U.S.-Mexico-Canada Agreement: Evaluating North American Competitiveness

[Gavel sounds.] This hearing will come to order. Thank you all for joining us today for this timely hearing on the U.S.-Mexico-Canada Agreement, or USMCA. Almost exactly six years ago, Congress and the president approved the USMCA, and Senator Wyden and Senator Grassley and Senator Hatch were very instrumental in negotiating and helping to bring that to the finish line. The Senate overwhelmingly endorsed this agreement 89 to 10, the most bipartisan vote ever taken in the Senate on a free trade agreement. This demonstrates the broad support for the trade deals that expand jobs, wealth, and growth in the United States. Six years later, we are now on the road to the agreement's first joint review, where we can assess whether the USMCA commitments deliver as intended. The answer is largely yes. Overall, the USMCA protects American jobs, strengthens domestic manufacturing, and continues to grow the U.S. economy. For example, trade with Canada and Mexico supports 13 million American jobs. That's roughly the population of the entire Pacific Northwest. Moreover, since the enactment of the USMCA, $775 billion were invested in the United States from Canada and Mexico, which is a 55 percent increase from pre-USMCA levels. USMCA propelled the United States to export $60 billion in agricultural goods to Canada and Mexico, which represents one-third of all U.S. agriculture exports. Is USMCA a perfect agreement? No. But no agreement ever is. For instance, I have long called for more robust enforcement of USMCA commitments, including but not limited to ag biotech, dairy, digital trade, energy, financial services, and intellectual property. In fact, both chambers of Congress approved USMCA with large bipartisan majorities largely because of its strong rules and mechanisms necessary to enforce those rules. It is therefore critical for the United States to ensure that all its stakeholders, including U.S. farmers, businesses, and workers, fully benefit from the USMCA. I appreciate and commend President Trump and Ambassador Greer's unwavering commitment to enforce the agreement, and I look forward to working with them in that effort. But as the USMCA review process proceeds, it is wise also to remember to not let the perfect become the enemy of the good. Mexico and Canada are two of our most important trading partners. That strong partnership will continue to drive forward America's economic competitiveness. This trilateral relationship should not be taken for granted. This message is generally reflected in the 1,500 comments submitted to the U.S. Trade Representative in December. As Ambassador Greer recently acknowledged during a finance briefing on the USMCA, many stakeholders expressed support for the USMCA and many explicitly called for the agreement to be extended in those comments. Many of those public comments conveyed the singular importance of business certainty, which is best achieved by timely conclusion to the review and an extension of the agreement. Today's hearing is an opportunity to continue conversations necessary to deliver on USMCA and business certainty in the United States. I look forward to hearing what our knowledgeable witnesses have to say as we evaluate the issues underlying this first joint review. And with that, I want to say I also want to again thank Senator Wyden for the work that he did when he was in the leadership of this committee with Senators Grassley and Hatch as you put this agreement over the finish line in the Senate and look forward to working with you as we try to move forward on this review process. Senator Wyden.

I thank my colleague and as he knows and we talk about often, in the Pacific Northwest where we're from, this is an enormously important issue and look forward very much to working with you and with all of our colleagues. I am going to start though by noting that the House last night voted to repeal Donald Trump's tariffs on Canada, tariffs imposed in spite of the USMCA and most notably without the support of Congress. Trump's chaotic tariffs are losing support across the political spectrum. Now the Senate needs to get that legislation to the president's desk and deliver some relief to American workers and to businesses as soon as possible. With respect to today's topic, let me start by talking about the fact as noted, the USMCA is a good agreement that passed with extraordinary bipartisan support. There were senators who as my colleagues know had never voted for a trade agreement and they joined forces for a bipartisan agreement here. That agreement promised to open up export opportunities for American farmers and businesses and it promised strong standards on labor and the environment. Let me tell my colleagues this morning that at some point I will be shouting this from the rooftops, but today I will be a little bit quieter. But I want people to know that without strong trade enforcement, trade agreements are not worth the paper that they're written on. A trade agreement can't achieve its intended goals unless it's strongly enforced. Since Donald Trump took office last year, his U.S. Trade Representative has not begun a single enforcement case under USMCA. It hasn't even taken the first step. As a direct result, there are real and legitimate concerns about USMCA not living up to its promises. And the biggest culprit is an administration and a president who's more concerned with settling personal scores than putting American workers and our businesses first. If the executive branch won't do its job, then the United States Congress needs to take back its constitutional power over trade. And I want to make it clear that I believe Congress should have a bigger say on trade and tariffs and on holding the executive branch accountable for actually enforcing trade deals which is not getting done now. For the first four years after the USMCA was implemented things were looking up. Trilateral trade reached $1.9 trillion in 2024, up nearly $400 billion. U.S. manufacturing hit an all-time high of nearly $3 trillion in 2024. USMCA fueled over $60 billion in agricultural exports, something that Senator Crapo and I feel very strongly about as a priority in the Northwest. And finally there was an opening of the Mexican market for American fresh potatoes which as the record will show are better coming from Oregon than Idaho, but this was a big, big deal after two decades of unsuccessful talks. Then Donald Trump took office. Since then, random slapping of tariffs everywhere in sight. There was havoc on our supply chains, chilled investment, and driven our allies towards our enemies. U.S. manufacturing contracted for the 10th straight time in December with slumping orders and higher input costs. Exports to Canada, a hugely important trading partner, fell 23 percent. Canada is strengthening instead its economic partnership with China, which could have enormous impact on Americans and car manufacturers. So the Finance Committee is meeting today to talk and I look forward to working with all my colleagues to talk about what comes next. Early signs indicate that Donald Trump is considering tearing up USMCA. Now why would that be? I guess he wants to throw out tariff threats and bully other countries no matter the damage to American jobs, trade, or national security. If Donald Trump wants to yell at somebody for not doing their job on USMCA, my own take is he ought to look in the mirror. The fact is USMCA delivered real wins for Americans. It included strong rules on labor and environment and new enforcement tools with special credit to our colleague who sat down there, Senator Sherrod Brown, and I was pleased to be able to join him when he put together the rapid response mechanism to actually enforce trade laws. It created new opportunities for jobs and economic growth in innovative sectors like digital trade and services, another area where the chairman and I have some joint interest. And it strengthened supply chains and political alliances with our neighbors promoting North American competitiveness in global markets. Without USMCA in place, supply chains can be disrupted, prices go up, American alliances unravel, and North American workers, businesses, farmers, and ranchers are less able to compete with China. That's why USMCA was backed by such a broad alliance. Stakeholders across the political spectrum from labor to business to college professors pushed for the passage of the bill. And as was noted, 89 votes. You can't normally get, I see Chairman Brady here, normally you can't get 89 votes around here for ordering a soda. That was a big, big deal. But USMCA can only reach its full potential if the U.S. enforces strong rules. And if colleagues think I'm getting repetitive with respect to enforcement, guess what? You haven't seen anything because it is absolutely critical to getting this job done. So let me close by saying the USTR should use this six-year review to deliver for farmers and workers and small businesses high-skill, high-wage jobs that give families an opportunity to prosper. Give Americans what they bargained for and it's going to take a partnership with Congress, a commitment to enforcement and transparency with the public. And I'll just close by saying I'll work with anybody on all sides of the aisle in order to get a trade agreement that does those things. And I yield back, Mr. Chairman.

Thank you, Senator Wyden. And although we can't ever agree on potatoes, everybody knows where the best potatoes come from. We do agree on how critical enforcement of trade agreements is, and that's something where I think we can make a lot of progress together. In a moment, our witnesses will share their opening statements. Before that, I will provide a short introduction of each witness. Chairman Brady is a senior consultant at Akin and co-chair of the Coalition for North American Trade. He also served as the chairman of the House Committee on Ways and Means where he authored the Tax Cuts and Jobs Act of 2017, and we thank you for that great work, Chairman Brady. And he secured the passage of the USMCA. Chairman Brady represented the 8th Congressional District of Texas from 1997 to 2023. Mr. Gottwald is a policy specialist for trade and international economics at the AFL-CIO, where he is an expert on the promotion of international labor standards in trade agreements and global supply chains. Prior to joining the AFL-CIO, he was deputy director of the International Labor Rights Forum. Mr. McCarthy is president and CEO of MEMA, M-E-M-A, which serves as the voice of North American vehicle suppliers. He has 29 years of experience in the auto industry and previously led the automotive and industrial products strategy practice at PricewaterhouseCoopers. And last but best of all, from Idaho, Mr. Vander Schaaf is a third-generation dairyman who along with his wife owns and operates Vander Schaaf Farms in Kuna, Idaho. In addition to managing daily farm operations, he serves on the board of directors for the Idaho Dairymen's Association and Darigold. We will begin with Chairman Brady's opening statement, followed by Mr. Gottwald, Mr. McCarthy, and then Mr. Vander Schaaf. Chairman Brady.

