Jeanne Shaheen Confronts Howard Lutnick About Devastating Impact Of Steel Tariffs On New Hampshire Small Business

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At today's Senate Appropriations Committee hearing, Sen. Jeanne Shaheen (D-NH) questioned Commerce Secretary Howard Lutnick.

Transcript

00:00In your exchange with Senator Kennedy we're talking about section 232 which is

00:06really supposed to be used to help national security but it is under the

00:10jurisdiction of the Commerce Department as you pointed out with respect to

00:14tariffs. Well last month I visited a New Hampshire company that makes ball

00:18bearings for the aerospace industry and I agree we should be protecting the

00:22aerospace industry in this country. It's our biggest export in New Hampshire

00:27aerospace parts. They were very concerned about the impact of the steel tariffs on

00:35their ability to get ball bearings. They said not only has their cost gone up but

00:40the lead time to get the steel to make the bearings they only have one domestic

00:45supplier while they had suppliers in the Indo-Pacific and in Canada those have

00:53been eliminated under the tariffs. They said that their lead times have gone from

00:5820 weeks to two and a half years because of the tariffs. I think this creates a

01:07real challenge with respect to our national security about a good

01:12percentage of the work they do is with the Department of Defense. It's in the

01:16defense industry. So before expanding these tariffs did the Commerce Department

01:22work with the president to evaluate the impact to our national security supply

01:27chain and have you coordinated with the Defense Department? This is an issue that

01:31I've also raised in the Armed Services Committee with the Department of Defense

01:36because they don't seem to be aware of what the impact is on the defense

01:40industry of these tariffs. Of course. You did consult with the Department of

01:46Defense? Of course. And what was the determination about how you address those

01:50kinds of extended lead times for companies that are producing equipment that's

01:55critical to our national security? It's really a cost issue not a access issue. Well

02:03not according to this company in New Hampshire. It's an access issue for them. Well that's,

02:09that would be illogical since it's just a tariff which is monetary. It's not a

02:15sanction. It's just a monetary one. Well it affects their ability to, to get the

02:21product though, to get the steel that they need. No, no, it changes the price point.

02:26Meaning if you're trying to buy it cheaper, the idea for the administration... Well

02:31they don't think, let me just, I'm not gonna argue with you. I'm just gonna tell you

02:34what this company in New Hampshire has told me and that is that their lead times have

02:39gone from 20 weeks to two and a half years. And at that rate, it's hard for me to understand

02:45how we can continue to support our defense industry when we don't have the ability to

02:50get the supply chain that they need to operate. The big issue is you can't fight a war without

02:55steel and aluminum production in America. You have to be able to make it. If you don't

03:00have the ability to make your own steel and aluminum, you can't fight a war. And that is what

03:06the president's doing. He's trying to make sure that we make sufficient steel and aluminum to protect our defense

03:12Which I certainly support. I'm sure all of us support. Sounds like we exactly agree.

03:16But, but I don't agree on the way it's being done. Because we're not going to have the steel that we

03:22need immediately to provide the supplies that we need immediately. So we need to do a little better

03:29planning before we put in place those kinds of tariffs. But I want to go to another issue.

03:33And I can explain offline how the steel works. But it goes to a spot price. It doesn't change supply.

03:39It just changes price. But we'll go over that offline. Well, let me just say the company that I've been

03:47talking to in New Hampshire understands how it works. And they have a problem. They don't need you to explain it

03:54to them. They know because they've been in business for years. But I want to go to the manufacturing

04:00extension partnership. Because you suggested that this is something that has not kept up with the

04:08technology. In New Hampshire, they're doing additive manufacturing. They're doing AI. They are providing

04:16additional technology to help those companies. And so I just want to register my support with what the

04:23chair, the ranking member and others have said about the importance of this program for every dollar

04:29invested in 2023. It returned to $24.60 in new sales growth and $27.50 in new client investment.

04:40This is a program that makes a difference for companies in New Hampshire. And at a time when we've

04:46seen the third straight month of manufacturing decline in the US, it seems to me that we ought to be

04:50looking at how we can continue to support those industries and support a program that's been

04:56working. So I hope you'll take another look at that. And given the bipartisan support for it,

05:03that you'll decide that this is something that it's worth keeping because it's helping American

05:07companies. Thank you, Mr. Chairman. You do know that my office of the Inspector General cited

05:14the MEP as one of the most participating waste, fraud, and abuse because the leaders of these

05:22things were just charging huge salaries for themselves. And one of these offices had like a

05:2890 percent compensation ratio and others had 60. So the concept is right. But I want you to let our

05:35department fix the waste, fraud, and abuse and let's get back to its core elements, which I think are

05:41fine. So we're not arguing about the core elements, but you need to do it correctly. Well, if I could

05:46just respond, Mr. Chairman, I appreciate that there may be issues and that we should address those and

05:51it would be helpful to have some transparency around that. I can tell you that in New Hampshire,

05:56the head of the MEP program is not making an inordinate salary because we watch that carefully in

06:03New Hampshire. Thank you. Senator Fischer. Thank you, Mr. Chairman. Welcome, Mr. Secretary. Nice to see you.

06:12I appreciate the review that you're doing.

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