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>> let's get started. thank you for being here today and joining us live at the hudson institute. thank you for joining online. it is a pleasure and a special thanks to c-span for being with us today and sharing this discussion with reviewers. -- your viewers. this is a second in the series of conversations being organized by the american maritime

security initiative. it is a joint project between the husband institute -- hudson institute and the navy league of maritime strategy. the group is focused on national and economic challenges as we face dealing with china as a relates to the commercial maritime industry. the shipping is at the intersection of trade and transportation, national security and economic security and the first conversation in the series was with busby. you can find that discussion on the hudson website and the focus today is on shipping and economic security and the sick -- concerned that china has might -- has obtained the power to weaponize control over the international maritime supply chain. most experts would say if that word -- china words again that power and use it -- were to gain

that power and use it, the potential harm could be catastrophic. we are delighted to have with us chairman peter defazio who represented oregon's fourth district and he began his service in 1987 and retired 10 weeks ago at the beginning of the current time --congress. he was chairman of the committee, the largest committee in congress for the last four years. many accomplishments. we don't have the time to say many of them but from personal experience, i appreciated your deep understanding of the maritime industry and many other subjects. thank you for your service in congress and your commitment to doing the job the right way. welcome.

fmr. rep. peter: i appreciated -- appreciate it. michael: how is retirement? fmr. rep. peter: it is a work in progress. michael: we are glad to have you with us. we will get into the conversation and we will get into trade policy. this is a confrontational question. you told the earlier that you oppose every free trade agreement that came for congress in your 36 years. fmr. rep. peter: that included most favored nation treatment for china and china's --can you tell us why? fmr. rep. peter: economics in college and graduate school and to me, the theory of competitive advantage didn't make much sense in the 21st century. most of our trade has been based on that.

secondly, a lot of our trade was colored by coming out of world war ii, for we had the marshall plan. -- where we had the marshall plan. we were the only industrial power in the world and we controlled the seas. we had to make a lot of congestion to other nations to move things but he came to appoint whitney with nafta -- to me with nafta. clinton said 600 jobs in the u.s. and mexico's total tb -- total gdp if they spent any -- every penny on the u.s. compares with new jersey. it was all about going across the border to access cheaper later, lack of -- labor, lack of environmental standards and clinton was having trouble passing it and since environment of standards work in it, they

adopted a nonbinding agreement to get democrats to vote and pass it. in du --eu, they did things different we -- differently. they did. they eu --the eu, it took quite some time to succeed. there is no labor projections -- protections, no one with environmental enforcement and we will enter a borderless agreement with them regarding the production of goods. it was a way to outsource and when china came along, with clinton, we came out of the soviet union collapse. 10 years before. it was a rosy period of, democracy and capitalism, it's descendant -- its descendant.

we will bring china along by allowing them to have permanent mfn status and they will follow the rules. they haven't. before, when we had nfm on a limited basis, we could set the period over which we could renew it and say, within two years, you don't deal with these abuses, we will not renew your status. we made it permanent because u.s. companies who wanted to move to china which had even cheaper later, wanted assurances that their investments will be protected indefinitely so we made it permanent and that was a huge mistake. michael: granting full trade rights to china was a mistake. fmr. rep. peter: indefinitely by going to what we now call normal

trade -- there's a way to deal with that. i would reconsider moving them either back to, and analyzed -- an annualized or -- status or even revoking their pntr. we have imposed tariffs on them and they do not have a huge run of the right here because they manipulate their currency down and a lot of their industries are subsidized. they added tariffs that will come out of moving them from schedule one to schedule two by saying, you don't have that until you clean your act of, it would not be a huge inflationary increase in the u.s. by any counts. michael: the assumptions that you mentioned, you didn't trust china would do what they said,

the assumptions that were offered in selling the china free trade deal where that china -- were that china would democratize, that economic freedom and prosperity would cause the ccp to share power and we assumed that china wouldn't turn on america the way it has and that didn't seem like good assumptions. fmr. rep. peter: no. it was the glow after world war ii, when we allowed discriminatory trade policy to put in place against the u.s.. i mentioned most people don't know about, most of our competitive nations have a value added -- additive attack. they are allowed under the agreement to rebate they entire