Thank you, Chairman Crapo, Ranking Member Wyden, members of the Senate Finance Committee. Thanks for the opportunity to appear before you today to testify in strong support of the U.S.-Mexico-Canada Agreement. It's truly terrific to be here. In Congress, it was an honor to work alongside you, then-Chairman Grassley, Ranking Member Wyden, Chairman Neal, Ambassador Lighthizer, now Ambassador Greer, to develop and secure historic bipartisan support for the agreement. USMCA negotiated by President Trump is the gold standard for U.S. trade agreements and a signature achievement of his first term. The agreement was viewed correctly as such a major win for U.S. workers, manufacturers, farmers, and service businesses. It secured, as you said, the unprecedented bipartisan support of 385 lawmakers in the House and 89 in the Senate. Due to its smart design of zero tariffs and low trade barriers on crucial products, its exemptions from other tariff levies, and its integrated supply chains that share resources across three nations, the United States today is economically stronger, more secure, and strategically positioned to compete and win against aggressive foreign adversaries in the future, like China. Here is remarkable perspective. As a result of President Trump's USMCA, today Canada and Mexico together are now America's top customers, top investors, and major suppliers all in one. This is an unprecedented commitment to America's success that no other countries can claim. As customers together, they buy five times more Made in America products and services than any other country in the world, supporting 13 million jobs. They are together now the largest investors in America. Since President Trump's agreement took effect, annual investment by our two neighbors has surged 42 percent, approaching $900 billion last year. Investment by Mexico and Canada in U.S.-based manufacturing has grown nearly 20 percent, and investment in U.S. technology production has more than doubled. Mexico and Canada are already delivering on President Trump's mission to attract foreign investment in the jobs it brings to America. And today they are America's most important suppliers, delivering on President Trump's charge to strengthen supply chains for America's national economic security. Together, they lead the world in helping the U.S. establish a reliable and resilient industrial base that runs on nearby trusted materials. The ready access to critical minerals, energy resources, and manufacturing inputs are crucial to competing globally in advanced sectors like AI, semiconductors, medical technology, and manufacturing. By incentivizing production, sourcing, and investment in North America, USMCA is reducing reliance on China and other state-driven supply chains, limiting exposure to hostile or unreliable actors. And looking to the future, I think the most powerful economic argument for strengthening, preserving, and extending the USMCA is that this proven partnership ensures America can compete and win against the most aggressive foreign competitors in the world. Make no doubt the success of USMCA is a result of Congress's bipartisan leadership in shaping and improving the agreement. That bipartisan work is reflected in overwhelming public support, with three-quarters of Americans today viewing USMCA as good for America's economy and good for their standard of living. USMCA is clearly benefiting America. But as the chairman said, no trade relationship of this magnitude is perfect. The six-year review process offers an important opportunity for the U.S., Canada, and Mexico to build upon this strong and enduring relationship, starting with fully enforcing existing commitments. This review, as Ambassador Lighthizer assured us at the time, is a critical tool to ensure increased oversight and input from Congress to the executive branch. The USMCA is the most consequential trade agreement in the world and will only grow in importance as global competition intensifies, especially from China. So Mr. Chairman, let me close with the question I think that is at the heart of this review. If your country was a successful company, and America is, and you had a business partner that was your largest customer by far, your biggest investor, and your most important supplier, would you scrap that partnership or strengthen it? Especially as China prepares to pounce. If America wants to win, and we do, we'd strengthen it, improve it, preserve the special design that works, and extend it for the longest term possible to continue to keep winning. That is what I think a successful review will accomplish. Thank you, sir.

Thank you, Chairman Brady. Mr. Gottwald.

Good morning and thank you to Chairman Crapo and Ranking Member Wyden for the opportunity to testify on the future of the United States-Mexico-Canada Agreement. My name is Eric Gottwald and I'm here to represent the AFL-CIO, a federation of 64 different unions representing over 15 million workers across our country. In 2019, the AFL-CIO endorsed the USMCA after working with congressional allies to ensure the agreement represented a substantial improvement over the deeply flawed North American Free Trade Agreement. USMCA promised a different economic model for North American trade, one based on fair competition and respect for workers' rights rather than NAFTA's corporate-driven race to the bottom. Unfortunately, more than five years since the USMCA entered into force, it is clear that the agreement is failing to deliver for workers in all three countries. The vast majority of workers in Mexico continue to make unconscionably low wages and do not enjoy the right to organize, while American and Canadian workers face unfair competition and the constant threat of corporate offshoring. As we approach the 2026 joint review, our position is clear: the agreement should not be granted a 16-year extension without major reforms. Let me share a few areas where the agreement is failing workers, followed by recommendations to improve its performance. The USMCA was supposed to rebalance North American trade flows and narrow the United States' chronically large trade in goods deficit with Mexico. Yet the opposite has happened. Since the USMCA came into force, the United States' bilateral trade deficit with Mexico has exploded from $125 to $263 billion. This alarming data point tracks with announcements by major multinationals like Stellantis, John Deere, Nabisco, and Case New Holland to close U.S. plants and offshore production to Mexico. The USMCA also required Mexico to address its corrupt system of protection contracts, where employers signed bogus collective bargaining agreements with illegitimate trade unions that do not represent workers' interests. Yet today, protection unions continue to thrive and represent a majority of unionized workers in Mexico. The USMCA's labor chapter required Mexico to effectively enforce its labor laws, but there is no evidence this is happening in practice. For example, the newly created Federal Center for Conciliation and Labor Registration is badly underfunded and does not have the legal authority to issue fines on employers who violate labor laws. On top of that, the Mexican government has slashed the budget of the newly created labor courts. Given these failures, there has been no progress on closing the wage gap between Mexican workers and their North American counterparts. According to the Economic Policy Institute, Mexican manufacturing wages under the USMCA average just $2.76 an hour. This is roughly one-tenth of what their U.S. counterparts earn. New challenges have arisen since USMCA came into effect. For example, Chinese investment into Mexico has more than doubled, raising concerns that the agreement is being used as a backdoor for unfairly traded goods to enter the North American market. Committee members, as you prepare for the joint review, we recommend the following reforms to address these challenges: Negotiate a labor action plan with clear, time-bound implementation benchmarks to bring Mexico into compliance with the USMCA's labor chapter. Adopt more bold and direct measures to raise the wages of Mexican workers in their export manufacturing sector. For example, North American auto unions have recommended establishing a regional minimum wage for the auto sector to lift Mexican workers' wages and help close the wage gap. Adopt measures to strengthen the agreement's rapid response mechanism by ensuring it addresses Mexican companies' refusal to bargain in good faith and reduces delays in cases that go to arbitration. Restore technical assistance funding from the Department of Labor to support independent Mexican unions seeking to exercise their right to organize workers. Address the economic and security threats posed by China, including by adopting common border measures to address unfairly traded electric vehicles, steel, and aluminum. Strengthen the agreement's rules of origin and expand their scope to additional key sectors like aerospace. Finally, strengthen the agreement's weak environmental provisions and enforcement mechanisms. Committee members, we agree with USTR Jameson Greer that the USMCA's shortcomings are serious and that a rubber stamp of the agreement is not in the national interest. We strongly encourage Congress and the administration to use the leverage created by the sunset clause in the joint review to insist on improvements to the agreement so that it delivers for workers across North America. Thank you again for the opportunity to testify and I welcome any questions the committee may have.

Thank you, Mr. Gottwald. Mr. McCarthy.

Chairman Crapo, Ranking Member Wyden, and distinguished members of the committee. Thank you for the opportunity to testify on the value of the USMCA to the motor vehicle supplier sector. My name is Paul McCarthy and I'm president and CEO of MEMA, the Vehicle Suppliers Association, and it's my honor to appear on behalf of the supplier industry, which employs over 930,000 Americans, which makes us the largest manufacturing sector in the U.S. Vehicle suppliers design and manufacture the components and technologies that make up 70 percent of the value of every vehicle. Suppliers have added 61,000 jobs in the U.S. since 2015. And the message I want to leave you with today is that USMCA is working. Its preservation is essential to U.S. competitiveness, job growth, and supply chain resilience. MEMA is grateful for President Trump's vision in creating the USMCA to strengthen important economic, national security, and industrial connections. The president's strategic goal of establishing a more comprehensive and modern framework has resulted in the most stringent automotive agreement in the world. Since the agreement came into force, it has strengthened domestic manufacturing and driven growth for suppliers. A July 2025 ITC report found that U.S. parts production increased by over $37 billion from 2019 to 2024. The ITC also predicted that additional benefits would emerge as our sector fully adjusted to the USMCA's provisions. The USMCA has delivered stability, and I cannot overemphasize the agreement's importance as an essential foundation for suppliers' operations. Suppliers are capital intensive, R&D driven, and have long return on investment cycles, and this demands certainty to support investment decisions and job growth. And this is particularly true for our small and medium manufacturers. Many of them have told me that the USMCA gave them the confidence to expand operations, add capacity, and hire more workers, and we've seen that in states like Indiana, Missouri, Tennessee, North Carolina, and Arkansas. And it's driving growth for our member companies and it's enabling them to compete and win in this highly competitive global market. Let me share two examples. First, an Indiana-headquartered supplier has accelerated its U.S. investment since the agreement's implementation. The company established a new manufacturing center to serve the commercial vehicle market in the U.S. and Mexico. And because of the certainty provided under USMCA, the company has invested over $20 million in its U.S. plants. In 2026, they will achieve a 25 percent increase in employment at their century-old U.S. facility. And second, a fourth-generation family-owned small supplier headquartered in Michigan. They grew over 20 percent between 2019 and 2025, expanding production and jobs in the U.S. thanks to the agreement. The company is a net exporter and it's invested more than a million dollars in a Michigan manufacturing facility to support this growth. And this supplier's Texas plant depends on customers in Mexico for two-thirds of its sales. If access to the Mexican market were curtailed, the plant would be unsustainable and the business would shift to a Mexican competitor. The USMCA has also strengthened supply chain resilience. The ITC found that U.S. dependence on imported vehicle parts from outside North America fell by 25 percent between 2022 and 24. Our members truly build here. Over 80 percent of MEMA members who supply core USMCA components identify North America as their primary sourcing and manufacturing region. The USMCA also gives the U.S. additional leverage to counterbalance increasing Chinese influence over global trade and its power and scale in the auto industry. Lastly, MEMA is supportive of the administration's enforcement with respect to illegal transshipment. Companies cannot be disadvantaged by entities that disregard the rules. In closing, the USMCA has delivered what we want: more American jobs, more investment, stronger supply chains, and increased global competitiveness. For vehicle suppliers and for the communities that we support, it is a cornerstone of future growth. MEMA and our members stand ready to work with you to build on this success, and we urge you to preserve USMCA and provide the certainty that American manufacturers need to keep investing, innovating, and winning here at home. Thank you.

Thank you, Mr. McCarthy. Mr. Vander Schaaf.

