▶ 0:02:31Committee on Foreign Affairs will come to order. I would ask everybody to rise and join me in reciting the pledge of I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.
▶ 0:03:05Welcome everybody. The purpose of today's hearing is to discuss the department's progress in changing the institution's culture, putting American business and protecting American industry first in our foreign policy. This requires diversifying and securing critical minerals and energy supply chains away from China, reinvigorating our commercial diplomacy enterprise, and letting economic statecraft lead the department.
▶ 0:03:32Instead of recognizing myself for an opening statement, I'm going to recognize Representative Young Kim for the opening statement for the majority side. And in that, uh, Representative Kim, you are
▶ 0:03:44Thank you, Chairman Mass. I'm happy to offer opening remarks. Today, this hearing focuses on commercial diplomacy, which the president's national security strategy puts at the tip of the spear of our foreign policy.
▶ 0:03:59We will hear how the State Department through the leadership of the under secretary of economic affairs deploys the bureaus and offices of economic statecraft to support American businesses abroad, protect American industry at home, and advance our national security interests. For too long, we assumed that global markets would naturally align with US interest. That assumption has proven false.
▶ 0:04:31Our adversaries have weaponized trade, investment, supply chains, and technology to undermine American industrial capacity and expand their influence. As the president has said repeatedly, economic security is national security.
▶ 0:04:51Whether we are talking about enforcing sanctions, securing critical mineral supply chains, building new semiconductor manufacturing capacity, expanding energy exports, or strengthening transportation networks. These priorities are about protecting America, American workers, businesses, and our stig position in the world.
▶ 0:05:17Under President Trump's leadership, US foreign policy is guided by a clear principle. American strength, commercial, industrial, technological, is the foundation of American diplomacy Today, economic policy is not separate from foreign policy. It is at the heart of it.
▶ 0:05:41Last year, this committee led a state department authorization process to evaluate reforms, ensuring the department has the expertise, the structure, and leadership that is necessary to execute that agenda Many of those provisions are now law. We will continue pursuing additional reforms, especially those that empower the bureaus and offices under Mr. Hellberg's perview.
▶ 0:06:11Any reform must meet a simple test. Does it make the United States stronger, safer, more prosperous? The State Department and particularly the so-called E family plays a critical role in this effort. Its global diplomatic footprint provides leverage no other agency possesses.
▶ 0:06:34As we continue our oversight, the committee will examine whether returning the US foreign commercial service to the State Department and strengthen our commercial diplomacy regime reinvigorate a neglected FCS, sharpen accountability and better align economic tools with foreign policy objectives.
▶ 0:06:54That influence must be matched with clear priorities and measurable Since assuming his role last fall, Under Secretary Jacob Hellberg has emphasized supply chain uh security, allied and competition on critical and emerging technologies as core priorities.
▶ 0:07:18Earlier this month, he helped convene the 2026 critical minerals ministerial, bringing together 54 nations to advance more secure and diversified supply chains. His PAX silica initiative focused on securing the full stack from energy and critical minerals to advanced manufacturing and next generation technologies reflects the type of integrated economic strategy this committee expects to see from the
▶ 0:07:49As Congress, we have a responsibility to ensure these initiatives endure beyond any single administration. That is why I alongside with my ranking member um Ammy Bara and chairman Brian Mast, we introduced the bipartisan dominance act to make the United States the partner of choice for countries seeking secure, diversified and resilient critical mineral supply chains.
▶ 0:08:20Breaking China's chokeold on critical minerals will not happen overnight. It will require sustained bipartisan resolve here in Congress and in close coordination with the administration. So I look forward to working with you, Mr. Hellberg, to ensure that your efforts represent not just a progress but decisive step forward ending China's control over the supply chains. Let me be clear.
▶ 0:08:50American economic strength is the foundation of the American leadership abroad. Diplomacy should reinforce US competitiveness and support American workers and businesses and strengthen our long-term industrial and technological base. The department must be empowered to engage and negotiate from a position of strength.
▶ 0:09:14That means standing up to unfair economic practices, enforcing the rules, supporting US energy and exports, and ensuring that American economic power is used deliberately and struggly. We need to ensure our foreign policy institutions are aligned with the realities of the global competition.
▶ 0:09:36I thank Under Secretary Hellberg for joining us today and we look forward to discussing how economic statecraftraft is being implemented and what Congress can do to ensure it delivers true results to the American people. With that, I yield back.