value add attack to their -- but in the 1950's, we out people to say you cannot do that with intent -- income tax. income taxes cannot be rebated. we put ourselves at an extraordinary disadvantage. we will lower the corporate tax rate. we are -- created this whole problem by allowing that to happen in the same thing when china exceeded later. we were in the glow of the solution of these -- the soviet union. they will move in the direction of capitalism and democracy. michael: that is causing questioning and -- in many areas in our relationship with a focus on -- but the focus is on shipping and you lead a subcommittee on coast guard and

maritime, which has jurisdiction over the regulation of ocean shipping except as it relates to national security which is an interesting caveat. it seems to me that ocean shipping is critical for national security. in any event, the supply chain crisis of the last several years well squarely within the jurisdiction of your committee. congress, your committee approved in the house and senate class -- past legislation to respond to that. what are your thoughts on the supply chain crisis and that legislation? fmr. rep. peter: it was an immediate crisis. we had 100 ships to get into l.a. long beach. containers went from the -- $2000 to put a thousand dollars containers -- $220,000

containers. --to $20,000 containers. there were many abuses that were being put upon the american industry. we had basically gone through a series of the regulations over time that relate to shipping. let me go back to 1882. secretary -- maybe coleman. it's commercial independence and in time of war, places its very existence at the mercy of the powers which control the ocean. that was 1880 two and in 1920, we adopted the jones act, which i think we need to talk about more. world war ii, up to leading to

world war ii, we had a u.s. maritime commission, built 6000 ships. then, at the end of world war ii, we pulled back and the ships coming off and we sold them from overseas and they went under foreign flags. we were getting subsidies to the u.s. flag so they would have to compete with cheap foreign labor. in the lack of other issues. reagan took away the subsidies in the fleet gets old overseas and finally -- and the fleet gets sold overseas and finally, -- here is the premise of that. this is to achieve a competitive and efficient motion transportation system. a policy that will put greater reliance on the marketplace.

we have done that and we have three conglomerates that control 95% of the u.s./asia trade. the marketplace has created the conglomerates and had a norman it -- inordinate power. one company controlled the truck bed to take the containers of the port. they said you can only use ours. and so, then they had containers sitting on them and they were charging people because their containers were sitting on them. we were focused on the economic crisis and there wasn't a time where we can focus on how we can rebuild american maritime. we wanted to deal with the impacts of inflation and the supply chain. that is how the bill gets shaped. michael: we pointed out in some

of the work and we discussed the fact that, unlike air transportation and telecommunications and other critical network industries, there are no american shipping companies in the 12 -- top 25 globally. there are 85 u.s. flag ships trading internationally out of a global fleet like 50,000. these are the companies and ships that carry just about everything. commodities and manufactured goods and intermediate goods, which is part of everything us. --else. because there are no large american international shipping and few american ships, we have little control over the american maritime supply chain. we are customers in that deal. our consumer economy depends entirely on international ships -- i am pontificating.

excuse me. the shipping equipment of -- the equivalent of uber. there are no american drivers. that this happened much when you are working on that act? michael: -- fmr. rep. peter: no. the jones act is the last effort into maintaining u.s. ship building industry. that has been under constant attack and was under constant attack. there are groups that say, this drives up the cost for american consumers. puerto rico has made a rain on it -- run on it. even though we had a cgo report that says puerto rico is vantaged by having a dental -- dedicated fleet of vessels.

because they need regular service from the u.s., for a whole lot of things. if they didn't have that, they will be at the end of a very long international shipping chain controlled by three conglomerates. and they are small-market. they would not be interested in providing things on a timely basis to puerto rico. there was a recent -- under the biden administration, after the last hurricane. they need diesel. i talked to puerto rico representatives and she said there is no diesel shortage. the administration, being pushed by a small group of members in congress, claiming this was a problem, waived the jones act. for ship, it was in -- for ships

already in transit loaded with crude from the united states. there was a foreign flagship and they were allowed to disperse to talk --puerto rico. the total wages of that ship for the crew is one merchant mariner. there are always pushing. in a mock time in congress, i have been on the defense with people are starting to wake up. it is time to go on the offense and begin to have serious conversations about what is going to happen. when we went to war in the persian gulf, we had to use foreign flagships. we have a ready reserve fleet which is decrepit. rebuild, revitalize, and modernize and we are doing some of that. we have academies -- an academy