Good morning, Chairman Crapo, Ranking Member Wyden, and members of the committee. Thank you for inviting me to testify today. My name is Ted Vander Schaaf and I am here to discuss the importance of exports and in particular the U.S.-Mexico-Canada Agreement for my industry and the targeted improvements that we are counting on to ensure that the agreement fully delivers on its promises for U.S. dairy farmers. I am a third-generation dairyman and member-owner of Northwest Dairy Association, the cooperative that owns Darigold, located in the Pacific Northwest. For the last 26 years, my wife Leslie and I have owned and operated Vander Schaaf Farms in Kuna, Idaho, where we milk just over 1,200 cows and farm approximately 1,200 acres of forage crops which feeds our herd. It is on this farm we have raised our six children and hope to one day pass it on to the next generation. For the past decade, I have served in a number of agricultural leadership roles including my current position... ...and the secretary of Idaho Dairymen's Association. As a farmer and agricultural leader, I want to share with you the importance of exports and USMCA for American dairy producers and the elements that must be strengthened as the agreement enters its upcoming review. Strong, enforceable trade agreements are essential to the U.S. dairy industry. The United States exported approximately $9 billion in dairy products in 2025, including a record 559,000 metric tons of cheese last year through November. Mexico and Canada account for 44 percent of all of those exports, making USMCA essential to my livelihood and millions of jobs across rural America. When it went into effect in 2020, the agreement was designed to improve dairy trade by establishing new U.S.-specific tariff-rate quotas across a range of dairy products for accessing the Canadian market and by limiting harmful Canadian export policies. Unfortunately, Canada has side-stepped some of these obligations. Canada continues to administer its dairy TRQs in a manner that restricts imports by reserving the vast majority of quota volumes for domestic processors who lack incentives to import. Meanwhile, distributors get minimal amount of quota while retailers, restaurants, and food service operators are excluded entirely. As a result, TRQ utilization remains well below negotiated levels, denying U.S. dairy farmers real market access and undermining the agreement. Additionally, Canada has skirted its USMCA dairy export disciplines by adopting new workarounds that continue to allow the export of artificially low-priced dairy proteins, undercutting U.S. dairy processors both here at home and abroad. Looking south, Mexico remains U.S. dairy's most valuable partner. Our industries frequently work together on a number of fronts to support farmers and consumers to increase consumption. For me personally, losing Mexico as a market would be extremely difficult to navigate and would result in dire consequences for my farm and co-op. Although Mexico has been a clear success story under NAFTA and USMCA, one key obligation remains unfulfilled. Under the agreement, Mexico committed to protect the use of common cheese names like Parmesan and Feta. However, Mexico has still not fully implemented those protections for those common names, putting U.S. exporters at risk. This is particularly concerning as the European Union expands its presence in the market and pressures Mexican intellectual property officials to restrict American usage of common names. For U.S. dairy producers, exports are critical, not just for growth, but for survival. We all agree it must continue, but a firm base depends on Canada upholding their end of the bargain and on preserving our fully open trade flows with Mexico. The U.S. dairy industry is counting on Congress and the administration to help us fix these issues that I have laid out today and to secure a better, stronger USMCA for American dairy farmers. Thank you, and I look forward to your questions.

Thank you, Mr. Vander Schaaf, and I'll start my questions with you. Idaho's dairy industry is highly competitive, as you know, and is expanding. Exports are essential and nowhere more so than in USMCA partners. Yet Canada's continued failure to comply with its USMCA dairy commitments limits the market access that USMCA should give our exporters. You've already described this pretty well in your testimony, but I'd frankly just like you to go over it again. How exactly, just describe to me in your words, how does the USMCA provide critical market access to the U.S. dairy industry? What are the mechanisms?

Thank you, Mr. Chairman. Appreciate your focus and your time on these efforts. Dairy industry really appreciates your work on here. As I mentioned, the agreement is incredibly important to dairy. Our free trade agreements with Mexico enable us to move a lot of products that might not have a home. We are ever-expanding, as you mentioned, in Idaho, growing, building plants. Pacific Northwest, we just built a new plant. We are expecting those, a lot of those products to go overseas and go into Mexico. They are our biggest customer. You know, as we mentioned, $2.5 billion go directly to Mexico. And so, you know, on the Canada front, you know, we move a lot of products into there as well. They are a little bit less, but our second largest trading partner. Continentally, you know, they are our closest neighbors. It would make sense we'd want to do business with them. We have some issues with how they are addressing the agreement. We think that there needs to be modifications. We hope that through this review process that those adjustments can be made and they would come into compliance with our desires.

Well, thank you very much. And again, you've discussed this quite well in your testimony, but what are, could you give me some detail on what types of fixes we ought to put into place?

In Canada specifically, we are looking at two issues. One of them is regarding to their tariff-rate quotas and how they're allocating those to their processors and their retailers there. It seems that they will hand those out to people that basically, frankly, can't use them. And so therefore our exports never get exported because no one is requesting them. And so we need modification to the language of that agreement so that it will be fully utilized. As well, we have issue with how Canada is producing a lot of low-cost proteins that get dumped onto our market, which depresses the market for everyone. We would like additional language put into the agreement that would modify it to where they are, you know, not able to lower their costs below our costs and depress our markets. Mexico in particular with their common name cheese, we would like to see language put in that would modify that so that we have the ability to keep sending our common names. The EU seems like they want to monopolize on some of these names and we don't feel that that's proper. If that should go into effect, it would greatly harm our dairy industry.

Thank you very much. And with the minute and a half I've got left, Chairman Brady. My local companies, including farmers, overwhelmingly tell me that it's vital to maintain the USMCA as a trilateral agreement and to quickly complete the review process. What sort of impact does this agreement and our trading relationship with our closest neighbors have at that state and local level, and why does USMCA matter to the North American competitiveness?

Yeah, the secret sauce in USMCA and the reason it works so well for the U.S. is, one, it keeps zero tariffs for most of what we buy and produce here in the U.S. It has exemptions from the other tariff levies and it is integrated. And in the 1,500 comments you noticed to USTR about this agreement, certainty and keeping that integration across all three countries was cited over and over and over again as key to the success of the agreement. And that integration not only creates affordable sourcing across all countries, encourages that investment, definitely into the United States but our North American partners as well, makes us more competitive clearly against China going forward. I think really is the key to making North American trade work for the United States.

Thank you very much, Mr. Chairman, and Senator Wyden.

Thank you, Mr. Chairman, and Mr. Vander Schaaf, let me go with one last question on dairy because it's so important and Canada's never come into compliance with its market access commitments under the law, keeping exports, our exports out of the Canadian market. Bring this home for everybody. I have town hall meetings in all my counties. So many farmers come and talk about this. Bring it home for a second. What would it mean to you and your farm if we got fully what we bargained for?

Well, I think, well first of all, Senator Wyden, I just want to go back to your earlier comments about potatoes. Uh-oh. Senator, those are fighting words in Idaho. I just want to let you know. This could get spirited. Yeah. I'm not a potato farmer, but I'm going to stand up for my Idaho boys, so just want to let you know that.

I almost asked you that question.

[Laughter.] Senator Wyden, I appreciate your efforts in these matters. I know your long-standing work on this agreement. It's been appreciated by the dairy industry. It's benefited us greatly. To your question about how does it benefit rural communities, first of all let me say if we were to lose this agreement, it would be devastating to our rural communities. This agreement allows many dollars to come back into the rural economics of America. And so it'd be no different in your rural counties nor in Idaho's rural counties. If we lost this agreement, it would be devastating. We benefit from this agreement. Currently 19 percent of national dairy production goes overseas. As we said already, $9 billion of dairy is going overseas. A lot of that's Pacific Northwest, I can say, is going overseas. And so Oregon specifically would be hurt very deeply financially if we lost this agreement.

Okay. Question for you, Chairman Brady. I remember putting in the hours and we'd go back and forth from the Senate and the House putting in the time to get this done, working the trenches. That's how you get trade bills passed. But fast forward six years later, President Trump, and let me quote him, is calling USMCA, quote, 'irrelevant' and saying, and I quote here, 'it provides no real advantage to us,' unquote. What do you think of that?

Well, I will say that I think even a great country needs allies. That's how we become greater. I think combining the strengths of our allies with ours is how we become stronger, and them as well. You want your allies to be strong, not weak. This agreement is a partnership with two very strong allies that have made America stronger, certainly in jobs, clearly in the investment that has driven our economies in such a powerful way as a result of this agreement in our partnership with Canada and Mexico. We've weathered global recessions better than any other region. Certainly now we're seeing companies move back, reshoring both to the U.S. and in our trading partners. And I look at, for example, countries like Canada. You know, we have a manufacturing surplus with Canada. We have a services surplus with Canada. And but for their willingness to sell us the energy, the critical minerals, the uranium for our nuclear facilities, all of those resources, we would have a goods surplus with them as well. They are, along with Mexico, our largest investor and certainly for all our states and local economies looking to sell Made in America products, Canada and Mexico together, they are our biggest customers by far. So I think the President, as you know, has a negotiating style that's not for the faint of heart. It can be tough and it can be harsh and no doubt I think it causes trading partners to think about the relationship with the U.S. both positive and negative ways. But I know, I know this, in the end his goal is to rebalance trade in a way that continues to boost the U.S. economy here. My view is that Canada and Mexico as those trading partners have proven to help us compete and win here and around the world.

Okay, thank you. Question for you, Mr. Gottwald. We worked together with Sherrod Brown and folks who really understand across the country what this issue means to working people on really tough enforcement. And I want to make sure we lock in again on tough enforcement. One of the areas I'm concerned about, particularly because there's so much interest in this, it looks like the Trump administration is cutting the programs that monitor labor rights in Mexico. Is that your assessment of what's going on and what do we need to do to ensure that we build on rapid response and we go even further?

Thank you, Senator. Yes, the cuts that the Labor Secretary made are really puzzling. She cut all the grant funding that supports independent trade unions in Mexico, that supports the government of Mexico's efforts to modernize their labor enforcement machinery. And that was very puzzling. I think it really took us backwards. It is essential, I want to say, on supporting independent unions in Mexico. Why is that important? It's critical because the unions are the folks with the eyes and ears in the factories in Mexico. They know exactly what's happening there, whether Mexico's playing by the rules, whether employers are honoring the agreement's commitments. And we've seen that the best RRM cases, the rapid response mechanism cases, are coming from independent unions in Mexico. So totally agree, that was very puzzling and I think Congress needs to push back on this. Thank you.

Thank you.

Thank you, Senator Cornyn.

Thank you, Mr. Chairman. Chairman Brady, obviously you and I call Texas home, a border state, and our relationship with Mexico is important to our economy as well as our national security, which I want to ask about a little bit. But there are bones of contention certainly from time to time. One of them is water. In 1944, the United States and Mexico entered into a water treaty. The enforcement of that has been fraught with problems and resulted in tremendous hardship and loss of jobs in the Rio Grande Valley. Thanks to President Trump and Secretary Rollins, now I think we're in a better place than we were in terms of the delivery of water to our South Texas farmers. But how can the U.S. use the USMCA joint review process to help reinforce compliance and accountability with Mexico to help safeguard these South Texas agricultural jobs?

Well first, Senator, thank you for your leadership on that water treaty. This has been an issue that's been troubling for Texas for decades. Your leadership, along with Senator Cruz and our congressional delegation in the Valley, to see now Mexico stepping forward in an agreement to both unleash that water to Texas, payback what is owned in the past, working with the administration, I can't tell you how important that is to our state. USMCA is a huge part of our economy. We have nearly a million jobs tied to trade in Texas, a large part of them tied to Mexico and Canada. That's at every, in every community. I mean, in our state we can drive down the road and look at the acres planted for export to Mexico. We can see the manufacturing plants that are buying exports and selling to Mexico and Canada as well. So I think here, the review I think is a key role, plays a key role for Congress. You hold the constitutional authority over trade, foreign commerce. This is an opportunity to work with the administration to make sure that their commitments are being kept, that this is being enforced across the board. It's an opportunity to improve it as well, working with Mexico and Canada in a whole range of areas and making sure the agreement itself is working for Texas workers and manufacturers and farmers, and it is.