▶ 0:09:53Thank you, Representative Kim. And I don't know if this is because uh people from Rhode Island deal with snow better than people from New York, but offering an opening statement for the minority side is Representative Amo from Rhode Island. So, you are recognized.
▶ 0:10:09Thank you, Mr. Chairman, and uh I'm grateful that the people of Rhode Island uh allow me to be here while they go through three feet of snow uh and and are doing their best to recover from that. Uh but uh Mr. Chairman, thank you for organizing this hearing. Uh despite this committee's oversight role over the state department, we have had frankly very few administration witnesses appear so far this Congress. So I am glad to have the under secretary here for this critical hearing. Mr.
▶ 0:10:38Hellberg, uh thank you for testifying today and welcome. If you ask most Americans what the core of President Trump's foreign policy approach is, they probably give you one word, tariffs. And to the president's credit, he's been consistent on this. He ran on tariffs. He imposed tariffs on our rivals and even more so on our closest allies and partners. Unfortunately, as the Supreme Court ruled on Friday, he has done so illegally in an end run around Congress.
▶ 0:11:05And he has done it at the expense of our diplomatic relationships, but the costs have been most disastrous for hardworking Americans. American families have shouldered the burden of Trump's tariffs through higher prices, bearing 90% of businesses increased import costs. Trump's tariff schemes cost American families $1,700 last year. And American farmers and businesses have been forced to lay off workers as the economy has seen the lowest rates of employment growth outside of the recession years since 2003.
▶ 0:11:35And all that pain for what? Did it improve America's trade deficit? A flat no. Despite the president's promises, America's trade deficit only decreased by.2% last year. And we have not seen the massive onshoring of companies back to the US that he pledged either. The US manufacturing sector lost 70,000 jobs in 2025. But the president remains dead set on finding new ways to tariff.
▶ 0:12:02The worst part is the administration knows very well that the pain its sweeping car it sweeping tariffs have caused on the American people. Why else would they backtrack and issue countless exceptions, only adding to the chaos and economic volatility for American companies and consumers? Because they know tariffs are unpopular, House Republicans resorted to procedural hijinks to avoid voting on the Trump tariffs for nearly a year.
▶ 0:12:29We finally forced a vote earlier this month on ranking Meek's uh ranking member Meeks's bill to stop the car tariffs on which some of my colleagues across the aisle voted uh yes. But the vast majority of Republicans voted to protect Trump's tariff regime at their constituents expense. Let's be very clear.
▶ 0:12:50The president's America first policies, his tariffs, his gutting of the State Department and USAD, and his tarnishing of NATO and other allies have left the United States weaker and more isolated today than we have been in decades. This administration has disrespected, lectured, coerced, and ignored the very allies we need to overcome complex global challenges, including the strategic competition with China.
▶ 0:13:14Now, I was glad to see the administration recently unveil promising new initiatives to bolster critical minerals and AI supply chains after China retaliated against the president's trade war with crippling rare earth e export controls. But multilateral initiatives like this will not succeed so long as this administration continues to take its allies for granted and goes out of its way to disrespect them. I worry that if we don't course correct soon, the damage will in fact be permanent.
▶ 0:13:44If you continue treating your allies like your adversaries, they will eventually be forced to respond in kind. Our allies are already hedging, accommodating the president in the short term, while also securing new investment and trade deals with China. It's no surprise that the Canadian and British prime ministers visited China last month for the first time in nearly eight years. It's also no surprise that our oldest allies are discussing a Canada EUP Pacific trade block that would exclude the United States.
▶ 0:14:14This is a clear case of cause and effect. This is America first in action and it will leave America less prosperous and less respected on the world stage. America first is America alone. The American people deserve answers on how the administration's policies are affecting our global standing, alliances, national security, and economic prosperity. So, I look forward to the discussion today and I yield back.
▶ 0:14:42Other members of the committee are reminded that opening statements may be submitted for the record. We're pleased to have the under secretary of state for economic growth, energy, and environment, Jacob Hellberg, before us today. Your full statements will be made a part of the record and I'll ask that you keep your spoken remarks to about five minutes in order to allow time for member questions. Under Secretary Hellberg, you are recognized. Thank you, Chairman Mass, Ranking Member Migs, and members of the committee.
