world's minerals.

And then briefly just following up on um a line of questioning that congressman Self had, recently Chairwoman Kim, myself, Congressman um Olszewski went down to Peru to look at some of the US company mining operations down there. Um obviously there's plenty of um rare earth elements, critical minerals around the world um congress himself rightfully suggested there's a choice point on on the refining capacity. That still all largely gets sent to um to China. Um the Chinese also undercut the market in terms of um you know how how they approach this so again I'm heartened to see that prioritization of creating redundant refining capacity. May not be in the United States but if places like India, Malaysia, other parts can develop that, we will have other places to send. Very good.

Uh uh absolutely. Um the one of the um so one of the interesting things about Pacsiolica is that because it's home to um some of the world's largest investors um and by that I I include not just sovereign wealth funds but also large companies that deploy capital in lots of different places is the opportunity to partner with them in third markets. And so you're completely correct that uh geographies like Malaysia, Indonesia, Vietnam are already home to quite a bit of uh refining capacity. Obviously it's nothing compared to China, but uh as I mentioned earlier, the presence of brownfield projects is really the main platform that will allow us to actually uh bring our uh dependency rates down quickly.

Right. Thank you. Representative Boylan.

Thank you, Mr. Chairman. Um, welcome, sir. Four months on the job, you're in front of us, that's good good on you. Thank you for your work and your uh explanation and what you're doing with the Paxillica as well. Uh your opening statements kind of remind me of what the President is also focusing on, and that's how important the Indo-Pacific is on economic and geopolitical uh background in the twenty-first century. Uh we understand Deputy Secretary Landreau is currently in Honolulu there for a prosperity summit talking about investments and security in the region. Uh of course we have our second island chain. Uh, two, that's also very important to the United States. The federated states are Micronesia, Palau, um, and, uh, Marshall Islands as well. And Guam is part of that second island chain, too. Uh, we have US aid i- is, is quite helpful, but in many of these islands, uh, Chinese aid exceeds the US. And now we're, uh, faced with, uh, another, looking at the rare, rare minerals and get, where are we gonna get that next? And it's going into the deep-sea mining. So this is really a controversial issue uh for the Pacific Islands. In fact, all all the US territories have voiced opposition uh to deep-sea mining as well as Palau and Fiji and the Federated States of Micronesia, uh, Tavelu and Vanu- Vanuatu. So, uh, Mister Hober, how does the department seek to deepen their cooperation with the Pacific Island countries? and commercial diplomacy enough to counter Chinese Chinese advancement in the region? And uh is the department leveraging its cooperation with MCC and DFC enough in this region?

Thank you, Congressman. Um one of the um one of the notable uh approaches of this administration has actually been to engage a lot of countries that Um historically the United States and and prior administrations have tended to overlook. Um one of the ways in which that's reflected is we have forged bilateral deals with countries like Kazakhstan with Armenia and Azerbaijan. Um I have personally met with um leaders from the Cook Islands, the Marshall Islands, um Palau. So we are engaged with Pacific Island countries. Uh based on my conversations, I'm not tracking significant to deep sea mining. In fact, a lot of them seem to be quite open to it. They um they did note obviously the presence of certain environmental groups that have concerns about deep sea mining. But um the the ones I've spoken to s really seem to see this as an economic opportunity and a path to economic development. And and they'll be very quick to point to that China's obviously all in and racing to um exploit deep sea minerals without asking for anyone's permission, uh sometimes in violation of the sovereignty of some of these Pacific island countries. So we um uh one of the president's very first executive orders after being sworn in was on deep sea mining. And so we are very much looking at um at the implementation of uh that executive order, uh both through partnership uh through partnerships with Pacific island countries, as well as by engaging private uh american private companies who are actually developing the kind of cutting edge technology needed to operationalize this. um there's a company that is looking at building a very very large marquee uh um uh polymetallic nodule refining facility in texas that actually holds a lot of promise and so that is one of the projects that we're looking at through the PAC silicon consortium and potentially supporting.

Uh, thank you. Thank you. We did meet with uh BOEM also and they're on their way to Guam too. Uh, and there's some regulation changes where uh they're now saying they don't have to engage the government or or or get the opinion from the public but I I can assure you where it's not um it's not hunky-dory it's not going over too well but but the explanation needs to be clearer and questions need to be asked, there's different technologies uh that they're still looking at uh but i understand from this point we got there is some time to really look at this but i'm really concerned and from your point of view sir i i appreciate that you make sure the people of the islands are well taken care of this is our livelihood the ocean and we can't have that really disturbed but at the same time we wanna look at the nation's uh uh the importance of our security in the nation as well can can you touch on uh just a little on the you have with cook islands

So we um a as you know very sh I think it was the week after the president's inauguration the Cook Islands um signed a bilateral um MOU with China which was less than ideal um since then we have obviously engaged the Cook Islands and uh we are basically looking at uh dramatically expanding our commercial relationship with them, including with respect to infrastructure investments, which they are are very much eager about. They want infrastructure investment for telecommunications, for transportation infrastructure, um, as well as for deep sea mining, which is obviously something that we care about a great deal for our national security.

Thank you very much. Welcome to the job.

Thank you.

Representative Wilczewski.

Thank you very much, Mr. Chairman. Uh, I do want to thank Chairman Mast for holding this important hearing. I'm gonna thank you, Under Secretary Helberg, for being here today. I'm gonna start by saying how much I agree with the need to protect American interests, including our national security. Uh, it's why I wanna open my remarks by thanking my colleagues, uh, Chairman Mast, Representatives Kim, Barra, and Huizinga for their leadership and their partnership on the Dominance Act, legislation that will help crack down on China's chokehold on critical minerals. I look forward to our consideration of this bipartisan and bicameral legislation. Mister Secretary, though, you opened by emphasizing America's need to build and scale AI free from adversarial influence, explicitly citing China as one of the major areas of concern. Given those valid concerns, I feel a little obligated to point out that just last month the Wall Street Journal reported that just before President Trump's inauguration, shake to noon, the UAE's National Security Advisor and owner of AI firm G two that you also referenced, quietly bought a forty nine percent stake in the Trump family cryptocurrency business World Liberty Financial for half a billion dollars. That money came through a UAE royal family entity, which reportedly sent about another hundred and eighty seven million dollars directly to Trump family entities and another thirty one million to entities tied to Steve Witkoff's family. Soon after that massive payment, President Trump approved UAE's access to roughly five hundred thousand of America's most advanced AI chips every year, with nearly half going to, wait for it, Sheikh Tahoon's company, G forty two. National security personnel had previously flagged G forty two for its ties to China, warning in two thousand and twenty three that Beijing was exploiting the relationship with G forty two to advance espionage against US government officials. But it doesn't stop there. Tinoon controls firm MGX use World Liberty's financial stable coin to funnel two billion dollars into Binance in twenty twenty five. Just seven months after that, Binance founder CZ, the crypto con king, received a presidential pardon from President Trump. So let's be clear. A powerful UAE royal wants US AI chips he can't access. He writes an enormous check for nearly half of Trump's crypto venture, enriching Trump, the Witkoffs, and other insiders. The same network funnels two billion into Binance through World Liberty financial stable coin, followed swiftly by a high profile pardon. Facts, Mr. Undersecretary, not suggestions. And all of this unfolds while Trump and his family are still still publicly associated with World Liberty Financial on the web site. And we're close enough you can see it. They are still on the web site. It seems pretty clear to me. This is not diplomacy. This is a pay-to-play scheme and a pay-for-pardon pipeline. Americans who are being crushed by higher costs know exactly what's going on. The rich and the powerful are buying their way out of accountability and the corruption is beyond acceptable. anyone with common sense can see it. So, Mister Under Secretary, first, do you dispute any of the facts as I've outlined them to you?

Yes. So, um, I think there's uh obviously a lot to unpack in in your uh uh recap of the Wall Street Journal story that you're referring to. But um, I think if I could just start by the beginning. The first is um there there are assertions about world liberty financial, there is assertions about mal-intent around the UAE and then the relationship if I if I could finish if

Those are just facts, Mr. Secretary, there are no no assertions there.

if I could just finish if I could just finish you went on for quite some time and then there is the question of what is the relationship between World Liberty Financial and the UAE um so I am privy to no particular information about Liberty Financial what I will say about the UAE's they the connection between World Liberty Financial and the UAE is based on a Wall Street Journal story and I'm sorry but I know better than to um operate on the assumption that every Wall Street Journal story is entirely factual and true.

So would you welcome an oversight hearing on this issue?

And and and and what I will say,

Would you welcome an oversight hearing on this issue?

well well, if I could just finish,

We can clarify.

if I can just finish the your the answer to your question. Um, and what I will say is, um, I think that question, um, and the accusation really presumes, uh, has baked into it a presumption of malintent uh, and malfeasance on the part of the UAE, which I really think is not warranted. the UAE um joined the Abraham Accords incredibly early at great political cost to itself. Um it has, it is a major investor across the board, it's it has leadership that is very that

Oh they're they're a major investor, alright.

that that that is um that is very interested in technology and it's a major investor in our technology sector. They invested in global foundries. They brought Cerebris almost back from the dead and Cerebris today is a crown jewel of American technology, it is a semiconductor design company, and we're very lucky to have uh talented founders in the US that were able to get resources to actually build transformative technology. The last point that I would add is your assertions about um about you know their being in proper conduct I think presumes that uh the UAE somehow got access to technology that it wouldn't have been able to get. which is totally not true because we wanna export AI chips.