a new ship. we can build the ships here and we can do a good job. they are going to be more expensive. you get all of the spillover effects into our economy when you build those things here as opposed to buying them from overseas. you don't get any added ethics. you don't get -- create any jobs in all the things that go into the ships -- and all the things that go into the ships. the jones act was important. the wind industries, there getting massive subsidies -- they are getting massive subsidies. the only insurgent ships are foreign but the main resources are building one and other u.s. manufacturers of other companies would build them if they knew there was going to be on market and they could compete. these are in our territorial waters. they shall fall under the jones

act and i went four years ago to the wind industry when we were doing a bill and i said, let me do this. we will have a five-year window and if it is five years, basically, they contract at five years from this went insurgent --wind insurgent. they initially agreed. the american petroleum institute said you can't do that, because we wavered many years ago and we are doing all of our stuff in the gulf with foreign flags and foreign crews and it is wait cheaper -- wait cheaper. --way cheaper. do we value foreign jobs and economic security are do we chase the cheapest -- or do we chase the cheapest -- michael: i am on board with what you said about domestic shipping trades.

top up the international -- you talk about the international shipping industry in the small americans involved. the bigger concern is maybe what you alluded to in your quote from 8082, --1882, if the country doesn't control an international shipping industry, it is in trouble and if the trouble here, it is not just that we don't control, there is a growing dominance of china and china's involvement through the system and that reflects the stated and best -- objective of president xi jinping going back 10 years ago in one of his first speeches, which is we are going to make china a global powerhouse when it comes to the maritime industry. a full range of industries because any entry that does that, -- country that does that, they grow in every country that

backs away from the maritime industry, they declined. fmr. rep. peter: the ville road initiative -- belt road initiative. some of them are -- some industries of our -- or our allies and we can depend on them to carry our troops. in a time of conflict. the chinese are spotting themselves all around the world, 100 ports. they are getting influence in those countries, which control the foreign flags. it is less and less likely that we are going to easily be able to call on many of these countries at a time of crisis with these foreign flags, and say, we have to move our troops. we need to move our agricultural goods overseas. we can't get shipping. the chinese are being very

deliberate. some of them they are putting in strategic places, right by the suez canal, djibouti, and haifa. they have a contract to run a ports in haifa where a fleet is domiciled. they will move everything in and out of the harbor and we did not get into cranes. michael: i have a few data points. china, state owned shipping company, cosco shipping is going to be one of the top containers in the world. no american in the top 25 and china has glad the mobile -- global order book for shipping instructions compared to less than 1% first -- u.s. shipyards. around 80% of shipping cranes,

are made in china and the pentagon's -- has learned that these cranes can spy on the supply chain. all of this data is being combined with other shipping data and giving the chinese the ability to track about any container cargo shipments anywhere, including u.s. military cargo. you mention beijing having a foothold in 100 ports in many countries and a growing share of marine finance and insurance business is just one of the hooks we relied on to enforce sanctions on russian oil. how should we react to all of this? fmr. rep. peter: i suggested that we may want to -- and there is legislation pending in congress introduced by republicans and democrats to reconsider permanent normal trade relations with china. the question is what do you move

to? do you move back to an condition and time limited approval subject to them changing their behavior, or do you take the bigger step of pulling the whole thing out and saying, they're so much abuse going on here -- there is so much abuse going on here that we will move you to the same scheduled tariffs we had for russia. it is generally up from a average from 3% to an average of 34% except with -- going down and all that, it isn't going to become anywhere near 34%. i mentioned earlier, there was a lot of press about there was a buick made in china. when section 301 was applied, that is 24% tariffs. oh my god, the price is going to go by -- up by $8,000 in the

u.s. the chinese -- the price of the buick went down despite the 24% tariff. it seems like we are going to need a really substantial club to deal with this and we cannot let it go on much longer. at that point, we will be capped. michael: to take you to recent action, the microchip act, the u.s. market share of microchip manufacturing went from 25 -- or whatever and what from, down to talk percent. it is -- we are relying from china and south korea and china -- taiwan on certain chips. we had 10% of the market share. it is thinking that in terms of

the american maritime industry, we have to get better relationships with china and a firmer footing on the trade side of things but in terms of starting to regain footing for the american maritime industry, we are below 1%. is there a path that should be considering that would get us toward a more meaningful market share? fmr. rep. peter:fmr. rep. peter: there is some minimal number of u.s. flag international carriers that we need to protect ourselves. like i say, we built a lot of the bottoms from world war ii, and we gave them a subsidy to deal with the fact that they are competing against this incredibly inexpensive foreign labor. the other things are with convenient so i think we have --