▶ 0:15:11I did not come here today to litigate trade data or walk you through compliance spreadsheets. I came here to speak to you about national survival. Thank you for the opportunity to testify. I am Jacob Hellberg, President Trump's under secretary of state for economic affairs, serving under Secretary Rubio. The nation that controls the industrial foundations of artificial intelligence will lead this century. The nation that doesn't will depend on those who do.
▶ 0:15:37That is why the United States has built Paxilica, an economic security coalition for the AI century designed to secure the supply chain infrastructure that underlies national power. We have built this coalition with Japan, South Korea, Singapore, Israel, the UAE, the UK, Australia, and Qatar along with essential partners like the Netherlands and Taiwan. Just last week, we welcomed India into the fold.
▶ 0:16:02We are entering an an economic era that will reorder wealth and power, favoring nations that can build and scale free from coercive dependencies on adversarial choke points. In the first industrial revolution, the newly industrialized surged ahead. Historians called it the great divergence. The global economy is now on the foothills of another similar divergence driven by AI. And the numbers show the slope.
▶ 0:16:28PAX silica members are growing more than three times as fast as their G7 peers, averaging 3 to 4% of GDP growth per year since the release of Chad GBT compared to 1% for G7 countries. China has placed the AI revolution at the heart of its new 5-year plan, enhancing innovation at home while aggressively competing for market share abroad. American technological leadership requires supply chain security.
▶ 0:16:56Paxilica is our strategy and we have wasted no time implementing the principles adopted last December. Our efforts focus on two fronts, execution and alignment. First on execution, we begin with the arteries of global trade logistics. In his inaugural speech, President Trump made clear China's control of the Panama Canal was entirely unacceptable to our national security.
▶ 0:17:20I'm pleased to report that last month, the Panameanian Supreme Court invalidated China's control, paving the way for a buyout by Black Rockck. Building on this success, I have directed my office to conduct a strategic review of all logistical corridors with prior state department involvement, including the libido corridor, the Andes Atlantic corridor, and the Luzon corridor in the Philippines.
▶ 0:17:43We will engage Pacilica partners to expand and modernize these corridors by marrying existing infrastructure with new technologies, delivering speed, scale, and certainty to suppliers from Tokyo to Tel Aviv, from Singapore to San Francisco. Next, the muscle industrial production. Industrial capacity is not nostalgia. It is the muscle of sovereignty.
▶ 0:18:07Thanks to Secretary Lutnik, Secretary Besson, and Ambassador Greer, America is My office is a force multiplier, facilit facilitating partnerships with the world's largest industrial companies and focusing economic diplomacy on scalable mineral projects in the United States and allied nations. And finally, the cognition of modern manufacturing core and edge AI infrastructure.
▶ 0:18:33The American AI exports program is a whole of government effort to share the benefits of American AI worldwide. Working with the White House, OSTP, Commerce, and XM, we are scaling this program to meet the explosive demand for trusted core AI infrastructure. And last week, we launched a concierge service to provide PASICA members with consultative support in adopting American technology.
▶ 0:19:01Recognizing that much of the world interacts with AI at the edge through smartphones, not expensive data centers, we also launch a competitive process to award up to $200 million in foreign assistance for secure lowcost devices running on the American software Second on alignment, PAX silica will deepen coordination in three policy areas.
▶ 0:19:26Protection of critical infrastructure and sensitive technologies, alignment of market incentives and anti-dumping practices, and the promotion of a pro-inovation approach to AI policy. Earlier this month, Vice President Vance and Ambassador Greer outlined the contours of a preferential trade zone for minerals and and at the critical minerals ministerial, a major effort ahead for anti-dumping and market incentive coordination.
▶ 0:19:53Last week, we signed the US India joint statement on AI opportunity, a pro-inovation blueprint against efforts by other nations to weaponize global governance as a concept into an instrument of control and wealth extraction against American companies.
▶ 0:20:10And yesterday, the UAE's largest AI company, G42, announced plans to pilot a common operating picture framework that protects sensitive American technology through cryptographic tracking and real-time verifications. If successful, this framework could scale across the Pilica ecosystem. We are moving in Trump time, making progress on all fronts all at once, and expect to see early results before the end of the calendar year.