Chairman Brady, the COVID-19 exposed the vulnerabilities of international supply chains and globalism in a way that nothing else has done, demonstrating that the Chinese approach of hide your motives and bide your time have allowed them to create a situation where we're dependent on them for a number of things, including critical mineral processing and active ingredients and medications and the like. But now China has figured out how to game the USMCA in Mexico through transshipment and foreign direct investment. And what else do we need to do in order to prevent China from gaming the USMCA through these avenues?

Yeah, that should be a priority for the review. Certainly it is for Congress that's already led on ideas on what should be done, whether it's the CFIUS-like review, tightening rules of origin, other ways to make sure this agreement only benefits Mexico, Canada, and the U.S. I think the agreement itself, Senator, could not have come, the renegotiation in 2020 could not have come at a better time for the U.S. because in this new design, in this new approach, we've enabled companies who have been able to move away from China, to move away from that China-centric controlled atmosphere and back, not just nearshore into Mexico and Canada, but now because we can work across all three countries and facilitate even better, they can anchor their supply chains in America, all of which positions us in a much stronger way against China going forward. My sense is both Mexico and Canada are coming to the table, not just open, but I think eager to work with U.S. on making sure those transshipments are stopped, making sure there is investment screening. And I think this is, at the end of the day, my prediction is that the economic security approaches, agreements in this review may be the most valuable improvement being made.

Thank you.

Thank you, Senator Tillis.

Thanks, everybody. Mr. Vander Schaaf, I get that close to right? Yes, sir. Dairy industry, how much do you all rely on seasonal workers, H-2B workers, to make your operations work?

Well, sir, first of all, appreciate the question. We in the dairy industry do not have access to seasonal workers, to be quite frank about it.

Which program you use right now, or how do you supplement labor?

So we have only access to domestic labor. We have no access to any type of imported or foreign-born labor.

How easy to get people to show up?

It's been, it's getting to be more of a struggle, I'll admit. I will throw in there on our farm side, if I have a crop farm, which I do, I am able to use H-2A labor for the farm only. But on the dairy side, because we are not seasonal, we do not have access to any of the H-2A programs that would...

So not even H, at one point we were talking about possibly expanding H-2B or H-2A to cover dairy, but you just, you have no hope right now. And I can't imagine your labor pool's going to grow over time. Would you agree with that, domestic?

Well, sir, I would counter a little bit to say that I'm a dairyman, so I always have hope. I'm an optimist. But I would say, yeah, from our prospects looking right now, it's a challenge looking forward. I would agree with you.

Thank you. Chair Brady, I admired your work on Ways and Means. I actually, back when I was speaker, shortly after I became speaker, we had a lot of people trying to file a lot of not really smart bills, so I was inspired by the very powerful Committee on Ways and Means in Congress. I created a Ways and Means Committee. The only difference was it never met. And when I referred a bill there, I told the member because there ain't no way and you got no means. You, on the other hand, did an extraordinary job as chair. And I guess the question I have for you, not only do I think we need to update and reinforce our commitment to Canada and Mexico markets, but what more should we do? What should we put our accelerator on? And to what extent, and Mr. McCarthy, you could chime in on this one too, to what extent are these other tariffs that are not, you know, we know that a lot of the tariff noise goes away because USMCA exempts a lot of it. But to what, you used the analogy in your opening statement that these are our biggest customers. So what happens, and extending that analogy, if we continue to impose tariffs outside of that agreement, how well is our customer going to receive that over time? I get using it as a device here and there, but for the long term, how does that actually make it more difficult to negotiate anything productive in the USMCA?

Yeah, and I think we all recognize the President's imposing maximum leverage on a number of issues, including on trying to rebalance these trade relationships, which I think is wise, absolutely get that. But in USMCA, those tariffs are devastating because they break up the integration that occurs across the country.

Who wins in that right now? I feel like China and other players win if we don't get that right with our key, like you said, these are our key customers.

Yeah, I agree. And I think if in the review those exemptions that have been there in the past are no longer there and there are tariffs, you have really seriously harmed the incentive for companies to nearshore and reshore. And not, again, not just Mexico and Canada, but here in the U.S., that integration, low tariff...

Yeah, if we learned anything out of COVID, you know, I think that we may be making a mistake if we think all of these jobs and all of these operations can come back into the U.S. But getting it into this hemisphere and getting it into some of our closest trading partners that also have similar rule of law and democratic underpinnings for their governmental system seems to make sense to me. And if we create more barriers, then I think it's going to have a perverse negative impact on onshoring or nearshoring operations that we do want to bring back home.

It does, and I think it makes it tougher for us all, I think, to achieve the President's goal of streamlined supply chains, critical minerals moving to the U.S. for a growing economy. So it would have a serious effect.

Mr. McCarthy, in 32 seconds, because I don't want to make Senator Blackburn mad.

Well, first, thank you, Senator Tillis. And by the way, North Carolina is a very big source of supplier jobs, over 38,000 supplier jobs, one of the top 10 states in the U.S. Yes, when we speak with our members, one of their biggest whys for USMCA is it fundamentally gives us those economies of scale and scope so that we can compete with global competition. We can compete with global competitors who often have higher scale, who often maybe be pursuing unfair business practices. This is all about strengthening U.S. manufacturing, and that's their argument about why we need to see that continuation and that certainty about the future for USMCA.

Thank you very much, Senator Blackburn.

Thank you, Mr. Chairman, and thank you to each of you for being here. Mr. McCarthy, I will stay with you. We've got about 56,000 motor vehicle parts manufacturing jobs in Tennessee, and Denso is one of your members. I think you are very familiar with them, and they have done a good bit of investment into communities like Athens, Tennessee, and Maryville, Tennessee. And we appreciate the fact that they are there. But as we look at USMCA, one of the questions that we have to ask is has this agreement increased opportunities, has it increased competitiveness for companies like Denso, and are there changes that we should be making in order to help preserve those jobs and that ability for exports from our companies?

Well, thank you very much, Senator Blackburn, and as you say, Tennessee, big source of jobs for our sector, one of the top five states of supplier manufacturing in the U.S. To your question, it has absolutely created opportunities for suppliers, and I think the numbers speak to that. We, the ITC study talked about a 12 percent increase in the U.S. supplier economy as a result of this. And they also pointed out that there's more to come, that our supply base, we take a long time to make significant changes because of our quality orientation, and they expect further growth in states like Tennessee as a result of what we've seen with USMCA and how it's had forced us to adapt and change and really modernize our supply chains. In terms of making us more competitive, what it has done is given us more resilient supply chains. One of the other findings of the ITC is that it reduced U.S. imports of parts from other parts of the world outside the agreement by 25 percent. And I think that speaks to this overall goal that's so important to our industry strategically going forward is to have resilient, secure supply chains.

Yeah, I agree with that. Thank you.

Thank you very much.

Mr. Vander Schaaf, I hear a lot from our farmers and our dairy farmers in Tennessee, and according to our Commissioner of Agriculture in Tennessee, Commissioner Holt, our dairy farmers in East Tennessee are doing about $102 million in dairy product with Canada. But what they feel is that the Canadians are not living up to their quotas and that they've not seen an adjustment with the tariff-rate quotas. What are you seeing from that because we've got, we like exporting... ...our ag product, whether it's beef or soy or dairy, and we're quite concerned about that.

Yes, Senator Blackburn, thank you for the question. Yeah, I think U.S. Dairy sees the same thing that you're seeing. I think that we're seeing Canada not fully live up to their agreement. That's what we're asking for here today is that we can modify language or bring Canada to the table to discuss the shortfalls and to try to improve the language within the agreement.

Well, it's helpful to hear from you that you all see the same thing because when I asked the commissioner for the top issues, this was one of those, the fact that these quotas are not being fulfilled. So, thank you for that. Chair Brady, good to see you.

Good to see you, Senator.

And so appreciative for your good work. In Tennessee, we have Ford, Volkswagen, Toyota, GM, Nissan. And auto manufacturing is important. As I was just talking with Mr. McCarthy, supply chains are something that are complicated and sometimes we will see with these manufacturers one of our parts crossing the border, coming back, and you've got that back and forth. So talk to me about how we can simplify this administrative and compliance burden that are on these companies so that we're preserving that manufacturing here.

Yes, Senator, and I'm hopeful the review take steps to simplify, to really streamline that process. Rules of origin are working for their mission, but the compliance is extremely burdensome. I think what our industries are looking for is consistent interpretation across borders, an effort to modernize it, both digitize, standardize, have one playbook for our companies to be able to work.

Okay, so one set of rules for the whole ecosystem.

Yeah, and if you're going to tighten it, make it real world.

Okay, hold on. Mr. McCarthy, you agree with that?

Yes, we would agree, and I think again we'd emphasize how stringent those requirements are and they've been effective as the growth in the jobs and supplier sector has demonstrated.

Thank you. Thank you, Mr. Chairman.

Thank you. Senator Marshall.

Thank you, Mr. Chairman, and welcome to our guests as well. In my humble opinion, the USMCA trade agreement's been the most important, the most successful trade agreement of my lifetime. Chairman Brady, it's hard to believe it was eight years ago that you and I were in Mexico City negotiating and maybe putting dotting some eyes and crossing the tees and maybe just briefly comment on did has this agreement lived up to what you expected it to be and more importantly, what would happen to rural America, to rural Texas, to rural Kansas if USMCA trade agreement if this review doesn't go well?

You know, I think, Senator, thanks for your leadership on this agreement. And Kansas, like Texas, is one of those states and in Tennessee where if you put our USMCA jobs together, they would be the largest single employer in our states, so it's big. I think from an economic standpoint, jobs, sales, competitiveness, there's no question the presence agreement has delivered on all of those fronts. Are there areas where commitments need to be enforced? Absolutely, and the review is the perfect time for Congress and the administration joined together to do to improve this and strengthen it going forward. I think the key for our ag, for our manufacturing, for states like ours is to ensure the design of USMCA, zero tariffs on these products, exemptions from other tariffs, levies like 232s, and then the three-country integration. That's what drives the growth in our in your certainly in your state and in mine as well. I would say top priority is to maintain that design because it is so smart, it's unique around the world, it's really proven to be the secret sauce in this agreement. So improve it, which means strengthening it, look at ways to modernize it including with China, but look to extend it longer term because those investments are helping us.