I just laid out the facts as their president is running secondary.

We have the AI export program that aims entirely at exporting AI chips, and we launched the chip concierge service to provide white glove

We could do all that without that investment in the Trump family cryptocurrency.

support to and and and we to provide white glove support to countries,

We could do all that without the pardon.

to give them access to AI technology. So the UAE uh was never barred under this administration from getting access to AI chips, because we want to encourage their adoption of internships. We don't want them to run

They could have had that without the unquestionably bad

on on Chinese semiconductors.

timing of that kind of a massive investment in a Trump family business. You can't agree that that's at least a bad look?

I it's uh Congressman, what I will say is um I I I'm not gonna comment on the Wall Street Journal story. It's uh it's unconfirmed and uh and and and the U and the U

Well, then let's have a hearing. We can confirm it. Let's get to the bottom of it.

and and and uh the position of the administration is we actually We think it's a good thing if foreign uh countries and companies want to buy American technology. My role is unders-

And I look forward to you, with you doing that,

My

without it enriching public officials in the process.

My my my role as as Under Secretary is to promote American companies.

I'm gonna move to Representative Wilson.

All right. Thank you, Mr. Chairman.

Representative Wilson is now recognized.

Thank you very much, Mr. Chairman, and Secretary Helberg, I wanna uh thank you uh for your promotion of economic growth. Uh it's so important with the achievements of record investments that President Donald Trump has made. I've never seen a president with such achievements. We know that he secured a hundred and fifty billion dollars while he was um visiting uh with promises uh from the EU. Uh his visit to Qatar, ninety six billion, to uh Doha, and then to on to Saudi Arabia with uh uh ninety six billion. Uh UAE, hundred billion as you mentioned uh fifty billion from uh Japan and seventy five billion from Korea, over and over again. Uh, you you have a great job because you're dealing with a president who uh is uh making record uh we've we've never had anything like this I mean it's just uh these are jobs. Uh and with that the Trump administration policy is mutually beneficial economic diplomacy. With that in mind, in the case of Syria, fifty-four years of Baathist socialist uh regime dictatorship has been ended with the ouster of mass murderer Assad. Investments are critical for stabilization. and prosperity in line with the President Trump's vision. And I'm really grateful he was the one who said give Syria a chance in uh, eh while he was visiting Riyadh. And then from that, he lifted the Caesar sanctions, and so uh we're on a, uh a way to indeed uh, uh develop a, uh relationship, a positive relationship with such an important country. And uh, additionally, uh there are remaining barriers such as old business laws, the pending lifting of the state sponsor of terrorism designation and security of a private industry. Uh, what is your department doing to make it available to the Syrian government? And also, it's really happy, uh, President Chairman Mast, uh, met with, um, President al-Shara, uh, here in Washington, and historically, it was the first, uh, visit by a Syrian leader to the White House in two hundred and fifty years of American history and eight thousand years of Syrian history. With that in mind, What can we do to remove barriers for more investments in Syria?

Thank you very much, um, Congressman, and, uh, let me just say that I entirely, uh, agree with, um, your observations. Um, as you know, the President announced lifting of sanctions on May thirteenth of last year. OFAC has issued a general license, um, and may broadly uh authorizing previously prohibited transactions. We are engaged in a gradual rollback of sanctions um on Syria. The president made it clear during his his historic visit to the Middle East that um our policy is to give Syria a chance at greatness, which includes rolling back sanctions, encouraging private investment, the rebuilding of foundational infrastructure in order to allow the Syrian economy to actually uh come back um in in out from the cold. um after it was frozen out from the global economy um uh during the the unraveling of the syrian revolution um if you have specific tactical ideas i know that congress repealed the caesar act which was obviously an important step um if you had if there were tactical ideas um that you would like to share with my office on additional steps that we could take i would certainly welcome working with you and your team on that

and and immediately we will be in touch and indeed we need to uh lift the uh state sponsor of terrorism and i'm just uh so hopeful for the uh hey for the people of syria what this will mean uh and then uh as you're doing this in the context of my home state of south carolina we understand foreign direct investment i'm just really grateful to work with governor jim edwards to recruit michelin to south carolina uh we now have the world's largest michelin tire manufacturing facility in my home district of lexington and then working with governor carol campbell Uh, I was really grateful he recruited BMW. Uh, we're very happy. Uh, eighteen point two billion dollar investment. Even Chairman Mast would be impressed with that number. Uh, and I'm really grateful that, uh, what's occurred. Um, initially they, uh, weren't, they were skeptical, they were thinking maybe, uh, Bavarian Motorworks would have to change the name of Bubba Motorworks. Well, Bubba's done good. And so it, it's mutually beneficial. And then, I'm really grateful with, uh, Governor, uh, Nikki Haley, uh, Senator Lindsey Graham, Senator Tim Scott, Attorney General Allen Wilson, there was an effort by the Obama administration to close the BM uh, excuse me, the Boeing facility in Charleston. Uh, but we fought back. And now there are ten thousand employees there. I'm really grateful President Trump visited, uh, to uh point out how significant the seven A sevens are worldwide. And I'm grateful just a couple of months ago, Sec- uh, Treasury Secretary Scott Besant was back in his hometown of Charleston, uh, where it was announced that, uh, uh, Boeing would be doubling uh their production and it was very helpful that President Trump received a ninety six billion dollar or order of seven eighty sevens while visiting Doha. Thank you very much.

Thank you.

Representative Schneider. Thank you and uh, Mr. Undersecretary, Undersecretary, thank you for being here. Tonight the President uh will uh address the nation, uh talk about the State of the Union, and undoubtedly claim that the economy is strong. You mentioned in your opening remarks that America is re-industrializing. And just briefly, I'm gonna try to manage time. I have a lot of questions. How many jobs did the US economy create last year?

Congressman, as you know, pro- productivity

Number. I'll tell you, it's a hun- I'm claiming my time.

productivity

It's a hundred and eighty-one thousand jobs, far fewer than

productivity expanded at a record pace, at a record

Excuse me, I'm reclaiming my time. How many manufacturing jobs did the economy create last year?

Congressman, I'm not sure you're interested in my response.

Well, I, I, it's an answer. This is an absolute exotic

So, as you know, the president secured nine trillion dollars of foreign

All right, I'll, I'll stop you, cuz you're not gonna answer. into the US for the to be expanded hundred percent as i said i don't think you're interested the the economy lost i'm reclaiming my time the economy lost jobs last year uh the bureau of economic analysis uh s president's bureau of econo economic analysis says the economy grew at two point two percent in twenty five that was the president's first year it grew at two point four percent in twenty twenty four president biden's last year um the economy has room to grow uh where there's things to work on i will just question your claims you came here and you said you don't wanna you don't wanna talk about trade, but I think we have to. You talked about Pax Silica, which pays homage to, I think, previous uh terms of of Pax Americana, which was the eighty years of the world order we knew and made America so prosperous between World War Two and, and, and really just last year. Pax Britannica, a hundred years of uh of security under the the British, um after between the the Napoleonic Wars and World War One. uh Pax Romana, which is the first time the term is used, which was two hundred years uh between Emperor Kaiser Augustus and Marcus Aurelius. Uh these periods were defined by s- by statesmanship. Pax Americana, established under the leadership of President Truman and Secretary of State Marshall, President Eisenhower and Secretary of State uh Dulles. Uh Pax Botanica had statesmen like Disraeli and Gladstone. Pax Romana, uh I mentioned before, uh founded by uh uh, Caesar Augustus, who was the builder. Uh, it ended with the death of Marcus Aurelius, who was a a philosopher king. Uh, statesmanship matters as we're trying to do in what we're talking about here of of leading. Um, unfortunately, I think there's a third famous uh emperor during Pax Romanica, Romana, which was uh Nero, who was defined as capricious, narcissistic, self-indulgent, autocratic. Uh, unfortunately, I think what we will see from the president uh will not be the statesmanship of previous uh leaders but more like Nero. Um And Nero, alright come back to to Pax Silica. You said it's uh includes the world's largest investors. You said it's a focus on a on a two questions in the in the final two minutes. Um do you believe, unlike the previous references to peace, Pax Americana, Pax Pax Britannica, Pax Romana, which were led by nations and statesmen, Is your view that it's gonna be AI that governs the world for the next uh generation? Yes or no?

Congressman, there is a lot to unpack in uh in in

Uh, don't unpack. I'm asking a simple question.

in what you said.

Is is AI gonna dominate or will it be people?

I

Will you be looking out for workers, American workers and American families, or is it gonna be the great investors that are investing in coxilico?

First of all, um uh it's uh one might ask and you know and it's not lost upon us the irony of where was your concern

What why why are you deflecting from a basic simple answer?

And and and second of all, and and second of all,

The American people are concerned about AI and where it is leading.

and second of all, and second of all, if I could, if I could finish, and if I could have thirty seconds to to answer your question. Um, we believe AI is a transformative technology,

Unquestionably.

much like electricity was um a hundred and fifty years ago. We don't believe, we believe it causes gains in productivity. Here are the facts. Unemployment is below three percent. Productivity is Over five percent, over five percent.

Where is unemployment below three percent?

The economy is objectively incredibly strong. It is attracting trillions of dollars of foreign investment in the US. Um, these are statistics that everyone thought was impossible.