▶ 0:20:41Consider what this coalition has already accomplished that traditional diplomacy could not. Qatar and Israel now sit inside the same economic framework, a new road toward normalization built not on shared ideology, but on shared supply chains. That is proof that Pilica works. Under President Trump's leadership, America is not waiting for the new divergence to arrive. We will shape it and set the terms. Thank you.
▶ 0:21:08I look forward to your questions and welcome your partnership in moving Pilica from architecture to enduring advantage for our people.
▶ 0:21:17Thank you, Under Secretary Hellberg. We're now going to recognize members for about five minutes of questioning, alternating between Republicans and Democrats. I'm going to begin by recognizing Representative Kim. Thank you, chairman, and thank you again, Under Secretary Hellberg, for joining us today right here. Good morning.
▶ 0:21:38Um, the Commerce Department has proposed cutting the staff of the FCS or uh, you know, by more than half in fiscal year 2026. Over the past two decades, long before the creation of Doge, the number of staff in commerce's International Trade Agency, which includes FCS, has fallen by a third from 2007 to 2025. And additional personnel reductions are on the table.
▶ 0:22:07The steady decline in personnel and funding for FCS is inconsistent with what was argued when FCS was pulled out of the state and moved to commerce in 1979. Some members of the committee want to strengthen the US commerce uh diplomacy and are considering whether to move the FCS back to the state department. So first question to you is what are the pros and cons of moving the FCS to state in your opinion?
▶ 0:22:37Thank you for the uh for the question, Congresswoman. Uh last year before my swearing in, the State Department underwent an extensive reorg to better align its people and capabilities with its core diplomatic mission. Um the basic rationale was that steady bureaucratic accretion and oification under administration of both parties had really distracted our our department from its core mission, which consequently undermined its effectiveness and relevance.
▶ 0:23:05Ultimately, the department's reorganization streamlined department reporting lines and optimized our workforce and drove efficiencies in our operations. Currently, we have moved incredibly fast to achieve uh a record number of peace deals as well as bilateral agreements for critical minerals. We're very satisfied with the results that we're making.
▶ 0:23:27Um, if the Congress chooses to pass reform through both house through both chambers to undertake a reorganization of the department and build on the work that we did last year, that is a certainly a consideration that I'm sure the White House would be happy to uh engage with you on.
▶ 0:23:44If let's say the FCS does not come back to the state, what additional authorities or tools do you need to build states commercial diplomacy to the level that is necessary to fulfill president's national uh security strategy?
▶ 0:24:00So we already have um economic officers dispatched at embassies. Um we we do find those resources helpful. So we have used I'll give you one example in we launched last week a chip concier service to turn our economic force dispatch embassies into business development officers that help promote the adoption of American technology. Um with that being said so far I've only been sworn in for about four months.
▶ 0:24:30I can't say that I've encountered significant uh limitations based on limitations of headcount. uh but I'd be happy to work with you to make sure that the objectives you're trying to advance are actually getting satisfied.
▶ 0:24:43Thank you. Thank you. You know, in addition to overseeing the E family, my subcommittee has jurisdiction over the US uh international development finance corporation and the US trade and development agency. And I also serve on the House Financial Services Committee that oversees the Axim Bank uh which we're in the process of reauthorizing. All of those agencies can be tools in our effort to diversify critical mineral and energy supply chains away from China.
▶ 0:25:12Uh so who in the administration is the traffic cup for making sure each agency's critical minerals initiative is coordinated and not duplicative. And in what regard how do the mineral security partnership well at the state and of course we have project vault at Axim bank and the DFC's increased authority to invest in critical mineral projects align together.
▶ 0:25:40Um thank you very much for the question. Inter agency coordination is incredibly important and the National Security Council runs a very rigorous inter agency coordination process. Um, with respect to the the the mineral security partnership, one of the deliverables that was outlined at the last critical minerals ministerial was actually uh the conversion of the MSP into what has now become the forge and to which we have added a number of countries through bilateral agreements.
▶ 0:26:10Um, Vice President Vance and Ambassador Greer at that historic summit unveiled the concept of creating a preferential trade zone with our allies um by the establishment of a buyer club. We believe that this is the key unlock to directing private capital into uh the mineral refining and mineral extraction sector in a way that really is financially and economically viable.