Okay. So I you probably went through the stats some of you all, but this trade agreement before versus after America's gone from $1.2 to $2 trillion. Ag exports from Kansas in general up 50 percent because to Mexico based upon this treaty, this agreement as well. I want to so I just did a trip to Mexico City. I've always thought it's easier to keep a good customer than to find a new one. And Mexico's been a great customer for for Kansas. And I was excited the great things that Mexico is trying to do to improve this relationship that seldom are reported in our national media that President Sheinbaum sent 10,000 of her own troops to the border to help secure the border. She's turned over to us multiple drug cartel leaders. You know, I think cooperating with law order with security as well. Certainly Mexico's benefited from these tariffs on other countries as more of as they so they've taken advantage in a good way, but then they turn around and put 1,400 tariffs on 1,400 some items coming into their country as well. So Chairman Brady, do you feel like Mexico's been a good partner in this in this agreement, that they're sincere, that they are going beyond just the what's going across the border?

You know, Senator, I do. I think they were quick to respond when the president first said we've got to secure this border, I mean shut it down and we need to address this fentanyl trade. I think they came to the table immediately not just with proposals but with real actions. And then as the president's talked about trade deficits, you know, about more jobs in the U.S. and in more industries here, they've brought solutions to the table. It seems to me they're eager to try to address the president's priorities here. President Sheinbaum has developed a good working relationship with the president, and I feel this is they are being good partners and good faith partners in this review.

Great. You know, so I think going on there is a deficit, a significant deficit, so how can we address that? I think two opportunities are ethanol and dairy. I think a big challenge we have is rail right now that that we've pretty well have maxed out the current rail system. We need to address that, they need to address that. But Mr. Vander Schaaf, would you just talk about the opportunities for dairy, more exports specifically to Mexico and dairy?

Yeah, I think that with our agreement currently in place, Mexico's our greatest trading partner that we could have. I think that we could only expand on that. We have new production coming online domestically with new processors and plants in the Pacific Northwest, we just built a plant at Darigold, and we expect to grow our business with Mexico. As I've mentioned before, we are worried about the common name issue and the monopolizing of those names, and so we would like that addressed, but Mexico's a wide vast canvas for us to continue to grow. We want to keep this agreement.

Yeah, you know some of the great things about milk is it has so many great ingredients in it, not to mention the good fat good fats that help brain development, the protein in it which helps decrease appetite. So we think there's a huge opportunity for dairy, we think there's a huge even a bigger opportunity for ethanol going into that state as well. I guess my my time is ran out. Does anybody have any any insight on the ethanol part of this? One they wanted to add? Okay. Thank you so much, Chairman.

Thank you. Senator Grassley.

Congressman Brady, you and I worked together on stuff like this for a long time and worked together on the USMCA about six eight six years ago. It seems to me we had great congressional input at that time. It made the USMCA stronger, fairer, and more stable than it could ever otherwise be. So I'd like to have you explain the practical importance of congressional consultation in trade negotiations.

So, Senator, first thank you for your key role in developing this agreement, improving this agreement, working across the aisle and with the White House on it, and it's proven to be extremely important to the U.S. I think the key here is that, you know, we almost have a battle around the world for global superpowers and others looking to challenge America's economic leadership. This this renegotiation couldn't have come at a better time for America because by preserving those those zero tariffs and low trade barriers, not perfect but very low, creating the exemption against other tariff levies and then the three countries' integration has really positioned us not just to grow economically, but we are in such better position to compete and win against the Chinas of the world going forward. And those elements I think are critical, Senator, to be kept. But I think the greatest benefit for you and me has been the growth in in sales to Mexico and Canada, especially in the ag area. It has been just a huge win for our industry there. I think that's up by more than than 50 percent and growing, it's just crucial to jobs. But it's also the agreement has caused a surge of investment from Mexico and Canada into the U.S. And where are they investing? In American manufacturing across the country. That's up I think 42 percent. Their investment in technology production in the U.S. has more than doubled. They are making investments in agriculture and the supply chain as well. And so in some ways I don't think that was anticipated that would see more jobs coming our direction as a result of the integration and low tariffs. So it has really worked out from a made in America sales to new investment for American jobs in almost every industry. And then going forward, there's no question the agreement has put us in a better position to compete and win against our foreign competitors like China.

Thank you. And also to you, in your testimony you talked about how the USMCA has strengthened the United States and our supply chains against unfair competition, particularly from China. Could you please explain some of the chapters how have protected the United States from unfair practices and the benefits that could result from repeating those chapters in the new agreement?

Yeah, I think what we saw in in the President Trump's negotiation of the agreement was a major effort to improve the quality of the agreement and make sure industries in America that had, you know, blossomed since the original NAFTA was now part of the agreement. So we saw chapters in digital trade, in financial services, much better I think reforms and access for small business. But it created I think it laid the foundation for companies that felt like they needed to be around the world to compete and win and were far too reliant on China. It created exactly the right incentives along with, by the way, a new tax code that also made us much more competitive and created incentives to bring back manufacturing and research and intellectual property to the U.S. The trade agreement at the time along with the new more modern tax code has really driven this growth and positioned it. I think going forward this is going to be one of the most important benefits of this agreement is to be able to compete and win against our foreign competitors like China.

Mr. Vander Schaaf, if I got time to get this question in. If the United States were to get fair treatment for our dairy access under the trade rate quotas, would there be additional issues you'd like to see addressed?

Well, in in relation to that, on top of that, I guess we still have issues with the protein. They are producing a lot of low-cost protein that they are undercutting our market with. And so we would like that addressed as well. It's it's been an issue for six years and it still has not been resolved to answer your question, Senator.

Okay. Thank you.

Thank you. Senator Cortez Masto.

Thank you. Thank you to the panelists. Congressman Brady, I'd like to start with you and talk a little a little bit about tourism. As you know, tourism is is one of America's top exports, accounting for over $200 billion in value per year. Unfortunately, what we are seeing in Nevada and across the country because of some of the rhetoric and bad policies of this administration, the number of international visitors who traveled to the U.S. in 2025 fell by 4.2 percent. That's the first decline since COVID-19. We've seen a particularly sharp decline in visitors coming from Canada because of the trade wars as well as the rhetoric coming out of this administration. I recently introduced with Senator Moran the USMCA Travel and Tourism Resiliency Act to add a travel working group to the agreement to break down barriers to travel and improve coordination on travel policies in North America. What we are asking is that the trade representative as part of the looking at the USMCA consider a working group that focuses on tourism and travel as well to with these two countries and how important it is for the United States. Do you think that this review represents an opportunity to reset and strengthen ties with Canada and Mexico and support U.S. services exports like tourism?

Senator, I would certainly hope so. International tourism is a big driver in so many of our communities, certainly in where I live in in Texas, but where I grew up in the Black Hills of South Dakota international tourism from around the world including from Canada was a big part of our economy along with the military and agriculture. And so yeah, I I would hope that those types of discussions, you know, initiated by Congress through your constitutional authority in this review, I think that's an important conversation and opportunity hopefully to gain back those visitors, you know, and to grow from there. We are a great place to visit as you know. This is really important to our economy in states where we rely on property taxes, those visitors' taxes in restaurants and all that really help offset some of that as well. So it's it's a great part of our economy. I hope we can can continue to grow it.

Yeah, and I I would appreciate because of your work and past work with the USMCA, thank you so much and your knowledge. I know Senator Moran and I would welcome any input that you have with respect to creating this working group. It's going to be something new as part of the negotiations or renegotiations as we're looking at USMCA, but I think it is also a marker that this trade agreement and other trade agreements should also have something similar, a travel and tourism piece to it because I think many ignore the impacts of travel and tourism to our economy. It's a trillion-dollar industry, it is something important for many of our states, it creates jobs, it helps our small business, and it promotes the United States and how wonderful this country is. So whatever thoughts you have in the future, I would appreciate. So thank you.

Thank you, Senator. Be happy to.

Thank you. Mr. McCarthy, let me ask you. When the when the U.S. agreed to the USMCA, part of the agreement that we memorialized in a letter was that the United States would exclude most vehicles and auto parts from future Section 232 tariffs. The letters were actually signed by President Trump's former trade representative Robert Lighthizer to whom our current trade representative was chief of staff. The current 232 imposed by the administration auto tariffs completely ignores these binding agreements they signed in the first term. I'm curious how have these actions affected business certainty, sourcing decisions, and investment planning?

Well, thank you for the question, Senator. Tariffs are certainly a concern for us as with all manufacturing industries. We have incredibly complex global supply chain. Thank you very much. So we do rely on inputs to produce in the U.S. And that's one of the reasons when I speak with my members, the issue you talk about of certainty, their number one priority as they look to 2026 is USMCA. Having that certainty going forward and having that continuity. We have incredibly long investment cycles. Three years is yesterday and forward is yesterday for us. And the USMCA has enabled us to build those secure local resilient supply chains. It's been an enabler for us to be more competitive globally. So we validate it with our board, our CEO councils, their big answer, their number one priority they tell us is we need that continuation of USMCA. We need that certainty so we can continue the job growth that I talked about, we can continue that investment going forward. Thank you.

Thank you. Thank you, Mr. Chairman.

Thank you. Senator Whitehouse.

First, let me welcome Chairman Brady back to Congress. Sorry you have to hear be here during these days. My questions are primarily for Mr. Gottwald. And I noticed in your testimony let me start in a different place. Just as a matter of trade strategy, are lower environmental standards in one country used for competitive advantage against countries with higher environmental standards?

Absolutely, Senator. We talk about a level playing field for workers. The environment comes into that as well.

And when that when that field isn't level, is that a proper occasion for the country who is disadvantaged to engage in tariff and other trade consequences to try to balance the field?

Absolutely. I think that's key to maintaining fair competition.

In your testimony, you recommended extending the rapid response mechanism to environmental violations. Could you explain your rationale for that?

Yes. We see in in Mexico in particular lower environmental standards that provide a competitive advantage. We also see companies not complying with Mexico's environmental laws, polluting the air or the water. And I think, you know, a facility-specific enforcement approach which has been, you know, successful under our labor chapter in USMCA could be extended to the environment to really target the bad actors and and use pressure to get things fixed.

If a company knows or can predict that a certain trade provision will not be enforced, will they pay much attention to that trade provision?

No, for obvious reasons. Yeah.

So I hope we can get together on trying to move to a rapid response mechanism for environmental violations. It is not just Republican administrations that ignore the environmental components of our trade agreements. Democrat administrations have been equally negligent and culpable, and I think we should fix it. With respect to ISDS, the ability for industries to sue companies, former U.S. Trade Representative Robert Lighthizer described it as the U.S. government providing what he called political risk insurance to multinational corporations who are thinking of moving jobs and investment and manufacturing overseas. Is that in fact an incentive for a company deciding whether or not to move manufacturing investment or jobs overseas to know that it can have that political risk insurance?