this may be a conversation, armed services and homeland more than the transportation infrastructure committee about what is the minimal merchant fleet we need. let's just assume, what has worked in the past like with the persian war, that we can go to foreign flags and say, we need these ships and they provided them. let's the assumption with the chinese growing influence with many, -- countries with foreign labs, if the conflict is coming, they might influence countries not to cooperate with us. we should make that assumption and talk about, what is our minimum? i started with the ready reserve fleet. that is specifically for the military. we need to increase the supply and we need to update those ships. that's a basic starting point. we have to emphasize the trading, mariners in the

country. we have a big workforce challenge -- michael: we have a big workforce challenge. i have talked about the need -- 80 56 in the national trade and he put the number as 250 as a reasonable number to cover a real estate sealift requirement in light of what you mentioned in terms of the foreign flag, and ships not responding and attrition. these are contested. these will be operating in contested waters and without u.s. total dominance of the airspace. we would lose ships and we need a lot more ships and we need ships for the economic side. fmr. rep. peter: we need to question the basic concept of flights of convenience.

it is a new thing but they don't have too much shipping. . when i was pushing hard on this with cruise lines that are -- are foreign flagged. i said, you are flagged in liberia and liberia happens to be a registered -- the registry is somewhere -- it is turned in with a bunch of x coast guard's like officers for the registry of liberia but it is great because it is cheap and you avoid taxes and the registration fee is low. you are i said so what happens the next time someone hijacks a cruise line on the high seas?

are you going to call the liberian navy? there is none. this is an absurdity. it almost happened in aviation. they started to try to do it in aviation. norwegian air relocated itself in ireland. they were going to fly planes to the u.s., by malaysian pilots. singapore and flight attendants under contract. and said they were going to try to create flags of convenience. luckily they collapsed. during the pandemic. this is a model we do not want to replicate anywhere else. it is failure for us. imagine the civilian reserve and we subsidize the wide-body plane to a certain extent so we can call them to carry our troops

overseas because we don't have enough capacity in the air force to do that. these are all big, red flags being waived. michael: you put it on the aviation industry and the differences. the aviation industry is structured totally different than the maritime industry. airtime industry is willing and able to meet certain safety standards. you are eligible to operate in international trade. rm sure that is true. in aviation it is a very competitive system. but it is also controlled. america gets landing rights in the country, or vice versa, if an american flag airplane gets those rights, not a flag of

convenience airplane, that is not the way the international -- mr. defazio: back to the flags of convenience, i fought, i got involved in scandal in the philippines about 10 or 12 years ago where anybody could buy papers at any level. you want the cap newspapers? here you go. you are a captain now. they were running this marketplace. it finally got clamped down on. does mongolia send out people to inspect their ships and their crew and ensure? we could do a lot more port inspections and a lot more enforcement on this side and say if you're coming in under one of the suspect flags of convenience from a country like liberia that hardly exists, or others, we are going to subject you, we want to see the credentials of these mariners, we want to see the

inspection of these ships. that is euros -- that is something else we can do to fight the flags. michael: you mentioned american airlines. it appears to me when you look at the total of someone getting back to china and the concerns we have around the degree to which they have control over so many segments of the international shipping supply chain from buildings, to crank and structure, to information to operating the ships and crewing them and so on, that is a major concern from our economic security standpoint. if they have the power, they acquire the power to exert control over that supply chain, can we trust that they wouldn't use it to our disadvantage at some point in the future? mr. defazio: over taiwan, for instance. no, we certainly cannot. they say, well, we heard the

chinese because economically they are exports. but that is a country that is very rigidly controlled. michael: and coming out of covid lockdown. mr. defazio: they have facial -- facial recognition, they monitor you. if you cross the street when you're not supposed to, at a certain level you lose rights or your kids lose rights to go to school. the level of control is extraordinary. in the u.s., if certainly all these goods disappeared, there would be havoc. michael: there would be. mr. defazio: i don't believe they wouldn't use that tool as they get more and more dominant. michael: it seems to me it is something that could escalate. they could start at a certain