▶ 0:26:38Um so we will work on a uh on a whole of government basis in coordination with USR and the NSC to actually advance um this preferential trade zone concept. um at through my capacity at the state department I'm actually coordinating with the NYSE to advance this concept uh which was primarily led by USR through the PASICA initiative because Pacilica countries are home to the vast majority of high-end
▶ 0:27:09technology manufacturers outside of China and so we're very committed to inter agency coordination we try to uh maintain a balance between having an entrepreneurial approach while making sure that there's nothing dup duplicative and that we can leverage each other's um programs as a force
▶ 0:27:30Thank you. As you uh implement the uh the forge, if there are additional authorities or tools you need, please let us know. Happy to work with you. Thank you.
▶ 0:27:39Happy to work with you as well. Thank
▶ 0:27:41Representative Almo. You're recognized.
▶ 0:27:43Thank you, Mr. Chairman, and thanks again, Under Secretary, for being here. Uh you're responsible for advancing American commercial interests abroad, opening markets, supporting US businesses, and strengthening our economic position. Because your role is so very important to the US's role in uh the global economy, I want to make sure we're on the same page with a few straightforward yes or no questions. Can the United States thrive in the global economy completely on its own? Yes or
▶ 0:28:12Thank you, Congressman, for uh your question. The United States is obviously not alone. We just hosted the one of the
▶ 0:28:18So that's a yes. I got one of the largest ministerials in our department's history with over 55 countries in
▶ 0:28:24Does the United States have economic and national security advantages that depend on strong alliances and global partnerships? Yes or no?
▶ 0:28:32Congressman, the United States has probably the strongest alliances it's ever had. We created Thank you. No, I'm going to reclaim my time. Hold on. Through the National Security.
▶ 0:28:40Should public officials ever use their positions to enrich themselves or their families? Yes or no?
▶ 0:28:46I'm sorry. Am I repeating the question?
▶ 0:28:47Should public officials ever use their positions to enrich themselves or their
▶ 0:28:51I obviously totally disagree with the premise of your question.
▶ 0:28:54It's a yes or no.
▶ 0:28:55I I it's
▶ 0:28:56all right. Well Well, that that's that's
▶ 0:28:58agree with the premise of your question. You're implying improper conduct, which I obviously disagree with. There's no basis for that.
▶ 0:29:04Well, I I'm sure nobody's made any money off of the dealings that are are happening right now. But let's keep going. Should should our foreign policy be based on the profit motives of private individuals over that of working Americans or our national security?
▶ 0:29:18Congressman, you're making uh an uh an insinuation about mal intent. I
▶ 0:29:23Mr. Elberg, I reclaim my time. If you can't give clear answers to these simple questions, that tells me a lot. The reality is this, and I think you agreed with this part, which is we do not succeed alone. Our economic strength depends on alliances and public service is not a vehicle for personal gain. I believe that. I would hope you believe that too. But you seem to think it's fine the public officials in this administration are using their positions to enrich themselves and their families. Well, you didn't answer a question.
▶ 0:29:52Here's the thing. Here's the thing.
▶ 0:29:53President Trump's chaotic tariff policy undermines that reality. Instead of fulfilling your role as under secretary to stabilize our commercial commercial diplomacy, you said that Trump's tariffs are quote an indispensable shield unquote that will bring back American manufacturing. Trump's tariffs have been declared by the Supreme Court
▶ 0:30:13as illegal, arbitrary, and constantly shifting. And a after the Supreme Court made its ruling, he announced a a new 10% global tariff and wants to go higher. That kind of whiplash makes it impossible for our allies to negotiate in good faith and workers, manufacturers, and American consumers are suffering the consequences. That's a fact. Recent studies, excuse me, I'm reclaiming my time, Mr. Elberg.
▶ 0:30:38Recent studies have shown Americans are paying 95% of these tariffs and they cost the average household about $1,000 in 2025. And domestic manufacturing has declined under President Trump's watch. the manufacturing industry lost 108,000 jobs during the first year of his second term. And we're going to hear differently tonight, but those are the facts. Manufacturers in my district, the people I work for, that you work for too, are telling me that they're they're hurt and they're not being helped.
▶ 0:31:09One told me, quote, "If the goal is to help bring back manufacturing industries and jobs to the United States, the current administration's sweeping tariff policy is having the complete opposite effect. A so-called indispensable shield does not create chaos. It doesn't raise costs. And it doesn't weaken our standing with our allies. Your job as a public servant is to strengthen American commercial diplomacy, not to defend Trump's instability that makes us less competitive and less trusted around the world.