Absolutely. I think ISDS, just like you described it, it is a form of political risk insurance. Companies are able to to access it without approval from either government. So I do I do think it is an incentive to to offshore.

So I'd just conclude on that by pointing out some of the really grotesque abuses of the ISDS system. One of the smallest and poorest countries in the world is Togo on the west coast of Africa. Togo had the temerity to advertise on its cigarette packages that cigarette smoking was dangerous. So the tobacco industry with billions of dollars behind it pounded poor little Togo into submission with ISDS lawsuits simply because they had the money and they could and Togo was such a small target that they couldn't weather the battering. It's one thing to go after the United States or the European Union or something like that, but these abuses of the ISDS by industry in truly inappropriate ways, just might before right, is yet another reason to be rid of these damned ISDSs.

Thank you. Senator Daines.

Chairman Crapo, thank you. I just was thinking about that great song America the Beautiful. Talked about God shed his grace on thee in our country. And we woke up this morning, we've got an ocean on one side, an ocean on the other side, we have Canada to the north and Mexico to the south. I think of how many countries in the world would dream to have that geography as we're sitting here looking at the USMCA. Very grateful that that we have our partners to the north and our partners to the south. I also see this partnership through the lens of Montana because this agreement is vital for Montana ag producers, for our manufacturers, for consumers alike. President Trump was correct when he sought to modernize NAFTA in 2017 securing better terms for American farmers, businesses, and fortifying supply chains in the Western Hemisphere. As I'm reminded now if I spend time in Texas, the the largest port in America is Laredo, Texas. The amount of north-south traffic coming across that important port is now the largest port. I've heard quite often about the USMCA created businesses and investment certainty for companies who sought to get out of East Asia and reshore operations. This has been a key driver of innovation and growth both here and nearby. Increased trade with Canada and Mexico has been crucial for Montana, which has grown steadily since USMCA was ratified. In fact, Canada is Montana's most important trading partner. Of course, we share a border with Canada accounting for nearly half of our exports and almost all of our imports. Farmers use fertilizer from Canada to grow malt barley that goes to Mexico, which then comes back as imported beer. Manufacturers use inputs from both countries for value-added industrial processing. Our supply chains are interconnected, and Montana producers are better for it. However, President Trump and Ambassador Greer are right to point out that there's room for improvement for the current agreement. The joint review is an opportunity to address issues like discrimination against Montana electricity exports to Alberta, improper digital trade regulations, and strengthening rules of origin so USMCA benefits only flow to member countries. Chairman Brady, do you think the joint review could be used as an effective tool to strengthen the current agreement and secure better terms for American producers?

Senator, it's good to see you, and the answer is there is no question. And I think this what the review is designed to do. If you remember at the time during USMCA, this 16-year sunset and this six-year review was unique, and at times controversial, but as it was laid out to us members of Congress, this was an opportunity for increased oversight for Congress to work with the administration to to see how the the agreement has worked and where it needs to be improved. And yes, I think these are the types of discussions one our ambassador needs to be bringing to the table, but two is an opportunity to strengthen as you said through improving these provisions.

I will tell you, we've been very impressed with our U.S. Trade Rep Jameson Greer. He is absolutely I travel around the world, he's viewed as an honest broker, a tough negotiator but an honest broker, and he's doing a great job. And I appreciate Ambassador Greer's view that a rubber stamp of the agreement is not the only way to proceed. This is a real chance for us to make it better. There's always room for improvement in any trade agreement. These are some of the most complex agreements we have, our trade agreements. That said, any path forward for USMCA should focus on certainty for American producers, for manufacturers, and consumers. Chairman Brady, one final question. What would potentially 10 years of annual revisitations without an extension mean for American stakeholders?

Yeah, I think that uncertainty couldn't come at a worse time. I think would lower the economic value of that agreement certainly to America. Right now, this agreement is working for the U.S., Mexico, and Canada because it incentivizes long-term investment in North America. That's what's driving the job, certainly driving competitiveness. So the longer this agreement is extended, the more long-term investment we're going to see right here in the U.S. in North America. So, you know, I'm hopeful that that's now the outcome of this. I think that long-term strengthening as you said, preserving the key design of it, but extending it for the long term, that's going to make President Trump's trade agreement even more effective.

Chairman Brady, it's good to see you. We miss you up here, but thanks for your input.

Thank you.

Thank you. Senator Cassidy.

You know, I walked in the back door and I saw a bald head and I said, 'Hey, looks like Kevin Brady.' Turns out it was Kevin Brady, you know what I'm saying? So good to see the back of you.

You're a sweet talker, Senator. Thank you.

Thank you all for being here. Chairman Brady, this review is coming when there's increased awareness of Chinese surveillance of American society using software. Now these cars that could be manufactured or the software which could be brought in cars manufactured in Mexico to the U.S. could be thoroughly equipped with... ...things which would report back to the CCP. This is not against the Chinese people, it is the effort of the CCP. So should we have explicit restrictions on Chinese-manufactured connected vehicle components and autonomous vehicle software?

You know, Senator, this seems to be one of the highest priorities of the President and the Ambassador as well. It reflects the concerns from Congress in this area as well. I predict that the economic security improvements and discussions in this review will be of the highest priority, may well be the most significant improvements in this agreement going forward. And I expect to China, issues of transshipments, of investment screening, of those issues you'd raised, I think is going to be one of the most consequential discussions we have in the review.

Related to that, should the trilateral agreement include agreement upon export controls upon semiconductors and AI chips?

Well, that's certainly I've certainly seen that raised by members of Congress during this review. This is the opportunity to bring that to the table for the Ambassador obviously to have those conversations.

Mr. McCarthy, if we were going to be concerned about the supply side, if you will, of stuff which may come through Mexico into the U.S. but we think it's a threat to our national security, how do you implement those protections?

Well, very good question, Senator. First thing that I hear from our members when we talk about this, because our members develop a lot of the technology that is available here in the U.S. in those areas, is the need for strong enforcement and the importance of again continuing this trilateral agreement so that we have this framework to ensure that strong enforcement. I would also mention, you mentioned about connected vehicles, the administration's already taken some steps on this sensitive technology. So Commerce has been quite aggressive. We work with them to prevent technology from connected vehicles being able to come into the U.S. from those countries. So there's already and we worked hard with them to shape and comply with that. And by the way, that supersedes USMCA, that protection.

I'm just trying to understand though, if I'm building something in Mexico, how do we make sure that that's implemented? As I understand it, when you bring things across the border, you have to have a complete manifest if you're at a land border, but not if you're shipping by sea. And so is that a loophole? Or no, we're going to cover it because somehow we'll inspect plants, manufacturing plants in Mexico and capture the data.

On vehicles, it's largely not because it eventually goes into that supply chain and the vehicles that come in. But you do raise an interesting issue that I would like to emphasize, which is illegal transshipment. This is a very big concern of our members. We've been very welcome of the strong enforcement that has been there on that front. Our members are business people, we're pro-competition, but we must have a level playing field and again been very encouraged with the efforts to strongly enforce our laws on illegal transshipment.

Okay. Mr. Chairman, this isn't you're from Texas. This is an issue affecting Gulf states. Mexican lanchas illegally harvest red snapper from U.S. waters. So last month I led a letter from colleagues to NOAA documenting that seized red snapper volumes rose almost 30 percent last year, and Department of Homeland Security found that Coast Guard only interdicts one in five detected incursions. We're told that it is cartels that are managing this. So another way to do it. Now, NOAA has the ability to restrict related imports but has never used it. I guess maybe this is not for the Chairman but for Mr. Vander Schaaf. Do you agree that tax agreements should prevent illegally harvested products from accessing U.S. markets? And then after that, Chairman Brady, should the 2026 review incorporate anti-IUU fishing cooperation between the U.S. and Mexico? Mr. Vander Schaaf?

Senator Cassidy, thank you for that question. I don't know if I'm prepared to answer that question. I don't have enough information.

Okay.

And Mr. Chairman?

Yeah, Senator, I would agree. Not as familiar with the issue, certainly not to the degree you are. I do think the review is an opportunity to bring these these issues to the Ambassador, the administration in these conversations.

Okay. Thank you all.

Thank you. Senator Warnock.

Thank you very much, Brother Chair. This review is an opportunity to keep American workers and American farmers and businesses competitive while reducing costs for American families. As the ranking member on the subcommittee on trade, I constantly hear from folks across Georgia two big reasons why USMCA matters. Georgia's farmers want to sell their products abroad and compete on a level playing field. And Georgia's businesses want certainty about where their supplies will come from and at what cost. The nonpartisan Tax Foundation estimated that in 2025, President Trump's tariffs already cost the average American family $1,000. If we pull out from USMCA, that price tag will only go up because businesses may have to raise prices amid new tariffs or uncertainty. Congressman Brady, for more than 30 years, businesses have relied on trade agreements between the United States, Mexico, and Canada, and they've invested in the United States as a result. You now work closely with businesses that rely on USMCA. How has uncertainty around the future of USMCA affected their investment decisions?

Well, Senator, first thanks for your leadership role on the trade subcommittee. It is one I held as well over in the other chamber, so thank you for that.

Welcome to this side.

There's no question certainty matters in these trade agreements. And if you saw the 1,500-plus comments that USTR received about USMCA, certainty, I think, was probably the highest point, the most frequent point made by agriculture, by manufacturing, by technology in Georgia, Texas, and around the country. I think the review gives us an opportunity. As the President, he understands the importance of this agreement. It's his. And it has succeeded in a big way, but there are room for improvements. He wants the strongest terms possible going forward. The review is an opportunity, in my opinion, to reset that certainty because it has driven investment into the United States from Mexico and Canada, integrated supply chains and innovation and manufacturing, advanced manufacturing all across the board. It is really, I think, one of the strengths of the agreement. I think it'll be important as the review concludes, we hope successfully, that that certainty, especially for long-term investment to allow us to compete and win against China, for example, I think that will be one of the strengths coming out of this.

Yeah, there's no question that USMCA is not perfect and the review gives us a chance to make it stronger. But I worry greatly about this uncertainty. Farming, for example, is a tough business. I spend a lot of time with farmers all across Georgia, and there's so much about that business that's unpredictable. And so this additional uncertainty could be very problematic for farmers, for small businesses, for suppliers. According to the Business Roundtable, 450,000 jobs, 450,000 jobs in Georgia are directly tied to trade with Canada and Mexico. If the United States were to unilaterally withdraw from USMCA, how do you think that would affect investment in the United States? Do you think it would go up or go down?