I I'm gonna reclaim my time because you're clearly not speaking reality.

I I am listing facts that you refuse to acknowledge.

Infl- inflation, just let this month, inflation was recorded at two point four percent.

You're cherry picking.

I'm using the statistics coming out of this administration. Inflation at two point four percent.

SMI.

The job creation last year was revised to five hundred and eighty-four thousand jobs.

Two point seven percent unemployment.

By this administration, five hundred and eighty-four thousand to a hundred and eighty-one thousand. AI is transformative. It's gonna make a huge difference. But we need to understand it from the standpoint of how do we keep American workers safe and looking to a future where they can prosper and provide their f- for their families. How do we make sure that Americans' privacy is protected from AI? How do we make sure that AI and America leads to make the economy stronger, America's future stronger, and American community is more secure. That's all I'm asking you. You've sat here all day saying everything is complex,

Yes, ma'am.

AI is our chance as a country to finally re-shore.

it needs to be unpacked. I haven't finished. I'm speaking. I am speaking. You haven't let every question leave ask to be unpacked.

Your time has expired. If you want him to respond, you can let him, otherwise your time is expired.

I w- I yield back my time.

Representative Kane.

Thank you, Mr. Chairman. Uh, commercial diplomacy is critical. to advancing the interests of america and its allies abroad today marks four years since russia illegally invaded ukrainian soil as we solemnly remember the lives lost in this tragic war i want to discuss the important work that under secretary hellberg and his team are doing at the state department to use economic levers to cut off the russian war machine and protect the ukrainian people mister hellberg i'm encouraged by president trump's statement earlier this month that prime minister modi promised india would stop purchasing russian oil i've recently introduced the no aid for russian energy act with a group of bipartisan colleagues this bill highlights the need all of america's allies stop enabling the russian oil industry which continues to fund putin's illegal war can you share how this administration's agreement with india takes an important step in countering Russia and supporting Ukraine.

Thank you for the question, Congressman. Um, as you know, the administration uh hasn't stated a policy of maximum pressure on Russia. The goal of the administration is very much to bring about an end to uh the war in Ukraine. Um, that included the instatement of secondary sanctions, which, as you point out, um, had the the effect of affecting a number of different indian interests um ultimately the the um reaching of the bilateral joint statement on trade between the us and india has brought about a positive resolution to those discussions and um the the content of the bilateral statement on trade include historic purchases by india from the us on energy historic cross-border investment And um in the I believe it was in the first quarter of uh the the president's administration, uh President Modi and President Trump um set a goal of increasing overall bilateral trade flows to five hundred billion dollars. So I'm incredibly confident in the trajectory of the US Indian relationship. Um it's incredibly strong. I actually just got back from India. I was there three and a half days ago. our new ambassador there is doing an unbelievable job. Um, and um, I, if you have additional ideas on ways that the US and India could work together, uh, we would certainly welcome and are always looking for ways to deepen that vital relationship.

It is critical that America's allies throughout the world commit to stop purchasing Russian oil. I co-sponsored the Sanctioning Russia Act of twenty twenty five. which has the support of the president and will create economic levers to encourage other nations to stop funding the Russian war machine. How can economic levers be used to encourage other nations to stop relying on Russian oil?

I I'm sorry, do you mind repeating the question, Carlos?

How can economic levers be used to encourage other nations stop relying on Russian oil?

So, um, this really strikes at the heart of the two-fold approach that the that the administration's taken which is maximum pressure, uh which uh my understanding is um the both chambers have uh supported the uh sanctioning Russia act uh which has gotten uh eighty-four cosponsors in the senate, the president has expressed support um uh which obviously provides the administration a great deal of leverage and and as everyone knows um would provide the president the authority to instate five hundred percent tariffs uh on countries that continue trading energy with Russia um while simultaneously uh expanding the total supply of energy outside of of Russia. So that includes bringing Venezuela uh Venezuelan sources of energy back online. That includes expanding our domestic energy production. Um, we now have a domestic energy production that actually exceeds Saudi Arabia and Russia combined,

And

which is truly historic.

And counterfeit drugs present a health and safety crisis, particularly in impoverished nations. Counterfeit and substandard drugs from China present a serious safety concern across the world. A November twenty twenty five article from the Center for Strategic and International Studies stated that counterfeit drugs not only endanger patient's safety but also erode the foundations of the US innovation economy. What steps can the United States take to ensure that countries throughout the world have access to American pharmaceutical products? They're safe, tested, and reliable.

Thank you for the question. You are entirely correct that um our pharmaceutical supply chain has a lot of the same structural weaknesses as our semiconductor supply chain and our shipbuilding supply chain. Um, it has fallen victim to decades of offshoring. Ultimately, the combination of the President's tariff policy as well as the deployment of strategic investments in these sectors um uh will help us achieve the the ultimate inevitable goal that we need to reshore part of those supply chains domestically, while working with allies in order to uh in order to move quickly to actually get that supply chain outside of China. India, to your earlier point, is the second largest um uh uh supplier of pharma or pharmaceutical compounds. One of the challenges with India is that they themselves rely on a lot of inputs that come from China. So we we need to work. This is where PAC silica might be able to be a helpful platform because we need to work with all of our allies to make sure that we can reassure that capacity outside of China.

Thank you. Uh, you're back.

Thank you. The chair now recognize uh representative Costa. For the time being.

Thank, thank you very much, Madam Chairperson. Um, I want to uh turn uh back to the uh uh issue of critical minerals, uh specifically as it relates to Ukraine. Today is the fourth anniversary of Russia's invasion of Ukraine. I remember being in classified briefings in the months leading up to that invasion, uh about how long this might last. For six weeks Putin apparently thought three days. Um, and uh, the Brave U Ukrainian people have been standing up for their sovereignty. And we have been part of a coalition that has tried to uh, protect and allow them to stand up for their sovereignty. I remember Senator uh, Graham talking and others of my Republican colleagues, that it was a clear case four years ago about good versus evil. I still believe it's about good versus evil. The administration to its credit, uh, recently signed an agreement with ukraine um on critical minerals but for that agreement to come to fruition ukraine has to win the war most of these critical minerals are in the dombas region uh that russia currently occupies a part of uh it seems to me um that uh the president suggested that ukraine give up that territory even though russia has failed to conquer that territory uh, after four brutal years of war, uh, makes more Ukraine more susceptible to Russia's, uh, and by the way, Russia's broken every agreement they've made over the last twenty five years, um, makes it more vulnerable to attack. So how do you expect us to capitalize on Ukraine's critical minerals, given all these factors? I don't see it.

So the the first step, um, Congressman, is obviously Ending the war, bringing about an orderly end to the

Yeah, it was gonna be twenty-four hours, it's gonna be real easy,

this

the first day I come into office it'll be over.

This this war. I if I could just answer your question. So um President Trump shares your goal of wanting to end the war. He has actually kept in place um all of the sanctions instated by the previous administration. Not only that, but he's actually added sanctions on the two largest oil refineries uh and oil companies in Russia. Um, the goal is to paralyze Russia's logistics and its biggest sources of revenue because we want to deprive Russia of the resources that it it is using to prosecute the war. That is very much um the the premise behind the president's support for the sanctioning Russia Act, which is a historic, incredibly far-reaching bill that would impose five hundred percent tariffs.

L- let me go beyond that and I appreciate your response, but we have a uh a piece of legislation in the Senate that has overwhelming bipartisan support that would add further sanctions to your point. In addition to that, we have further leverage, and the President likes to talk about having leverage. But when you talk about uh Putin understanding that we're continuing to committed to support with our allies and NATO, Ukraine's efforts to stand up for its own sovereignty, I think is the real leverage that Putin will ultimately understand. That's my view. Um and and let me shift over here now to uh China uh artificial intelligence and chips. Uh I read uh that you've written a book, Wires of War, Technology and Global S- Power, Struggle for Power, uh calling for stronger US strategy against China's technological ambitions. I haven't read the book but maybe you can get me a copy and you'll s- autograph it for me. Uh my my concern is is that, I don't know if you agree, but China for every administration is a challenge because one, they're an adversary. two, uh, they are a competitor, and three, they are a vast market. And in those three, uh, areas it makes it a real challenge, uh, for any administration. Um, but because we agree that the technology is critical, uh, you mentioned the new safety framework of the G-forty-two and implemented this week. You talked about safeguards, uh, rails to stop China from accessing chips from G-forty-two and in the UAE. My, I concur with that. But why are we selling chips, some of the most advanced chips to China? It makes no sense.

Congressman, I have an option.

Congressman, thank you for your question, and um If I may, I'd like to may to characterize the administration's strategy for winning the AI race. Last year, President Trump delivered a landmark speech, um that focused on where he declared that the United States would win the AI race. The United States is the birthplace of where the AI race began and we're committed to to winning it. He ruled out an executive order. Um there are three conditions that have to be met for America to win the race. We need to have secure supply chains, we need to have the world's best AI innovation, and we need the most market share. Sometimes when we diffuse technology internationally, that can c- create a trade-off. in our qualitative edge for innovation, which is why this debate remains so vexing. What we have done to maintain that edge, instead of artificially restricting access to American technology, is actually forge historic AI deals in the Middle East, um which is really America's equivalent of the Belt and Road Initiative. And this graph provides you a visual illustration of market share and innovation, and winning the AI race would really be would really mean that we wanna end somewhere up and to the right of this graph.