▶ 0:31:39Costs are rising, small businesses are struggling, and our global credibility is eroding. That is the state of the union, the real state of the union that we will hear, we should be hearing tonight. But we're going to hear the opposite. We will hear some halftruths and maybe some lies. We should be pursuing a stable, strategic trade policy that strengthens alliances and lowers costs, not pushing one that creates confusion and hands leverage to our competitors.
▶ 0:32:04Look, I look forward to you and your role uh deciding that you're going to stand up for the American people to put Americans first and not America last. That is what public servants are supposed to do. I'm not trying to lecture you, but the American people are looking for more. They're demanding more. And with that, I yield back.
▶ 0:32:26Representative yields back. Heisenga is recognized.
▶ 0:32:31Uh, thank you, Mr. Chairman. Uh, sorry to my colleague. I I I I gofod when I he said he wasn't trying to lecture you. Sounded like a lecture. Uh, and I don't know about the manufacturing base in Rhode Island, but I can tell you the manufacturing base in Michigan uh at worst has been mixed and most economists there will tell you it's been an improvement for manufacturing in Michigan. Um, so uh Mr.
▶ 0:32:54Hellberg, I uh I I do want to note uh that I going to focus on some of the technology uh but I am pleased to see and to hear that you are talking about places like the Panama Canal uh about the Luzon corridor in the Philippines. Um I I've spent extensive amount of time in the Philippines.
▶ 0:33:12I think that frankly is one of those areas of the world that has been um not focused on enough and the influence of what has uh happened in uh because of China and what they've been doing. Um I want to talk a little bit about your uh tweet yesterday uh that uh that you had put out and and you had you had talked a little bit about G42 in your o in your opening statement.
▶ 0:33:38Uh I too have been long concerned with the security of America's crown jewels technology deployed and how it's being deployed worldwide especially in countries like with historic ties to the Communist Party. Um that's why I'm encouraged like you were in your in your tweet about the assurance compute framework unveiled by uh by the uh UAE based AI company G42 as part of this pack silica.
▶ 0:34:04Um could you tell us a little bit just unpack very quickly because I want to get to another issue about the importance of creating safe safeguards so the US technology doesn't fall into the hands of the Chinese Communist Party.
▶ 0:34:15Absolutely congressman and uh thank you so much for giving me the opportunity to to weigh in on this. So as you know the current the BIS rule that was rolled out in January requires exporters to meet very strict conditions including in including US third party testing, know your customer procedures and physical security certifications and screening of all remote access users.
▶ 0:34:39The reason that the G42 announcement yesterday is significant is because it actually sets a pilot for a potential model on a voluntary basis for a large company to use cryptographic tracking uh as well as um as well as enduser verifications to track every single token on G42's AI cluster.
▶ 0:35:04They are setting out, they agreed to build a common operating picture that would could allow American policy makers to actually have total transparency and assurance that the the clusters in the UAE used and owned by G42 are not being accessed improperly by uh individuals and entities that would go against um American export control rules. So, it's a voluntary framework.
▶ 0:35:32It's incredibly uh it's it's an incredibly uh positive.
▶ 0:35:37I I agree. That's why frankly I'm sponsoring the chip security act which would ensure that our AI chips uh can't be smuggled into places like uh like China. Um uh supply supply chain resilience is a key to dominating the the global economy. China understands this. Uh they're exploiting every avenue that they can to gain an advantage over the United States and the West at large.
▶ 0:35:58Uh I was pleased to see the roll out of PAX silica uh which seeks to secure the supply chain of the entire AI stack by working closely with partners and allies to protect this future defining technology. I also uh want to note that I applaud the addition of India uh to that uh they are a very um well it rightly acknowledges their their geostrategic uh place and significance in the development of AI.
▶ 0:36:24Um, can you provide insight into how Pacilica interacts with other multi- uh uh lateral forums such as the G7, the Quad and AUS and uh where do you see opportunities to expand inter agency
▶ 0:36:39Thank you for the question, Congressman. So the uh interesting aspect about pacilica is that it's a grouping of countries that is unique and different from the G20, the G7 um as well as other pre-existing groupings that the US had been a part of. Um it is a grouping tailored for the AI economy. So it includes countries that actually have unique and differentiated capabilities that play make significant contributions to different layers of the AI supply chain.