level imposing economic pain and ration it up depending on how things go. if they completely shut down the system it would be catastrophic for everyone. but as you say, they could absorb their political system. it is going to an for -- it is going to absorb that. hopefully it will never come to that. not just about accepting chinese control -- mr. defazio: my position on conditioning or people say it is going to happen two years from now, three years from now. develop other sources. i had this fight, there was a chinese rail company totally owned by the people's revolutionary army. they were sending in totally subsidized light rail cars and trying to take over the whole

u.s. market. they were going into heavy mail -- heavy rail trying to take over. putting people out of business in short order. i finally was able to get an amendment on a bill to say they could have no further contracts in the united states because it was a state owned company that was not fairly competing. the stock wasn't very good and we had considered -- and we had security concerns about them tracking people. they are very clever. there are two manufacturers. one was bus and one was trained. very powerful members of congress fought. because they had 400 jobs. there could be thousands of jobs making these things. they had 400 jobs picking up the shrinkwrap and doing a little bit of assembly. so i couldn't end their existing

contract. now they are going around, their transit district that they already have are going around saying to other transit districts, we will subcontract with you and you can get this east chinese stuff that is totally subsidized. this is going to be a very difficult struggle. michael: when we talk about the maritime supply chain, supply chain and logistics are brought terms that mean a lot of different things depending on who you are talking to and what the issues are. the supply chain and logistics issues we are talking about are not about a specific type of commodity. microchip -- microchips or refined rocket. it is the transportation system that brings all of this stuff to us. our concern is, is that out of

our control? mr. defazio: what little we are exporting back. during the crisis people were hit really hard. to get back to china, when they were going for mfm, they allowed in a big shipload of wheat. eastern oregon, a big wheat country. they came in, this is a huge new market for us. we have never been able to get in there before. but at the same time i received a translated radio broadcast internally in china by a trade minister saying, don't worry, we are not going to become dependent on the united states for our food supply. after that one ship when in and they got msn, the next year the same ranchers came in to see me and they sat there and said, are you going to say it? and i said, say what?

and they said aren't you going to say i told you so? and i said i am not going to say that. we have got to fix this. they do this in so many ways of saying your wheat is not clean enough for us so you cannot bring it in anymore. this is a real dilemma. michael: i appreciate the conversation. we have got some time for questions. i think it is really important conversation and discussion. i don't think there are easy answers. this has been going on for such a long time. turning the corner and getting the ship pointed in the right direction it's going to take a lot of work and a lot of patients. i really appreciate your leadership on this through the years. anything you would like to add it. i would love to take some questions.

let me open it up to questions from the audience. in the back. >> hi, i was hoping you could speak about cargo preference. there has been an effort i our government and within congress to use convenience for government taxpayer cargo. with these other food agencies. could you talk a little about that and what you think would get these agencies and some folks in congress to change their tune on cargo preference? mr. defazio: we had to fight back because the nongovernmental organizations get involved and say, wait a minute, week supply more at a lower price if we use these foreign flagships. that has been an ongoing off and on again struggle over the last decade or so. cargo preference definitely needs to be tightened up.

michael: more questions? [indiscernible] michael: he is going to give you the microphone. >> you said we have been very dependent on china. we can go in any store within a mile and find 100 different things made in china. as consumers we are very dependent on these things now. not trying to be confrontational, how do you balance that? there are national security concerns. there are also concerns to consumers. so which do we take more seriously? mr. defazio: can we mitigate it and balance it and i think the

national security has to ultimately trump. but you have to think about how we are going to get there. because of the dependence. people are beginning to reassure under policies adopted by biden and the chip stack is going to -- the chips act. the meltdown during covid, they say this could happen again. so they are reassuring to some extent. we also have to be looking at other areas of the world who are not possible to the united states as potential suppliers in the future. that is going to take time. it is going to take time here to get back up chip manufacturing in other areas. i had despite numerous times over the percent of transit

vehicles that have to be manufactured in the u.s., every time we would raise it, all the transit people would say, oh my god we were told there would be no more. we have managed to overcome it and find substitutes. we didn't do it, say today it is going up to 75%. it was over three years, five years, we are going to move up to 75%. as you move up, people say, ok we can supply that, we can supply this, we can supply that. right now they don't see any potential for markets, they are not going to make the investment. look what happened with protective equipment. that was a wake-up call. it turned out during the pandemic i found out this guy in texas, i read an article in the wall street journal, bought an old implant, he had six lines,