Well, first, Georgia is like Texas. If you put our U.S.-Mexico-Canada USMCA jobs together in our state, it would be our single largest employer. It is crucial to our states.

So jobs would go down. We'd have fewer jobs.

Look, I don't think there's any question. Fewer jobs, certainly fewer investment, slower economic growth, and we'd be, I think, put at a disadvantage in our competition against China.

Right. So this is deeply concerning. It's concerning that the administration has made, in my view, undisciplined statements about just withdrawing. We're in the midst of this review, and I hope that we can make USMCA stronger, stronger for Georgia's farmers, our businesses, and our workers. And I look forward to working with the committee and with USTR to ensure that USMCA is strengthened and that it continues to benefit Georgians. Thank you so very much for your service.

Thanks, Senator.

Thank you. Senator Welch.

Thank you very much. Welcome to our witnesses. And Mr. Brady, I thought we were going to win a few baseball games after you left. They didn't have your bat any longer, but Democrats are struggling. Maybe.

It's good to see you, Senator.

You know, there's consensus here about the incredible benefit of USMCA. And I take it that one of the extraordinary benefits is the certainty that businesses need in order to be able to sell back and forth across borders. Does each of you agree with that? [Witnesses nod.] And that included on what what the expenses would be. Now, so we're all in agreement that certainty is absolutely essential to commerce. If there are tariffs that are imposed on the basis of a person, the executive, deciding to impose a tariff for whatever reason, and then those tariffs are changed without any forewarning, up or down, Mr. Brady, does that make it harder to do business?

Certainly drives investment, short and long term. It's really key to our growth and our competitiveness. And so in this review and in the final product, that certainty really matters.

No, it really does. You know, I've had a lot of roundtables. Vermont is very close to Canada, both emotionally and in business, and we also do a fair amount of business with Mexico. But the roundtables I've had, our businesses are saying they just can't deal with the uncertainty. The tariff itself, whichever it is, adds to expense, but then when that changes day to day or week to week or month to month, they just can't plan. I mean, are my businesses any different than businesses in Texas or Idaho or any place that you can imagine? Mr. Brady?

No, I don't think so. I think one of the the secret sauce in USMCA is that we have low to zero tariffs, that we are exempted from these other tariff levies.

Right.

We don't have the tariffs, we have certainty. Has really in the integration has driven growth, no question.

So my plea here, Mr. Chairman, is these arbitrary tariffs that an executive is imposing are really causing havoc in Vermont and what I understand from everybody here is that makes it a tougher business no matter where you're from. So another reason why we saw the House vote against the executive's passing tariffs and we had a resolution here in the Senate where that is objected to as well. Mr. Vander Schaaf, one of the things that it's really tough in farm country right now, you know, I know a lot of the markets for our Midwest farmers, your Idaho I gather, have been compromised as a result of reactions by China to some of our trade policies. But one of the expenses is the cost of equipment and the cost to repair equipment. In my experience with farmers is you guys can fix anything. And you're cheap, right? Like a Vermonter. And if you can fix it and not pay a lot of money, you'd prefer to do that. That's certainly what my farmers tell me. I've got legislation in that would give a farmer the right to repair equipment that the farmer buys. And with technology now, it's like you can't fix a headlight without getting a software program and you have to wait till somebody, and it could be days before somebody comes out. Do you have any point of view about legislation that would enable you legally as a farmer to fix your own equipment?

Well, first, Senator, I would like to thank you for the question and I would also like to thank you first and foremost for your work on the Whole Milk for Healthy Kids Act that you co-sponsored with Senator Marshall. I didn't have the opportunity to thank him, but I will thank you. That's a champion move for dairy and a champion move for America's kids. So thanks.

That's nice of you to say, and Senator Marshall did a great job on it.

Yeah. And then you asked me about repairing. It's ironic you ask me, I actually went to school to be a diesel mechanic starting out. So yeah, farmers and dairymen are frugal by nature. We have to be to make ends meet. And so when it comes to repairing our own equipment, it's imperative that we have the ability to do so. As technology has improved and equipment has, you know, become more technological, it has become more difficult to repair our equipment as we buy it. These newer pieces have more and more emissions and more and more computers on them. It has been disappointing that, you know, the manufacturers have taken some of their information and made it proprietary and made it impossible for us to fix our stuff.

Well, that certainly makes sense to me. I just know how much pressure you guys are under and if you can fix and those things, that equipment you're buying, it can be a quarter million bucks, right?

Or more.

Yeah. All right. Thank you very much.

Thank you. Senator Cantwell.

Thank you. Thank you, Mr. Chairman. Thanks to the witnesses. Thank you for holding this important hearing. I think the three of us represent a view of the world that is very much about trade. And while we appreciate the U.S. market and selling products into the U.S. market, we care a lot about selling products internationally and making sure that we have the opportunities to compete in what is an ever-growing middle class around the world. So I wanted to say I appreciate Mr. Brady, Congressman Brady, your comments to Senator Cornyn that we have the constitutional authority over trade. Thank you. Thank you for reminding us of all of that, and that's the big challenge Senator Grassley and I are saying we should assert ourselves in this issue. But on this hearing, USMCA, we think it was a very important agreement. Many colleagues on my side of the aisle who don't usually support trade agreements supported the trade agreements because it was also about capacity building. Capacity building is like getting a trading partner that follows the rules. And, you know, the committee here has done a lot of work over the years, follow these rules and creates an even better trading partner. And so there's still work to be done on that. But I think it's a signature agreement. And now I'm worried that President Trump is doing things to undermine that, like 100 percent tariffs on Canadian goods, threatening to block the opening of the Detroit Windsor Bridge, imposing tariffs on steel, aluminum, and automobiles, threatening a 50 percent tariff on Canadian-made aircraft, and it goes on and on. So Canada for us in the state of Washington is our number two export market, Mexico is our number five market. And I look at this and say we're trying to kind of reposition, obviously we want a greater, stronger relationship with India between the United States and India, but we also want right here our closest neighbor to be a stronger competitor to some of the things that China is doing. So do you think that this rhetoric is undermining our ability to get a signature achievement? If you consider USMCA a signature achievement, do you consider that rhetoric a threat to that?

You know, I think the President's a tough negotiator. He's tough in his rhetoric as well. He is all in for America and he wants to get the best possible deal for the U.S. For USMCA, he starts in a much different position in the standpoint his agreement has delivered on jobs and growth, competitiveness in a serious way for us. And now today, as we've talked about, Canada, Mexico are America's biggest customers, investors, and suppliers. That is unique partnership. Certainly there's areas for growth here and improvement in the agreement as well. But he's a businessman. I think he understands how this partnership, his partnership in this agreement has positioned America from small business to agriculture to the advanced technology to be able to not just grow but to compete and win against China in the future. So I do believe he sees the value of this agreement. His style has always been aggressive and tough in these agreements, but it shouldn't it shouldn't interfere with these three countries strengthening this, preserving it, and extending it.

I, you know, I could comment on his that rhetoric, but it's the strategy I'm disagreeing with. I am disagreeing with the strategy. You know, we're the U.S. is 30 percent of global trade, that means that 70 percent of it is outside the United States, so that means you have to win those battles. The difference between the last 20 years is everybody's moving a heck of a lot faster. And so the point is, Mr. Navarro this morning in the press saying, quote, "the leverage NAFTA and USMCA to get into our markets in ways essentially is tariff avoidance at best." Well, wait, I thought he was actually part of this last time. So I can't tell what he's calling on it. So like we're getting into arguments over here with the people that could help us be most leveraged in going after, you know, I'm not sure why we aren't doing a bigger Americas agreement. Why aren't we, if we really want to counter the Chinese, why aren't we passing a United States-South America free trade agreement? All those trade agreements that we did in the Bush administration paid dividends to us now. I think they're like collectively the fifth largest trading partner with the U.S. because we grew that market. But Mr. Gottwald, isn't there work to be done on USMCA? So like aren't we missing the boat by sitting here arguing with each other instead of resolving the capacity building issues?

There's there's a lot of work to do. I think a lot of enforcement challenges have been raised on labor, on environment, you know, across the board. So I think it's a delicate dance here in this this joint review. There's leverage here. We need Congress and administration to lean on Mexico and Canada to to fix the issues and, you know, at the same time, you know, preserve the the certainty that everybody here is talking about.

Thank you. Thank you, Mr. Chairman.

Thank you. Senator Young.

I thank our witnesses for being here today. You know, one of the reasons President Trump was elected, I believe, and this administration given its charge for a focused trade policy was because of the perception shared by the President that China has been ripping off the American people, stealing intellectual property, forcing technology transfer, flooding our market with below-cost goods, and many other affronts to long-standing trade rules that the Chinese have agreed to. And seems to me, I articulate it almost every time given an opportunity, that the best way to deal with that is to unify our friends and allies who mostly play by the rules as it relates to the international trade environment and then collectively bring our leverage to bear vis-a-vis China. It's not to suggest we can't optimize existing trade relations along the way. I don't know that we've followed that that meta-strategy in over the last 12-plus months to be candid. I share that with the administration at every turn as well. But with that predicate laid, I want to acknowledge the handiwork of President Trump as it relates to USMCA. It's a signature achievement, a more durable version of NAFTA. It accomplished what he aimed to, bringing production closer to home to places like Indiana, and it has secured better terms for workers. It made the agreement more sustainable. So I want to commend Trump 1.0 on that and Trump 2.0 as Ambassador Greer in particular works hard to make sure that we strengthen that agreement and as he and others focus on modernizing our critical minerals approach. I commend Ambassador Greer in particular for launching the U.S.-Mexico Action Plan. For years I've pushed for single-sector deals with teeth, they're codified and binding and binding trade agreements. So sanctioned by Congress, and my hope is we can take his his good work on the Action Plan and run it through Congress and get bipartisan agreement so that it's clear to investors and all stakeholders where we're going to source our critical minerals from to run a modern economy in coming years. Mr. McCarthy, as you know, we in the state of Indiana have more than 80,000 Hoosier manufacturing jobs tied to the vehicle parts industry. What must the USMCA review deliver on critical minerals to keep North American vehicle production stable and competitive?