Well my time's run out, but uh I I think we may have to agree to disagree, because I think the current effort to sell advanced chips to China is in direct conflict of this craft and what you're trying to do, what we all believe is in our own self-interest. And uh I think we need more discussion on this area. I'm very concerned about our national security in selling advanced chips to China. Uh I yield back the balance of my time.

Thank you. The chair now recognizes Mister Davison of Ohio for five minutes of questioning.

Uh, thank you, uh. And thanks. Thanks, Chairman. Thanks for the, uh, hearing today. Um, Under Secretary Helberg, thank you for your efforts, and those of the entire, uh, Trump team, uh, to reform the State Department and to put America first. And by that I think it's long overdue the basic concept that America's resources should advance America's interests. seems to have been way out of whack at the State Department. Um, and, and uh, thanks to Secretary Rubio, uh, and his leadership for realigning those things. The most basic idea that our resources should advance our actual interests. So, thanks for pushing back on the globalist agenda. And um, in times of commercial diplomacy, it cross-cuts, you know, that at its essence. So, from Chairman Maast's effort to enact a mission driven reauthorization of the State Department, in our committee's uh state reauthorization bill, to Secretary Besson's mission to uh de-risk and re-industrialize our economies, as he said, it's Main Street's term, um as well as fights against globalist control tactics, such as uh undermining the US dollar and seeking to implement central bank digital currency. Um there are so many key parts of um the agenda that cut through Department E at the State Department. I'd I just wanna thank you and uh Secretary Rubio's team for putting our country first uh with the efforts there. So, uh Mr. Secretary, um I think one of the defining fights of our area, I think the future is really gonna be determined in a lot of ways about the future of money. Um, so money is uh increasingly being corrupted into a tool for surveillance, coercion and control. And the epitome of that is what China is doing with central bank digital currency. The alarming thing is that the Bank of International Settlement, which is the central banker to the central banks, uh, in Basel, Switzerland, the European Central Bank, the Bank of England, the Bank of Canada, they're all working to implement not just any form of, um, essentially communist money, but the Chinese Communist Party's version of communist money, a central bank digital currency with all the kinds of, uh, tools that are there. So, I I guess, what are the efforts there at the State Department um to counter this kind of mass surveillance uh technology and defend the power of the dollar?

Thank you, Congressman. The um uh I I I share your concerns. The uh the work that we do in the Economic Undersecretariat uh for for the better and for the worse unfortunately does not focus a great deal on cryptocurrency. With that being said, um our policy is to promote the dollar. And so In that sense, we have a policy of promoting the use of the US dollar as uh the main alternative to any other currency whether it be crypto or the RMB or the Euro um we wanna promote the adoption of the dollar um and we want we have a policy of wanting to promote a strong dollar.

Yeah, so thank you for that. So to be clear, this is just a different version of the RMB as is the Central Bank's digital currency version of it. But i if you look at like even the actions in Venezuela, a big part of that were was the fact that all the oil was being settled outside of the dollar, correct?

That's right. So the um so I mean I'm not gonna comment exactly on the payment mechanisms that Venezuela was using, but what I will say is that you're completely correct, that um cryptocurrencies have in the past been used by a number of entities, uh, looking at evading oversight, uh, for uh the application of an enforcement of sanctions.

Yeah, well, I wanna be clear, like Tether is not the same things as a central bank.

Congressman, it sounds like this is an issue that you,

Yeah.

so you're right that BRICS, um, Uh the BRICS uh work has tried to undermine the US in a in a very comprehensive way, including in the area of currency. They are indeed working to establish an alternative payment uh network to SWIFT and the US dollar. Um it sounds like uh your office and uh yourself have have given the issue of cryptocurrencies a great deal of thought and consideration. And we would you know because this is not an issue that historically has been a big

Yeah, thank you for that.

Mm-hmm.

I mean, you know, I think, you know, as my time uh rapidly winds down here, I just wanna say, uh, as the Chairman for National Security and Illicit Finance, um, one of the main tasks we have is to reauthorize the Defense Production Act, and uh the Export-Import Bank. So as you look, X XM just announced a uh critical minerals um reserve, so that we're doing something like the strategic petroleum reserve in a um you know, with respect to critical minerals, and the Defense Production Act has been heavily used to really focus on our national security. So could you briefly highlight how important those two tools are for the kit bag in your division?

The Defense Production Act is incredibly important, I mean, era where um the the basic posit- we believe that promoting American industry is incredibly important but we are not trying to do this in-house. We believe in using different tools that the US government has in creating and instating incentives that allows encouraging the private sector to lead. And the Defense Production Act is one of those uh one of those tools that is incredibly important that the US government has to actually create market incentives to encourage private investment in industries that are incredibly strategic. So, um, I completely agree on the importance of those tools.

Yep. Thank you. Uh, you're back.

Thank you.

Representative Sherphilis McCormick.

Thank you. Thank you, Mr. Chairman, and thank you, Under Secretary Helberg, for being here today. The US government and the African Union Commission recently agreed to establish the USA U Commission, Strategic Infrastructure and Investment Working Group. This is a breakthrough. For the first time we are explicitly aligning US commercial diplomacy with African-led solutions specifically the AU agenda twenty sixty-three, and its vision for integrated prosperous content. This isn't just a diplomatic gesture, it's recognition that Africa's market soon to be twenty nine trillion dollar economy by twenty twenty five. Indeed, we can't afford to ignore the fact that Africa is the world's next greatest greatest frontier. With a population of two point five billion by twenty fifty, it means that one in four people on the planet will be African, with the largest labor force. Truly, our move beyond and now um tr- oh sorry, to truly move beyond non-reciprocal nature of AGOA, do you believe that we should codify this partnership?

Um, so I I completely agree with your diagnosis, congressman, on the strategic importance of Africa. In fact, one of the Um that's one of the that's one of the very reasons why the administration and my office in particular has been very engaged in the resolution of the conflict between the DRC and Rwanda um our office has been very focused on a subset of that of that um issue set uh known as the reef um the regional economic integration framework between the DRC and Rwanda uh that aims at promoting investment in infrastructure as well as uh mineral security in order to deepen our economic partnership with the DRC in Rwanda.

Mm-hmm.

I traveled not too long after being sworn in to um the ivory coast where I was able to meet a lot of different heads of state that because in sub-Saharan Africa the heads of state attend each other's inaugurations which provided me with an opportunity to do a lot of bilateral meetings. I met with um the the newly elected president of Senegal um uh the former president of niger uh along with uh several other presidents and and our administration wants to engage africa a lot more

so i wanna go back to the original question and make sure we have it clear that you do agree that it should be codified

so i i'm not gonna comment on

so no

um on the administration's position on agoa um

it's not a key question no no this is not about agoa but what we are talking about is the progress you've already made that commission do you believe The reason why I'm asking you is because I have a bill that actually does exactly what you guys are doing and I just wanted to go on record that you agree with it, so we can bring it to the floor. Do you agree with it?

And and sorry, I agree with what exactly?

So we're talking about the USA U Commission Strategic Infrastructure Investment Working Group. You have the working group, you guys are strategically working on it actively. And do you believe that it should be codified because I have introduced a bill that actually does the same thing. So regardless of what administration is present, we have it codified and we'll be working on it consistently.

I I I'd be happy to follow up with your office to look at the details of the bill, uh, that your team's developed, uh, in order to to have a more informed view on it, Congresswoman.

OK, wonderful. My next question is, um, you've spoken frequently about using policy levers to shape corporate environments. As we look at the competition for critical minerals and digital infrastructure, the data is clear. Africa is home to one point three billion customers. and the world's youngest workforce. I wanna get on the record a few things that we might see if we agree or disagree of how we can actually work together to move this forward. Um, do you agree that restrictive visa policies which prevent African entrepreneurs and invest investors from visiting the US to close a deal, undermines our commercially our com commercial diplomacy agenda?

So I do think that um visa decisions, which I will say is is does not totally fall under the authority of my office, but um I do think those are are different than our ability to engage a lot of African countries. Um and I'll give you one example. In the last week and a half, we uh highlight we rolled out a two hundred million dollar foreign assistance package that actually helps provide access to low-cost smartphones in the Indo-Pacific. We believe that that's potentially a model, if proven successful, that could be replicated in other geographies like sub-Saharan Africa. The reason why I think it's important related to your comment is because access to American technology doesn't just promote access for American companies to those markets, but it also helps encourage entrepreneurship in those countries. It gives entrepreneurs the tools to be able to build businesses

Mm-hmm.

and actually build a livelihood for themselves.

So I understand that point, but I want to get back to the importance of the visas and the culture competency. A lot of the conversations we're having with stakeholders, especially in Africa, they feel insulted by the visa restrictions, in trying to understand the insult, the injury, and how we can remediate it. I just wanted to point out the restrictions and and the effect it's having on the uh entrepreneurs who we wanna engage. And then my last question, I only have seventeen minutes, is the role of the African diaspora within the United States. what role or what vision do you have to incorporate um them into the process to make sure things like the cultural uh differences that we don't wanna offend anybody.

Sure um so we I mean as as the I Economic Affairs uh Secretariat we are very focused on the economic relationships between our companies with those places and and we really try to deepen our bond between the US and strategic countries in Sub-Saharan Africa um through business relationships, through investments, Um uh our s supply chain security is the low hanging fruit because a lot of those countries actually have a lot of opportunity to contribute to make unique contributions to our supply chains. Um as you know, the counselor affairs part bureau at the State Department is the bureau that oversees visas policy. Um we we do not. And so uh they would probably be much better suited to answer your questions on, you know, different parameters of of our visa policy with Sub-Saharan Africa.