he could make a mask, n95. only one was running. i went to homeland security and said, give this guy a contract. you have got to give this guy a contract that says we will buy this much over this period of time and if we don't use it all we are going to put it in strategic stockpile because we might do it again. but you are guaranteeing this purchase. they finally did a contract with him for texas. for dental offices. but not as big. that is a part of the key. assuring through, some people don't want to talk about it, assuring through industrial policy that these markets are going to be there. michael: very good question. i appreciate your response. the other thing i would add, look at some of the things we are talking about on the maritime side. the market share we are seeing,

container construction, 96% in china, 86%, we would not tolerate in this country that kind of concentration. and yet because they are outside the united states and different corporate entities, we seem to be paralyzed to do anything about that. if everybody played by the same rules, there might not be the kinds of issues we are dealing with. mr. defazio: state owned enterprises, we can and should be terrifying. i wonder if we could do that under existing laws. regularly stated enterprise. republic government, rub -- government, running those countries. they take it over and they can jack the price up.

that is ultimately going to happen with some of these things. it is the bargain now but what happens when they have got the total market and you are totally dependent on it? michael: question back there. >> thank you for this wonderful conversation. i am interested to learn more about the competition between the u.s. and china. america and africa, can you talk more on that? michael: the work that china is doing in other countries like south america? appropriating the deal between iran and saudi arabia? mr. defazio: china is doing a lot. building infrastructure around the world. they bring in most of the workers.

these things are not free. another have deteriorated. not worked out. but these countries are then on the hook to china for the loans they took from the chinese. this is a pretty regular occurrence. it has happened numerous times in africa and elsewhere where the products -- where the projects have ultimately failed but they still have to pay the bill. they are using for the most part oriented towards economics. but as they control more and more ports, the only one that overtly used regularly by the chinese navy. they are getting a foothold in ports all around the world where their ultimate plan is we are going to be able to use those in times of crisis and we can then

spread our naval seapower around the world. the u.s. has pulled back a lot on those sorts of things overseas. we have left the gap in the chinese -- the gap and the chinese are pursuing those things. michael: questions? >> hi, thanks for the discussion. i wanted to get your thoughts on the impact of friend shoring and big u.s. manufacturers. apple is a big example. a recent example moving production out of china into other countries. how much do you think that will hurt china's shipping dominance? or an effect on the way they can

dominate a lot of their basic manufacturing moves out? mr. defazio: the locale, to some extent, 95% of the asian trade is controlled by three conglomerates. one of those is totally dominated by the chinese. the other, partially, one, not so much. it depends upon basically the location. as they grow more and more dominant shipping, where are you going to go, except maybe europe? a lot of what you are talking about, the electronics, that comes by air. they are not putting that stuff on containers on ships. that hasn't been much of a

problem except of course during covid when flights were grounded and all that. that is something at this point and time they cannot dominate. a lot of the consumer good you're talking about, in that case it will work. when you get by bigger and heavier items that go by sea, it gets more difficult. beginning to compete with the chinese shift assured to crane, it is huge. they have to go on special ships. the chinese have built those special ships. michael: we have a little bit of experience with that. that is a proposal ports authorities at this point

starting to reassure crate construction. i am not sure whether reassuring or near shoring or friend shoring -- mr. defazio: the more it happens, the threat it continues to happen, the more likely china will play by the rules more. there is less vulnerability to our supply chains when that happens. we have talked about central america based on my experience. the benefit of going there, you get lower labor rate. on shoring is best of all if they can make that work. ultimately it is about diversifying the supply chain sources. that is a really important part of all this. it doesn't really address. the part that gets overlooked,

maritime logistics supplies the shipping part of it. the shipping is controlled, is overly controlled by china. we are invulnerable to them in my opinion. and we need to try and mitigate that vulnerability. the gentleman in the middle there. and that guy would be next. >> i want both of your thoughts on i rep. it is building its supply chain resilience, especially for southeast asia. you mentioned about the philippines and multiple southeast asian companies -- multiple southeast asian countries. on the u.s. side there are no tariffs. there are a lot of market potentials, they want to get into the u.s. market. there is not much discussion on tariffs.