▶ 0:37:08Um, India is probably the only country in the world that rivals China in terms of the depth of its uh, human capital and talent. It's also the world's the world's third largest mineral refiner. Um, even though it currently accounts for only 1% of global market share. Um, obviously South Korea and Japan are home to uh, incredibly advanced high bandwidth memory companies as well as semiconductor manufacturing companies.
▶ 0:37:37The PAS silica includes countries like I2U2 and the quad. So it actually is more comprehensive and one of the the beneficial aspects about it is we have intentionally kept it flexible. So it is a multilateral um grouping. It's a platform where we can do plurilateral work. Not everything has to include all 11 countries.
▶ 0:38:01So we're we're using the platform to engage countries on a bilateral basis as well as a plurilateral basis to partner with each other as well as to partner with each other in third markets uh including in places like Africa which is obviously um the main home of the vast majority of where where the world's um uh uh minerals currently come from.
▶ 0:38:26I just returned from Nigeria not that long ago. They're very interested in the these types of things. So, u my my time has expired. Uh but I appreciate you being here today uh and giving you an opportunity to actually speak. So, with that, I yield back. Mr. Chairman,
▶ 0:38:41Representative Chairman, your
▶ 0:38:43Mr. Chairman, I'm going to use the first minute or two to deal with an issue perhaps relevant to the Middle East subcommittee and also to the uh rights and privileges of members of this committee. There are a number of statutes that require us that require the administration to give notices to the committee and of course in due course those are shared with the ranking member and notices shared with all members of the committee.
▶ 0:39:09Um there's probably nothing more important than preventing nuclear proliferation and an important part of that is whether we agree to a nuclear cooperation agreement with such countries as Saudi Arabia. These come together because in uh 2020 I was able to add uh add section 1264 to the NDAA which requires that before the president even begin uh to allow Congress to review it's
▶ 0:39:40uh a nuclear cooperation agreement with Saudi Arabia. he has to file 90 days in advance of the beginning of the review a statement with this committee a report and in fact it appears that a report was filed in late November.
▶ 0:39:57It is quite possible that this report went to your personal office rather than the uh committee's office in which case it would have been ineffective and the uh would not have started. In any case, no Democrat became aware of this, at least no Democrat on this committee became aware of this until this month.
▶ 0:40:21uh I hope that this committee will draw the line and say that report uh has not been filed with the committee at least until February and that's when the 90 days begins. But much more important, we've got to look at whether we want a nuclear cooperation agreement with Saudi Arabia that does not have the safeguards that we negotiated with the UAE. And uh that's why I hope members of this committee will co-sponsor a bill that I've sent a dear colleague out on.
▶ 0:40:50That is the bill that Senator Rubio and I introduced in 2018 and it requires that for a nuclear cooperation with Saudi uh agreement with Saudi Arabia there has to be an affirmative vote of Congress. So while the procedure is interesting uh the substance has got to be that we need an affirmative vote.
▶ 0:41:14Uh, I think Senator Rubio was wise, perhaps sometimes wiser than Secretary Rubio, and I hope that all members will join me in that effort. Uh, as to the statement of our witness who says that whoever uh leads in AI will lead in this century, I agree with you. But you assume it's going to be the United States or China.
▶ 0:41:36Some people might bet on Europe, but your statement doesn't be start on the idea of what if AI itself is in control. Humankind is spending trillions of dollars to make AI more powerful. Virtually nothing. I would say nothing is being spent to monitor for and prevent self-awareness, ambition, self-direction. uh I have a bill on uh that and I hope my colleagues will join me and to establish a research center to look at that.
▶ 0:42:06And in the meantime, uh this uh I would commend to our witness the 2008 hearing that we conducted in this room uh that I chaired dealing with uh AI using the non-prololiferation treaty as a model for which you should be negotiating with China not uh with regard to making sure that AI is controllable. Uh the movie industry is one of our biggest exports and it's a multiplier because it sets the tone.
▶ 0:42:35It makes our other products interesting. It builds our name brand. It helps our foreign policy. It really influences and controls world culture. And yet our movies have to deal with a number of unfair barriers. Most importantly is in China where only 40 movies are allowed every year to be in their theaters. We could limit China to only 40 electronic products or 40 toys.