Well, thank you very much for that question, Senator Young, and thank you again, as you talked about, over 87,000 jobs in Indiana in the supplier sector and we appreciate your support for that industry. Yes, when I speak with our member executives, the potential to leverage this framework to ensure that we have that we address this critical issue around critical materials is one of the things that makes them the most excited about the continuation and the strengthening of USMCA. And we've heard certainly some very creative ideas from the administration, from Ambassador Greer, from Congress, to take steps to leverage this region so we have those secure supply chains. And let me tell you, we've had just an incredible experience as an industry in terms of supply chain bullwhips over the last decade. We've had the semiconductor issue, for example, so we saw that simply not having one part could shut down all of our industry. And we are reliant on critical inputs and materials. And when I speak with our member executives, their greatest strategic priority, one of them over the next decade, is having these resilient, secure supply chains. And again, these developments and ideas I think the supplier community sees as very positive and they're very we're very excited about the potential for this framework to strengthen our position on this and again protect U.S. manufacturing.

Well, there's always a lot more I'd like to ask. I'll just say, Mr. McCarthy, you mentioned semiconductors. In the state of Indiana during the global pandemic, when we still had some market absolutists lamenting that government intended to take action to incentivize more reshoring of semiconductor production, we had auto workers in Indiana who couldn't go to work because of the sourcing challenges getting semiconductors. So you can't run a modern economy without these semiconductors and I'm glad the Trump administration has boldly taken the handiwork of the CHIPS and Science Act and is implementing it with fidelity. Thank you.

Thank you. Senator Warren.

Thank you, Mr. Chairman. So President Trump campaigned for office on a promise to, quote, "lower costs on day one." Those those were his words. And now here we are, a year later, cost of groceries is up, the cost of utilities is up, the cost to build a home is up, healthcare premiums are skyrocketing. Trump also promised to create, quote, "millions and millions" of new manufacturing jobs. And he also promised that his tariffs would bring factories, quote, "roaring back." So here we are, a year later, and we've lost manufacturing jobs. And look, I believe in tariffs as a tool. But Trump's reckless across-the-board tariffs aren't aimed at building up strategic sectors. And to the extent they've created leverage with our trading partners, he's frittered it away doing favors for giant multinational corporations, not helping out American workers. So today we're talking about how the U.S. should approach renegotiation of the U.S.-Mexico-Canada Agreement, the successor to NAFTA. But based on the last year, I am worried that the administration will not use U.S. leverage to negotiate on behalf of American workers. So Mr. Gottwald, you are a trade expert with the AFL-CIO. Are Trump's across-the-board tariffs bringing back manufacturing jobs to the U.S.?

Thank you for the question, Senator. The short answer is no. These the tariffs that he imposed in April, these Liberation Day across-the-board tariffs, we haven't seen the reshoring of manufacturing jobs due to those. And the latest data year-over-year, we've lost 70,000 manufacturing jobs.

So we've lost 70,000 manufacturing jobs over the last year of Trump's presidency. You know, I have to say, I wish it were surprising, but it's not when you see how Trump is using tariffs as leverage in talks with trading partners. And here's an example. Trump hiked tariffs on European steel. Okay, I get that. Allegedly, it was going to boost U.S. steel manufacturing. But then his administration said, oh, they would roll back those steel tariffs if the EU weakened its laws regulating big tech. Now, mind you, the European laws are common-sense regulations, they're about consumer protection and privacy and breaking up monopolies. So Mr. Gottwald, when Trump said he'd be willing to reduce tariffs on steel imports if the EU repealed regulations on big tech, did that help American workers? [Witness shakes head.] No. And that's just one example. So again and again, Trump has slapped on tariffs, hiking prices that Americans pay, and then turned around and turned some of them off because some billionaire CEO called or made a donation and wanted some tariff relief. And now the USMCA is scheduled to expire in July, meaning we have real leverage. If the U.S. is going to sign back on, we need to tighten the rules so American workers aren't competing with workers in countries that treat their workers like dirt and trash the environment as well. One way to do that would be to strengthen USMCA's rapid response enforcement mechanism that lets us put tariffs on specific facilities when they violate collective bargaining laws. Mr. Gottwald, how could the U.S. use our leverage to improve this tool and actually have... ...help workers.

The rapid response mechanism has been a incredible advance in labor enforcement in trade agreements. It's not perfect, and we could make it better. Here's some ideas. One, we could not just address currently it's focused on freedom of association and collective bargaining, two very important fundamental worker rights, but we could expand that to other worker rights. Think about occupational safety and health, the right to be free from discrimination, other things that affect the competitive balance. So we could broaden the scope of rights affected. The other thing we can do is make sure the mechanism is delivering on time. The rapid part of it at times we've seen when cases go to arbitration under the mechanism, they've dragged on a little too long. So we'd like to explore ways to keep it rapid.

I appreciate that. You know, look, right now Big Tech is paying millions to lobby for more giveaways in the USMCA, including provisions that can make it harder for the U.S. government to be able to protect American citizens' misuse of data. Instead of going to bat for these billionaire companies, Donald Trump should be using our leverage in these trade negotiations to improve conditions for American workers. Thank you, Mr. Chairman.

Thank you, Senator Warren. And that concludes the witness questioning for the day. I want to again thank our witnesses for appearing before us today. As you can see from the questions and the discussion that's happened here, there's intense focus by the members of this committee on both sides of the aisle on making sure that we get this done right. Senator Wyden, do you want to make any final comments?

Yes, just very very briefly. I want to come full circle to where we started. Once again, this is all about enforcement. And Mr. Gottwald just brought it home again with respect to rapid response. I was pleased to be able to work with Senator Brown on that. I think the areas you're talking about are well suited for an expansion. But the bottom line is we've been talking about farmers, we've been talking about small business, we've been talking about autos. It comes back on every one of those causes to enforcing the laws. And if you don't enforce the laws, everything else, folks, just goes by the boards. So I want it understood that we talked about it, I guess, around three hours ago, but it's just as important now as it was three hours ago. And I want everybody to understand I will be talking, as I said, from the rooftops here because we cannot make the progress we want for the high-skill, high-wage jobs we want for our country unless we enforce our trade laws. Thank you.

Well, thank you, Senator Wyden, and I agree on that. I've said to every president I've served with that we need to have bilateral trade negotiations with strong enforcement provisions in them. I also see that a senator has just shown up. You got in right under the wire, Senator Luján. We'll go to you, and there will be one more round of five minutes of questioning, and then we will wrap up. Thank you. Senator Luján.

I appreciate that, Chairman. Sorry for my tardiness here. We were in a commerce hearing. There were some airspace that the FAA shut down in southern New Mexico and El Paso yesterday, and no one can tell us really why. So that's the hearing that I was just coming from trying to get some answers. So thank you, Mr. Chairman. Chairman Brady, good to see you, sir. To all the witnesses, thank you all for being here. Now, I have some concerns about what's been happening over the last many months surrounding how this administration has been engaging with Mexico and with Canada. I think it's appropriate that we're here talking about a trade agreement. I think trade agreements are often done with allies you work with. Chairman Brady, in your testimony, you note that investment in Canada and Mexico has surged 42 percent since USMCA took effect, reaching $870 billion. You write that Canada and Mexico are America's top customers, investors, and suppliers, all in one. Chairman Brady, a question I have here, sir, and no disrespect, are Canada and Mexico our geopolitical and economic rivals?

No, Senator. They are our strongest economic allies.

Yeah. And do you believe that mistreating countries that we work with, whoever it is, as a country, does that help or hurt U.S. businesses and consumers, if you're able to answer that?

You know, I think the larger question is, is it in America's interest to be a reliable trading partner, for example? And the short answer is absolutely it is, especially in a reliably beneficial trading relationship. At the end of the day, that's what President Trump's wants, a better and more beneficial trading relationship throughout the world for the United States. The good news is with USMCA, he has exactly that, and there's room to even grow and improve it further.

I appreciate that, sir. One thing you reminded us all of, Chairman Brady, is you described the USMCA as the gold standard for U.S. trade agreements due to its smart design of zero tariffs, low trade barriers, and its certainty that it provides to integrated North American supply chains. Down in that little area that I was chatting with the chairman about, Chairman Crapo, about where the airspace was closed, Santa Teresa, New Mexico, one of the ports of entry that has benefited very much associated with some of the trade engagements and growth opportunities in that particular space. Chairman Brady, with the work that you did as chairman of the Ways and Means Committee, I had the honor to serve with you in the House. Tariff policy was used in a targeted way often when we were able to engage in whatever that policy was. And look, Democrats and Republicans had difference of opinion, but ultimately during the time that you were there, whether it was as chair or ranking member, you were able to bring agreement and bring people together to find a path forward. Do you have any advice with how we can be better engaging one another, working with one another, trying to find a way to have the kinds of conversations that you led when you were there where there was still a difference of opinion, but you were able to bring people together to have the important conversations and bridge differences to land a trade agreement? Any thoughts there? You don't have to respond to that one if you don't want to.

No, no, no. I think it's a great great question. You and I saw an unprecedented level of bipartisan support for this agreement in all my years. 13 to 15 trade agreements I've worked on through the years have never seen it. It wasn't by accident. The president and Ambassador Lighthizer set out to create bipartisan support. They gave and included provisions on the environment and labor that had been dreamed about for a decade, but they worked with Congress to do that. So there's no question the success of this agreement economically for America is because the president and his team worked with members of Congress on it. The review is another opportunity, and it was sold to Congress as this is the way to have more oversight and input. This is the opportunity to be able to raise ways to improve this agreement. Please preserve that smart design because it is working, and the integration here between the three countries are so important to our future.

I appreciate that, sir. Mr. Chairman, I have other questions I'll submit them into the record as well. I want to respect the time that you gave me there. The last thing that I'll just, one observation, Chairman Brady, that I'm often reminded of when I came here. There were some students visiting my office momentarily before I was in my previous hearing, and they were asking me just general questions about about arithmetic and mathematics. And I've been tempted to buy my colleagues abacuses to remind them how to count. You knew how to count in a time when you need votes from both sides of the aisle, you could bring people together. And so in any wisdom that you have down the way as you're chatting with every one of us, please remind us the power of the lessons we learned in kindergarten or in Head Start when we learned how to add one plus one. And in this place, you have to get to 51 sometimes, you have to get to 60. The numbers are different, but we have to get there, and you were good at that. Chairman Crapo's unfortunately too good at that as well. But just as a reminder, I look forward to chatting with you more. I'll get the other questions to you all. I apologize for not asking direct questions, but Chairman Brady, good to see you, sir.

Thank you, Senator Luján. As Senator Luján said, you should expect that there will be some follow-on questions from senators for the record, and we ask that you respond to them promptly. And with that in mind, I remind my colleagues the deadline for submitting those questions for the record is 5:00 p.m. on Thursday, February 19th. A vote has been called on the Senate floor, and we are all going to run to that vote. And so this Finance Committee stands adjourned. [Gavel sounds.]