what are the alternatives american can alter -- and offer for southeast asia? we do not have fda's, directly the u.s. does not have them. mr. defazio: you are a little bit be on my area of expertise on that. is tylan in the wcco -- the thailand under wcco? our average is lower than any other trading nation in the world under the schedule we have submitted to the wto. thailand is already getting the

same access as china. that is probably a problem. thailand does not have large status owning enterprise. so you are still at a disadvantage unfortunately. even though you are getting the same tariff. that is why i am arguing we should move china off and begin the condition to put them on schedule too. then that would be a great advantage to countries like thailand when suddenly the tariff goes from three point 4% to almost 24%.

then your goods would be, way more competitive than the chinese goods. >> i am interested in cranes and other enabling aspects of port management and what particularly scares you and what you think we have to do that goes back to the resilience question particularly as we look at national security implications. mr. defazio: i talked a little bit about they control the port. they know the movement of the u.s. ships in and out is. the same thing with cranes. they can be tapping into what is

going on on what ship and where is it going as they are loading the ship. if we got into more of a time of conflict, unfortunately they would have the intelligence right from that spot. we can take over the cameras, we can do this, we can do that. that is not the solution. just so we can get a cheaper crane. it is a bigger issue than that. we used to make beautiful cranes. we could make them again and not have to worry about what sort of software is in them and where it is transmitting the data opposed to the ship and what they are going to do with it. it doesn't necessarily have to be conflict. just give them an unfair competitive advantage. you are leading the ship to go

there. ok then, we figure out a way we might get that market. michael: just to build on that, the owner of the chinese crane maker was quoted five years ago saying, we sell systems. what is valuable is not picking the box of the ship and putting it on the dock. the information you can derive from all of that, we can slice and dice that and sell that back to you and others just like you have done throughout the consumer economy today. that information gets sliced and diced and sold. the information is really powerful in the consumer piece time setting. in some respect that is competition.

but it is also a real concern in the context of a global competitor that doesn't have our best interest in mind whether it is piece time or in war there is real concerns about that sort of thing. front row. >> how important do you think sustainable fuels are for the ships? the u.s. has a narrative, u.s., that u.s. companies sustainable fuel. companies like interlake, crowley, are all on the cutting edge of greener fuels which is something the chinese companies and their shipping companies are resistant to.

with all these other areas at a disadvantage, how important is it we push the sustainable fuel side of things. incredibly important. everybody is talking about got to be a solution particularly in shipping. potentially in aviation. the question is how do you obtain? there's four different types of hydrogen. and where the oil companies say are going to capture all of the co2, the excess methane emissions and were going to sequester it in the ground somehow. and then you move on to green. how do you produce the green

could be very sustainable will be using renewable power. it's a very mason industry. parts of the ira, the investment reduction the inflation reduction act very and aptly named. might call me as a what's the big ira deal? what's it going to do to my clients? [laughter] so, you know, they're going to subsidize with all different technologies in different parts of the country. and even move, there's like this one little transit district and they have buses and they wanted to go green and they couldn't afford electric so they said well how could we do green

hydrogen cracking water and producing their own green hydrogen. and there's a market for it too. then there is pink hydrogen which is produced by nuclear power. we are potentially moving towards nuclear reactors they're going to be standardized. you still have the waste issue to deal with. these were first developed at oregon state university. there are a couple of companies in the approval process. there are different ways of producing hydrogen. there's tremendous promise there. other sustainable fuels in terms of -- i just read about something i totally don't understand in california. they can take mixed waste and turn it into, the carbon comes

out a solid and that's marketable for something. i don't know how it works. there's a lot of cutting edge technology. now we are having conflicts between, because there are so little out there for sustainable aviation fuel. there worried about trucking moving to hydrogen. we really have to get ahead of this. electricity is not going to be the solution for aviation. even though some people are experimenting with hybrid. it may or may not be the solution for long-distance trucking in this country. because of the technology is really called in the charging takes quite a while. at this point we don't have any charging networks. that's also part of the iija and the ira to build up a network. theoretically were going to build out a charging network that is being run by sustainable

power. that's why all the investment when into solar and all those things. we are taking some very big steps in that direction. >> good answer. i enjoyed it. i think were about out of time, aren't we? we can take one more if anybody has a burning question? i want to stop and say thank you it's been really good discussing from my perspective will certainly learned a lot and kind of want to thank you for your dedication to this country. you're a great example for young members of congress coming up in terms of taking this seriously and doing the best you can year doing a great job. mr. defazio: 36 years i never expected to stay that long.

at of all the people are that served in congress on the 65th longest-serving member. michael: thank you so much. [applause] [indiscernible]

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