Right. Thank you. I yield back.

Thank you.

Representative Barr.

Thank you, Mr. Chairman. Um, Mr. Secretary, thank you for your service and, um, wanted to, uh, first touch on, um, the new, uh, outbound investment screening tool that we've given to the president. Um, uh, as you know, the president signed into law, uh, through the NDA last year, uh, the, uh, Comprehensive Outbound Investment National Security, or COINS Act, The Coins Act effectively codifies the President's America First Investment uh policy memorandum and ensures that Americans are not un- unknowingly funding the Chinese military-industrial complex by restricting the flow of investments into Chinese military companies and critical technologies, including artificial intelligence. Um, the Treasury Department's gonna play a a major role in that, but the State Department will have a role as well. Um, there is a sanctions component to uh the the legislation. As your bureau bureau oversees sanctions policy at the department, how should the administration think about defining artificial intelligence uh in their outbound rulemaking and will limiting investments into AI um that advances Chinese military and surveillance capabilities onshore those investments into US firms and therefore supercharge US competitiveness?

So the uh my understanding of the existing rules adopted by commerce are um based on limitations of threshold capacities for different semiconductor um chips. Um the the AI experts that are currently authorized to China are for fourth generation uh chips. They they're not for first, uh second, or third. Um so capacity threshold is obviously a key criteria. um, applications, the the the propensity and potential of applications for military technologies is another and overall volume really matters. So the current rule rolled out by BIS in January, um, actually has a fifty percent cap.

Yeah, and if I,

Um.

if I could reclaim my time, secretary, I, uh, I'm, I'm really not speaking to the export control piece, and I know that's BIS is within your, within your purview. I just want to flag for you that uh this new outbound investment screening tool is also important to, is another uh arrow in the quiver. Uh and uh very, very important that the State Department also with Commerce, with Treasury uh work to rest restrict investments into these critical technologies uh and uh and do it the right way with kind of a green light, red light approach. So um let me move on to um I'd like to talk about the Western Hemisphere and DFC. um, a lot of activity at the beginning of the administration on pushing China out of Panama and the canal tell us give us an update what is DFC doing to catalyze private, American, inv- friendly investment into the canal and push uh, uh, Chinese malign investment out.

So, um, as you know, thanks to the work of the Congress, uh, the reauthorization of last year appropriated two hundred and five billion dollars for the DFC which give really gives the DFC the kind of resources that it it needs to um credibly compete with China's Belt and Road Initiative. Um with respect to the Panama Canal uh last month um the Panamanian Supreme Court um invalidated the concessions of CK Hutchinson the the Chinese company um which effectively paves the way for BlackRock to uh buy to do a buyout uh of an eighty percent stake in those concessions um in the panama canal we obviously very much welcome that those developments this is an issue that the president cares about he mentioned it in his inauguration speech um and so we're we're tracking those developments very closely and i would add that we are also in contact with the panamanians to um find ways of actually building on that success to expand our cooperation with them, uh, including in the area of logistics and supply chain.

The Th- th- thank you for your focus on that and and more American investment in the canal, less Chinese. That's, uh, I think your mission and the President, uh, uh, is obviously prioritized that. Appreciate it. Twenty twenty four, uh, I voted for the creation of the US Foundation for National- Natural Security and Counterterrorism. This foundation will leverage private sector philanthropy to enhance federal resources and accelerate critical projects in many places where Belt and Road needs

I I'm happy to work with you on that, absolutely.

Uh, thank you very much, and I think cracking down on Chinese illegal mining, logging and wildlife trafficking is a good strategic uh part of uh, of our objectives encountering Belt and Road. That a yield back.

Representative Burchett.

Thank you, Mr. Chairman. Um, thank you, Under Secretary. I appreciate you being here, brother. Uh, how do y'all ex- plan to, um, expand trade relations with South Asian nations beyond India?

So

And I'm sorry if I've, this question's been asked, but when you're,

No, no.

when you're the four hundred and thirty-fifth most important member of Congress sometimes. So every time I ask a question, I need you to ask, answer it like that is the most incredible question I've had today.

It's uh, it's uh Congressman, it's the best question I've heard all day.

Bingo.

Um, so I I I appreciate the question. It's um Southeast Asia is actually one of the first parts of the world that I traveled to after being sworn in. Um, I uh traveled to the ASEAN summit, the AIPAC summit. Um, and so we I went to Malaysia, Singapore is the first place I went to. Singapore is is a signatory to PAC silica. We're working to engage Southeast Asia. on supply chain security it really is a hub of manufacturing singapore uh is home to one of the world's largest sovereign wealth funds and ten percent of the world's semiconductor fabrication capacity and that's just singapore that's before you include the philippines and vietnam which are also home to incredibly deep manufacturing capacity so we believe that engaging southeast asia is incredibly important we are having active conversations with several of those countries on specific project opportunities and infrastructure projects to actually expand that cooperation and accelerate the securing of our supply chains.

Uh, let me expand on that, you um expanding uh Can we combat China's Belt and Road Initiative by offering countries an economic alternative?

Absolutely. And let me tell you how. Um China aims at using state owned enterprises to build projects that are primarily debt traps and everyone knows that entirely in-house.

Yep.

We are gonna leverage our private sector in um a bilateral, a plurilateral, and a multilateral way in order to actually deploy private capital in a way that is revenue generating and positive sum for the beneficiaries and for our companies. Countries everyone knows these projects that China's ruling out are dead traps. They're incredibly unpopular. I haven't been to a single country that says that they want more China. And so it's incredibly encouraging. We believe that our the American private sector and the power of American industry is our best foreign policy tool. And it is the reason why eleven countries in less than four months have lined up to sign up to pack silica is because everyone wants to be a part of the ai revolution. And so we plan to wield that as a tool t for uh to advance our interests.

You think it'd be wise for us in our economic interest to be independent economically from China? I mean is there I I just you know when I'm a motorcycle guy and I remember when Harley Davidson was actually uh in the motorcycle business I guess I'll say before a guy with a man bun was their ceo um i i didn't ride a day never ridden a dadgum motorcycle in his life um but i'm not better but i but i remembered um how they uh went to china and they started trying to sell motorcycles in china and i mean they just put the screws to them there wasn't any there was no way you had to sell to the hierarchy and you couldn't sell within this certain thing and i mean they did it just to say hey we're in china is what it ended up being but we just got totally ripped off and these gutless politicians in this country you know have been over backwards i'd say half of us would be walking around naked if we didn't have a if if our if our clothing wasn't made in china i mean just look at every industry out there and how we're so dependent on them and i and i worry about that but also i understand the economic the world the view that we're gonna have to have some business with them so go ahead

So China has not made a secret of their plans and intentions to decouple from us. So the question is, uh, are we comfortable staying dependent on them while they actively try to decouple from us? And the answer is that our the the policy of our administration is to have supply chain resilience and de-risk our supply chains. That's why we hosted one of the largest ministerials in the State Department's history, fifty five countries, on February fourth, came to Um because they those countries share our concerns and and they agree with us on the need for supply chain resilience. Um China rolled out expert controls on their refined minerals that were entirely unacceptable. And I we think everyone agrees, which is why they attended the ministerial. And ultimately, uh we are working with our our uh partners in Taiwan, including TSMC and um others including Foxconn in order to reassure uh semiconductor manufacturing in America and secretary Luttnick's work has culminated with a pledge of two hundred and fifty billion dollars of investment in order to reassure forty percent of TSMC's production capacity in the US which is really historic so we want to secure the supply chain at all layers minerals semiconductor manufacturing and all the rest

thank you um gone over my by forty five seconds and i gladly take that from representative lawler thank you mr. chairman

representative lawler you're recognized for four minutes and ten seconds

uh thank you mr. chairman uh under secretary thank you for being here uh illegal unreported and unregulated uh phishing in is a global problem and china is the primary perpetrator uh the ccp supports the world's largest distant water fishing fleet which pollutes and illegally fishes the high seas with the exclusive economic zone of countries in the south pacific south america and africa uh aside from the impacts on coastal communities and fish stocks iu u fuels corruption funds transnational organized crime and facilitates labor abuses and drug trafficking it also undermines us fishermen who play by the rules Last Congress, we worked to create the US Foundation for National Security and Counterterrorism to bring together philanthropic funding and federal funding in a public-private partnership to bring stability to these regions, uh, making them engines of economic growth rather than targets for those who seek to do harm to America's interest. Success of the foundation can be another major accomplishment of both President Trump and Secretary Rubio's vision, for an America First policy agenda. Mister Helberg, will you work with us to ensure the implementation of the foundation as expeditiously as possible?

I'm I'm happy to do so, Congressman.

You are not able to?

I I I am. I'm happy to work with you to ensure the implementation.

Oh, sorry. Oh, OK. Great, thank you. Um, the President's national security strategy calls expanded economic relationships in the Middle East. Um, relationships that go beyond oil uh and gas and prioritize nuclear energy, AI, uh and defense technologies. Uh since the strategy was released, how has the State Department been working to expand these types of economic partnerships?

So we have rolled out the AI expert program, which is a whole of government approach to uh promoting the adoption of American technology, both in the Middle East and in other places. As you know, one of the unique um attributes of the Middle East is um the Middle East required bespoke bilateral deals because under bef prior to the revision of the global diffusion rule um Middle Eastern countries were deemed tier three countries, and therefore were restricted on the amount of chips that they could get. We don't currently have um um nearly the same amount of restrictions or scrutiny for countries in Europe. So European countries can already have access to American c technology um with nearly no restrictions. Um and so at the end of the day, we wanna promote the adoption of American technology. And so uh we wanna do it with the right guardrails, which is why we worked with our partners in the UAE uh on the the development of a security framework that's completely voluntary that actually creates a first of its kind uh cryptography platform that allows tracking tokens to make sure that as more countries buy large computing clusters those computing clusters are not used by our adversaries so on the one hand we have a very aggressive promote agenda and on the other we have a verify agenda that we are trying to um roll out through technology tools in order to scale verification alongside the promotion

Great, and as you work through that, I think, you know, we should work together, uh, if there are things that Congress can do to help facilitate, uh, this more quickly, uh, we should, we should be working to do that. Uh, the Commerce Department has proposed cutting the staff of the United States in foreign commercial service by more than half. Uh, this has, uh, led to considerations about whether to move USFCS back to the State Department. Do you believe that FCS officers are generally well integrated at posts and are able to coordinate well with FSOs? And from your vantage point, what are the kind of the pros and cons of moving uh the FCS to state?

So I I have not encountered any uh challenges or or limitations on uh uh based on headcount. We have economic officers dispatched at embassies um and and we've been able to work with them quite well. Um with that being said, being only four months into this role, I'd I would welcome the opportunity to work with your team to um as as you know, I obviously continue to travel to more places and and work with economic officers dispatched in different places. Um to to really give uh full and proper considerations to the pros and cons of um of additional follow-up work at on the coordination between um Commerce officers and State Department officers.

I appreciate that, and certainly in the scope of what the administration is trying to do from a foreign policy standpoint and really drive the economic uh prosperity around the globe uh to build those relationships uh that is something I think we should evaluate whether or not that should be moved over to state. So, thank you, I yield back.

Thank you.

Representative Kamlager-Dove.

Uh thank you, Mister Chair, and uh thank you, Under Secretary Helberg, for being here today. Uh, Under Secretary Helberg, your flagship PAC silica initiative is focused on securing the semiconductor and AI supply chain and quote " ensuring aligned partners build the AI ecosystem of tomorrow". But it is an open question whether one of those partners, the UAE and its national champion G forty-two, is an aligned partner of the United States or just of the president. Uh, the Wall Street Journal recently reported that the chair of G forty two, who was also the UAE national security advisor, purchased a five hundred million dollar stake in Trump's crypto company just a few months before Trump greenlit one hundred thousand advanced AI chips to G forty two and four hundred thousand chips to other firms in the UAE. Um, suspicious, concerning, uh, many folks would question this is the greatest corruption scandal of this administration. Now your PAC silica initiative is further deepening ties between this administration and G forty two. Uh, so Under Secretary Helberg, are you aware that the US intelligence community has had concerns about G forty two's tech cooperation with China?

Thank you for the question, Congresswoman. As uh as part of this role, I get intelligence briefings and and access to a lot of uh, if not all of the information available about the UAE as well as G forty two. Um, what I will say is, um, the UAE is an incredibly important partner. They are a major investor who has pledged to invest one point four trillion dollars in the United States. We have, um, as a co-

But if you, not to cut you off, but you know that we all have limited time. But given the fact that you are getting briefings, and yes, the UAE is a strategic

What what I will s- what I will say in all honesty, Congresswoman, is um the briefings that I've had about the UAE and G forty two are not substantially out of step is that the UAE has mostly um on the whole complied uh with a lot when the US government expresses concerns uh to the UAE government on various transactions involving China the UAE has mostly works to address those concerns. And if I could just add one more thing um it what they what the the issues that have been points of concern are not substantially out of step with issues that are, that tend to be concerns with a vast majority of partners, not just the UAE,

OK.

including Canada.

So I'm gonna have to, you can probably get to some of this in an additional question. Did the administration conduct a thorough assessment of G forty-two's ties to China before bringing it into the Pax Silica initiative?

You know, there's only so much that I can talk about in an unclassified setting, Congresswoman, but we did a very thorough due diligence

Could you then share the unclassified assessment with Congress,

on

with this body? I mean, if if the information that you received, you're suggesting, did not imperil the agreement, is that information that you could share?

I I so I just did. And and the assessment is that the the issues that have been points of concern about the UAE's connections to China Um, the UAE government has actually undertaken steps, verifiable steps, to correct for those concerns when they were presented.

So has G forty-two severed ties with the PRC?

And Uh, to the best of my knowledge, yes.

OK. OK, well thank you. Do you anticipate that the

And and and and if I could just add, not only have they severed ties,

I have only forty nine seconds,

but they OK, OK.

so when you're when I'm when you're I'm done, you can say that. Did you anticipate that the do you anticipate that the administration will green light more advanced chips to G forty two?

I'm not aware of any plans. Um, the chips that have already been um authorized in the bilateral uh AI acceleration partnership are obviously substantial. I'm not aware of any additional plans um to um authorize new chips on top of that.

OK. So I think, and many members of this committee, and folks in the intelligence community, I think that it is a blatant act of uh corruption for the president to give a company access to advanced chips, um especially when the chair has personally paid him hundreds of millions of dollars. I know you can't speak to that, but I did send a letter with the ranking members of four separate committees to the inspector general of the commerce department, to investigate what is going on. I thank you for your testimony, and I thank you for the answers that you have shared today, and I'm sure that you can now say, cuz I'm sure the chair will give you time, to reference that article that you have with you and with that, Mister Chair, I yield back.

Sure, so I'll I'll I'll be very brief, but I'll just say that um on your point about G forty two, not only am I not aware of any ongoing ties between G forty two and China, but um G forty two in an act of good faith has undertaken voluntary steps to actually create um a new infrastructure platform that uses cryptography and end-user verification. in order to track every token on their cluster, to provide an unprecedented level of transparency, to help give us assurance that their clusters are actually not being used in ways that violate US law and UAE laws. And and I think it's it's a welcomed step. Um our approach is trust but verify, and so and ultimately um we we very much welcome the steps that they've taken.

what's that

i said you have very strong eyebrow game by the way

ah thank you thank you

what eyebrow

was that on your time or chairman of chairman mccall's or chairman emeritus mccall

oh thank you mr. chairman i think your eyebrows are great

yeah

for the record Um, secretary, it's great to see you. Um, and uh, let me uh commend and apply to you for uh your recent appointment to secretary. I I wanna commend the administration for their picking such a talented person in the technology space. You know, I've I've um uh been to your um hill or valley to the hill, you know, summits here on the hill, uh talking about technology. Uh, you were also, you know, on the China commission. for many years when I was chairman, uh worked really well with you on your recommendations on China, as they are the great power competition we face. And I know, I know your personal views about China and your public views, and they pretty much are the same. And it is that China is the greatest threat that we face. Uh, today I w- I wanted to give you an opportunity, if you haven't uh so far, I I know this Pax, uh, Silica is um a very interesting concept to me. And it's uh, you know, an alliance between the United States and our partner nations, uh, moving forward on technology. Um, uh, obviously it's uh semi-conductors, but AI, which is gonna be, is the future of warfare. When we talk about advanced weapons systems like the AUKUS uh bill that I passed bringing together UK and Australia, United States, to uh advance ai technologies and um and also uh quantum with advanced weapons. Now I know that's not under your the e department that's more arms but if you could uh I know you just got back recently from india uh and had a very successful uh meeting with uh uh mister modi uh over there i wanted to give you an opportunity to talk about the importance of of poxilica what it is doing to advance our interest abroad and and to accelerate the core AI race against uh China.

Thank you so much and um uh I'll I'll be brief to be mindful of time, but I I completely share your sentiment, it's great to see you and and uh you you were indeed at the very first Helen Valley forum many years ago so it's been great to work with you all these years. Um with respect to PAC-silica, so we have three lines of effort, uh the goal is to secure our supply chains and we wanna focus on artificial intelligence. Uh because we believe it's one of the most transformative technologies that will affect the future of our economy. Um our three lines of effort include membership, so focusing on being very deliberate and strategic about the composition of the group. Uh the group now includes Japan, South Korea, Singapore, Australia, Israel, the UAE, Qatar, the UK, and Greece. Um we included India uh just about three days ago. And uh Taiwan i is also part of the group. Um the second track is projects, infrastructure projects um and uh when it comes to projects we're focused on logistics infrastructure and industrial capacity. The basic i the basic premise is we believe that logistics is key if we wanna secure our supply chains, because we can have access to minerals and factories, but if we don't have a way of moving things around efficiently and in a cost-effective way, um that we we will not have uh secure supply chains. An industrial capacity because we need we have offshored all that capacity, our supply chains are filled with thousands of vendors that we have very little visibility into, and so we wanna create an environment where we reduce the information silos and we have more industrial might, in order to do surge capacity when we need to. The last line of effort is policy. We wanna cor we wanna use PACSILICA as a platform to coordinate at a policy level with our partner countries, in especially and including for uh developing baseline definitions for us to agree, for what we um how we define sensitive technologies and critical infrastructure. We wanna coordinate on anti-dumping practices and market incentives, and we also wanna agree on a pro-innovation agenda for AI.

Well, I think this is one of your legacy items, and I'm I'm, you know, I'm glad again you're in the position you're in to advance these sort of creative ideas. I always find, Mister Chairman, when you you have an economic alliance with countries, you know, in addition to the weapons sales that this committee does, but, you know, military, but then the economic and diplomatic efforts really solidify those alliances with a common uh goal uh against our adversaries. And I think that's precisely what PAX uh, Silica does, I look forward to hearing, yeah, more good news from you on that issue and um, let me commend you for your service, sir, and with that uh, my time has expired, I yield back.

Thank you. Chairman Emeritus McCall.

Thank you.

I think I wanna repre- recognize represented, I don't know if I wanna recognize your father? Does, that's your father over there?

He's smarter than I am, so that you might get a better speech, but uh,

Feel like I'd love to recognize your father to say a few words about you.

yeah, that's my father. Oh no, no, no, we don't, we, we don't want that.

I bet.

No. Say. My time? All right. Well, thank you, thank you.

All right, you're right.

Thank you, Mr. Chairman. Um, I do have my my father with me, and as the grandfather and a father to a Jacob, we're very proud of the work that you're doing. And thank you for all the testimony you did. I'll try to be a little more polite than some of my Democrat colleagues were, um, a little bit a little bit earlier. But I I think what's important about your testimony today is that economic power is American power. And we should be primed to be and remain that superpower, cuz we have three things that other countries don't have. In many cases, we have extraordinary natural resources that we can harvest, not in all, but in many cases, certainly in energy, for example. The size of our economy makes us extraordinarily powerful, because we are a market that people desperately need to be in if they wanna be successful. We're the largest market in the world, and we need to leverage that power. And then s- and then third, we have an entrepreneurial spirit in this country as part of our culture, that you don't find anywhere else. And as somebody who started, built, and grew, three entrepreneurial businesses, I know what that is like. You don't find that entrepreneurial spirit. I once saw a statistic that said that the size of the Home Depot as on a market cap, is larger than all of the, uh, the businesses that have been started in Europe over the last several decades. They just don't have that same sort of entrepreneurial spirit that, that we do here. And so the strategy that we have now has gotta be focused, and I know you're doing this. It's, it's about making trade fair, it's about making sure that we have access to those critical minerals, uh, making sure that we have national security in what we make and build, so we're not ever again dependent on China like we were during COVID. That was a real problem. Making sure we harness energy and making sure we continue to make sure America is the most innovative economy in the world. So with that said, I wanna ask you what your strategy is as it relates to critical minerals throughout the world. Because that is something that we may not simply have enough here in America, if we just stick our shovel in the ground, we'll be able to get what we need. Most things we do, but some of these critical rare earth minerals we don't. So what's our plan to get them and to prevent Chinese state companies from pushing us out of the market?

Thank you for the opportunity to um opine on that, Congressman. So our strategy for critical minerals, this is actually a centerpiece of the work that we do um uh for Pacsilica. Um our strategy for critical minerals really involves leveraging the expertise of the private sector in order the most promising highest impact mineral refining and mineral extraction projects. So as and I'm sure your teams have experienced this too, the US government gets flooded with thousands of projects. Everyone has a mineral project these days. The the challenge is how to prioritize which projects are real and which projects are are brownfield and actually have uh the real opportunity to scale. and provide scale. We want to pursue a a concentration of force strategy, where we focus on a finite number of projects that have the highest potential and that can provide uh that that can deliver on the biggest scale possible. So I've directed my team to prioritize those projects. I told them uh to provide me with a list of the ten most promising projects for refining and the ten most promising projects for mining. um we are evaluating those projects as we speak we wanna use private sector capital to actually capitalize those projects we are facilitating offtake agreements in order to insure uh stable sources of revenue for those projects and we have um uh we're we have ongoing conversations with the development finance corporation to provide supplemental financing where needed um for those projects the last piece that i would add beyond the coordination of offtake agreements and the provision of capital the key is pricing the market works incredibly well provided there are real you know market dynamics which obviously we are in the situation we're in because we have not had a free and floating market we have had a market that has been the target of dumping and abuse by state owned chinese mineral companies that have artificially depressed the price for years and that have intentionally driven everyone out of business. And so part of what we've done is when we convened the critical minerals ministerial on February fourth, the administration unveiled a uh pricing mechanism that would actually help offset the depreciation in price of minerals coming out of China. Price is the key to unlock private capital. If we provide investors with price stability, private capital follows. And so we're we're looking at those two lines of effort.

Good. And and I would simply note that the reason they depressed the prices for so long is to put everyone out of business and then they can raise them to whatever they want and so it is a predatory strategy used to damage us long-term. Again, we appreciate the work that you're doing and and keep it up. Mr. Chairman, I yield back.

Thank you.

Thank you. Who wants to go first, Castro or Sten? All right, Mister Stanton, you're up.

Thank you very much, uh, Chairman, for that wise decision. Under Secretary Helberg, I have constituents currently stranded in Mexi-

Don's expired there.

I have constituents currently stranded in Mexico following the operation that led to the capture of the drug cartel leader known as, uh, Mel- El Mencho, and his, his killing. We have received numerous reports from constituents that the State Department's Consular Emergency Hotline, the number that they put out publicly for people to call, uh, is going unanswered. My own staff has tested the number repeatedly. No one picks up. I'm asking you to maybe contact the leadership of the department, including Secretary Rubio, to let them know if they're gonna put that number out there, such an emergency situation, um, you gotta have people to answer the phones. You gotta ramp up staffing, uh, on that. Obviously it's great frustration and angst for the people stranded in Mexico currently. Mr. Chairman, commercial diplomacy is the daily on the ground work of advancing American economic power. But commercial diplomacy requires credibility, competitiveness, and coalition building to be effective. Unfortunately, President Trump's tariff regime is single-handedly, illegally, unconstitutionally destroying all three of those pillars. First, Trump's tariff regime is inherently and blatantly illegal. We tell the world we believe in rules-based trading system. We expect countries to honor agreements and follow the law. That is how the United States must lead. On Friday, the US Supreme Court ruled in a six three decision that Trump's IEPA tariffs were illegal and unconstitutional declaring quote "the framers did not vest any part of the taxing power in the executive branch" unquote. Instead of respecting that decision, Trump announced a new fifteen percent blanket tariff. This disregard for the rule of law at home makes it a lot harder to demand it overseas. Our diplomats should be enforcing standards, not explaining why our own policy keeps shifting. Credibility is leverage. This action by the president makes us weaker. Second, the issue of competitiveness. A tariff is a tax that is paid by the American people. And yet this major- Republican majority and its leadership have rolled over for this president even as they block democratic attempts to reassert congressional power. power the Supreme Court has re-formed is belongs here in the House of Representatives, even as the average family in America paid on average seventeen hundred dollars more per year in additional costs. Now, I have the honor of representing Chandler, Arizona, in Congress, and recently the Chandler Chamber of Commerce connected me with one of its leading members, a company called Falco, a small aerospace manufacturer in South Chandler that makes specialized aluminum products. for the aircraft supply chain, including customers like Boeing, Cessna, and Lockheed Martin. They need a specific aerospace grade aluminum that is not available anywhere in the United States. So when tariffs hit, Falco could not switch to an American supplier. They simply had to eat the cost. Falco's Chief Operating Officer, Greg Faley, is here with me today. Please stand, Greg. Um, he is my guest for tonight's State of the Union. He said Falco's costs have gone up seventy-two percent this year because of these tariffs, that meant he can't hire, that means that Falco can't hire more people or meet the needs demanded by our national security industry. And the president still hasn't learned from his mistakes. After the Supreme Court ruling, Trump turned around to bash the justices of the Supreme Court and immediately put another fifteen percent blanket tariff, another tax on the American people. That weakens both the United States companies and commercial diplomacy. These tariffs are not just defeating, they are self-defeating. Third, on the issue of coalition building. Commercial diplomacy is about working with partners. I also serve on the China select committee. If we are serious about competing with China, we need our allies with us. Retaliatory tariffs spark retaliation. They strain relationships. themselves from swings in US policy. Close allies begin boycotting American goods. Supply chains are weakened because Trump made it more expensive to sell to the United States market. And our biggest trading partners started to make trade deals without us. Just this week, Canadian Prime Minister Carney is working to diversify trade away from the United States. This comes after he had warned, uh, warmed trade relations with China. Undersecretary, You have a very important job. Commercial diplomacy is essential to opening markets for US companies, protecting American innovation, promoting investments in our nation. But your boss is illegal and uncomfortable tariff war is working against you every day. I wish more of my colleagues on this side of the aisle would have your back like we need to. I yield back.

Representative Castro.

Uh, thank you, Chairman. Under Secretary Helberg, you've described Paxillica as turning, quote, diplomats and the business development officers for American AI. You personally negotiated the UAE's entry into the initiative in January of this year. And you keynoted India's session just last week. The explicit purpose of this initiative is to help American AI companies sell their products and expand into allied markets. Is that a fair characterization?

The the goal of the initiative is to secure our supply chains, Congressman.

And your federal ethics agreement acknowledges, and again I'm quoting, quote " heightened risk of a conflict of interest in artificial intelligence software." Your filed ethics forms confirm that you divested from directly owned stock in AI and semiconductor companies, but you'll, you will continue to indirectly own stakes in AI companies like OpenAI and SpaceX through equity stakes in the Founders Fund and CoSLA Ventures. That stake was explicitly retained on your ethics agreement. It wasn't divested.

That's not correct, Congressman. I actually divested from uh OpenAI.

You, but you still retain an interest in OpenAI and SpaceX through Founders Fund? You still have a stake in Founders Fund?

That that that that that

And COSLA, COSLA LA?

that that

Or COSLA?

uh that's not correct, Congressman. I've divested all my interest um uh from um

From both of those pieces, from Founders Fund and

From from uh I divested, I divested, um, the interest in OpenAI. Um, I divested most of the Founders Fund interests.

Does your spouse own stakes in those?

Um. That's right, that's right. Well, we're talking about the same assets.

Go, so your, your household, just like for members of Congress, we've gotta disclose what we own and what our spouse owns.

Well, you guys aren't subject to nearly a d- a hundred and eighty, a hundred and eight page ethics agreements, respectively. But, um, but yes, I

But your, so your, in your household, your, your spouse owns what I've described.

Yeah. Yeah, sure.

OK, sure.

But but well, but what I'm saying is that we've divested from those.

But I just but I just asked you and you said yes, your spouse still owns

No, no, you asked me.

Founders Fund and

You I I I was saying that these are the assets of my spouse. They're not mine.

Right.

They're treated as one and the same for the purpose of ethics.

Right.

Uh, but what I'm saying is we have divested from uh our stake in OpenAI and most of the Founders Fund interests.

Yeah, I said that you'd you'd directly divested from OpenAI, right? But through Founders Fund and SpaceX, that, or I'm through through Founders Fund and Coesla Ventures, they still have stakes in those companies. Is that correct?

No, Congressman, uh what I'm saying is I no longer have any financial interest in OpenAI, direct or indirect, and that I that we have also divested from most of the interest in Founders Fund.

OK. Then if we we'll go through Yeah, no, absolutely. Uh, that we, uh, we must have an old filing then. All right.

Probably, yeah.

So, then let me ask you about mining. Illegal mining for critical minerals, gold and other materials is recognized as a major and growing in a transnational criminal economy, frequently linked to money laundering, human trafficking and violence. It also contributes to the significant arms trafficking in the region, some of which has been on display in Mexico after the recent killings of a What specific taps or steps are you taking at the State Department to leverage diplomatic engagement, foreign assistance, and law enforcement cooperation, alongside commercial policy and other measures, to more effectively disrupt illegal mining networks?

So, our biggest priority, Congressman, is uh to advance our national interests and our biggest prior- and the biggest pain point from an economic security standpoint is our mining reliance on China. And so we're working to de-risk those supply chains. We are working um in tandem with countries who are home to large mining concessions, whether it's the Democratic Republic of Congo, Australia, um along with various South American countries, in order to identify brownfield mining concessions, as well as the opportunity to um to expand refining capacity uh within the next twenty four months. um through the the deployment of capital to to expand existing refineries.

Right so but I wanted to ask you specifically um you know what steps you're taking, what measures to more effectively disrupt illegal mining networks.

So my understanding is that a lot of the illegal activities are actually being conducted by Chinese run companies in Sub-Saharan Africa. And so the best thing that we could do to fight illegal mining networks is actually um um uh buy out uh China's stakes

I'm out of time.

Thank you, Representative Castro. I often save my questions for the end, and uh I have a couple of questions for you as well. Uh, as Under Secretary of State for Economic Growth, Energy and the Environment, I would love to hear your threat assessment of China. What to your extent do you believe, uh or rather what do you believe is the extent of trust that you have in China, whether they you trust they will do something or you trust that they will not do something? Outline to me your threat assessment in China, please.

Thank you, Mr. Chairman. The administration's policy towards China is we want a stable, constructive relationship with China. With that being said, it is also true that um we do not trust China. And having a stable relationship with them is not in contradiction with not trusting them.

Mm-hmm.

Um China has not given us many reasons to trust them. The world, one of the reasons why the president's tariff policy is so important right now is because the much of the world that does not have similar tariff regimes is is on the receiving end of what many are characterizing as a China shock two point O. China's export surplus towards the rest of the world exceeded one point two trillion dollars last year. A record. They are flooding the world with cheap smartphones, they're flooding the world with cheap telecom, they're flooding the world with cheap BYD electric vehicles. Um and frankly, it's a major problem for Europe, it's a major problem for Southeast Asia. Um a lot of European governments are actually increasingly becoming vocal for the first time in my lifetime, they're becoming increasingly vocal about the challenges that China faces, so they're a formidable economic competitor and adversary. And so we are working to out-compete them, while at the same time doing what we have to do to secure our supply chains and make sure that our companies are built on sound foundations where they can build and lead the world in technology.

Thank you. Is there a place that you assess uh China will not seek to overtake the United States?

China, um, has made no qualms about their plans to try to overtake us to their great chagrin they are decelerating economically um and you know in in two thousand nine the bbc and goldman sachs issued a forecast that by twenty twenty five china's economy would overtake the united states and it is a quintessentially american underdog story that Uh America has defied all those forecasts uh of people who predicted American decline. Um America remains the world's largest economy by a lot. Uh at the end of last year the world's top ten companies um in the world by market cap were all American companies. And so we are in a very strong position. With that being said, as you know from your life in politics, the only way to compete in a race is to run unopposed or scared. And so we can't take anything for granted, which is why we are uh working in as fast as as humanly possible to secure our supply chains.

In a race, I'm uh I want us to run faster, but I always say I'm not afraid to trip up uh those that we're running against as well. This isn't about a fair race. This isn't the Olympics, right? We're not running around a track uh looking to to have a fair competition. We're looking to uh destroy an adversary that's working to uh actively destroy us, which not to put words in your mouth is what I am surmising of your assessment. Um, again, not to put words in your mouth, do you assess there is a situation where China willingly concedes uh that America will dominate that sector?

Eh, sorry, which sector?

Do you assess that there is a sector that China will just concede, all right, America you can have that, America you can dominate. Do you assess that there is a sector they will concede to us?

My assessment is on on all the most important sectors related to technology, China has very well laid out

God for that.

We're we're playing to win. And so w we we do wanna have a stable constructive relationship with China, The president has a positive relationship with Xi Jinping. At the same time, we're about the US of A, and we're never gonna apologize for putting America first.

That's exactly what I expect out of you. I'm never gonna apologize there for that as well. Uh, same line of questioning, is there uh, and y- you talk about uh their desire to dominate, and in their desire to dominate, do you assess there is any sector, any industry where China will not dump and depress, as you were talking about earlier.

Um, Congressman, I I can't currently think of an industry where China doesn't engage in the depreciation of uh artificial uh depreciation of prices.

Very good. I uh thank you for answering my questions today. My time has expired, even though I guess it's my time and I'm the only one here now. Um but I am gonna move to a a closing statement. And what I typically do when I move to closing statements is I give our witness or witnesses an opportunity to uh respond to things that you haven't had the chance to respond to you've had a lot of uh accusations and things thrown at you, and uh i only want a yes or no answer and uh no opportunity for you to really answer things but uh i guess maybe i would frame this opportunity for you to close uh, close this hearing out with you said we're very competitive that defines us as americans that we are competitive right uh i always loved the old speech from uh george uh s patton uh where he's talking to the army and he's saying You know, Americans love a winner. They hate a loser. To Americans, the idea uh of losing and laughing is hateful, right? We like love the uh big league ball players and the championship boxers. Uh, you know, basically we don't lose and laugh. We fight and and we fight to the end. It's why we've never lost a war and we'll never lose a war. We're just different. We're built differently and I'm damn proud of that. So, tell me uh in your words uh about where you're most proud of the competition that we've levied in this last year against the rest of the globe. Uh. in uh this closing remarks, if you don't mind.

Well, let me just say that um as someone who spent most of my adult life in Silicon Valley and in the tech industry I'm incredibly proud of the ingenuity that our country has had. Um we have defied the odds at critical junctures when people least expected it. Um at many points in our country's history when the um academic parlor halls have prognosticated the slow gradual managed decline of our country we all was surprised. Um when China launched its hypersonic missile and said that it was the end of America, uh America surprised the world with um uh actually surging ahead in artificial intelligence. And now China is panicking to catch up and is obviously stealing our technology to do it. And so um and so it's It it I'm incredibly proud. Our policy really has three pillars. Uh, Mister Chairman, we wanna win the AI race and the technology race writ large. We're very proud that Paksilika now includes eleven signatories in three months, India's accession, the chip concierge service, two hundred and fifty billion dollars in investment from Taiwan, and recently the rollout of the maritime action plan that all contribute to American strength. We are committed to using every tool in our toolbox, whether it's sanctions when necessary, when we wanna produce maximum pressure for maximum change, um as well as diplomatic and commercial partnerships, and the and thirdly, we welcome working with Congress as a partner to achieve the objectives that we care about.

Anything else?

That's all I have.

Very good. I wanna thank you, Under Secretary, for your valuable testimony. I wanna thank other members, uh, if they're watching, uh, for their questions. And members of the committee may sa- have some additional questions for, uh, yourself, Under Secretary, and we will ask you to respond to those in writing, in that, uh, pursuant to committee rules, all members may have five days to submit statements, questions, and extraneous materials for the record. Subject to length limitations without objection, the committee stands adjourned.