▶ 0:43:01Um we have uh a a situation in China where instead of the theater owner giving half the revenue, not even half the revenue, half the box office revenue, none nothing for the popcorn to the movie to the movie maker, it's sometimes as low as 20%. Uh Australia and Canada have local uh content uh uh provisions. What steps are you taking so that our trading partners will fairly treat the uh movie exports?
▶ 0:43:31Thank you for that question. Um, Congressman, there's a a lot of topics that you touched upon there. Um, so on on your concerns about nuclear, that obviously falls under the the remitt of my colleague uh under secretary Dano uh who oversees 123 agreements. Um with respect to your comment on AI, um our policy is we are very concerned about um the landscape getting quite competitive between the US and China.
▶ 0:43:59And so our policy is to accelerate innovation through tax incentive, energy dominance and deregulation that allows in the US.
▶ 0:44:08My my question is humankind versus AI, not China versus the US. If the US, US beats China, but AI itself is in control. Uh, as I told one Chinese diplomat, the the machines that destroy humankind will be designed in Silicon Valley, not in Shanghai. Therefore, we
▶ 0:44:32Uh, Congressman, I think you're you're um articulating a hypothetical future where machines take control. Um what we do know today for sure is that China is racing to outpace us in AI innovation and that the benefits of their AI progress flow directly to the people's liberation army and that is a national security risk that we are not willing to to take and so our policy is to make sure that the US government stays
▶ 0:45:02in the lead by at home we want to accelerate innovation and abroad we want to encourage the adoption of American Representative Self.
▶ 0:45:13Uh, thank you, Mr. Chairman. I want to kind of tie I'm over here.
▶ 0:45:18Here we go.
▶ 0:45:18There you are.
▶ 0:45:19Um, I want to kind of tie your China expertise with our conversation today. Uh, first of all, just to comment, uh, you you mentioned that Cutter is now in PAX Silica. and uh I represent a district in North Texas and I we are very concerned that Saudi money and Qatar money are are funding the Islamization of Texas. Uh so as you go about this just take that point back.
▶ 0:45:45Now uh in your remitt apparently you are responsible for reviving the defense industrial base amongst other things Um and you admit that AI includes critical minerals.
▶ 0:46:01So the first question is uh how do we deter China if they process 92% of all critical minerals today and they import 73% of their oil and I'm going to be referring to tidal wave done by the heritage folks strategic exploitation and sustainment in the US China conflict because my first question is critical minerals and oil and then we'll move on
▶ 0:46:29and so sorry your your question, Congressman, was how do we deter China to do what exactly?
▶ 0:46:34Yeah. If they already process 92% of all critical minerals around the world, how fast can we pair down their 92% of processed minerals regardless of where they're mined?
▶ 0:46:46Start with that one.
▶ 0:46:47Thank you. Uh thank you for the question. It's obviously the this fundamental uh challenge that our country faces that we are racing to address. Um our approach is multiffold. We on the one hand are racing as fast as possible in order to bring that number down. You're entirely correct that China processes somewhere in the neighborhood of 90% of the world's refining capacity.
▶ 0:47:11Um we want to bring that number down and we're are working to do that by focusing on brownfield projects um in a multitude of different geographies. So while the commerce department along with USR are focused on um revitalizing uh projects uh refining projects in the US, the state department is supplementing those efforts by looking at and mapping out where uh the the biggest and most promising refining capacity
▶ 0:47:42on a brownfield basis are located and then identifying who the right constellation of partners are to deploy capital and bring those projects back online. There's refining capacity in Australia. There's refining capacity in India, in South Korea. We want to expand that and we can do that on a much more compressed timeline than building refining capacity entirely from scratch. The you you also brought up the point about deterrence, which is really key.
▶ 0:48:10And while it's true that China controls 90% of the world's refining capacity, the US actually China is incredibly vulnerable for its energy imports
▶ 0:48:21and that is a point of leverage that the administration is keenly aware of. Um obviously the Chinese are also very much aware of that and that is very much part of you know how we look at our economic deterrence posture.
▶ 0:48:37Okay. And uh last last year we held a hearing on the bureau of cyerspace and digital policy. Now under your jur jurisdiction in e how is the positioning of this bureau improved or enhanced the state's interest to advance our leadership abroad in all of these emerging technologies because it was pretty morabund. Uh so tell us how you have have improved their actions.
▶ 0:49:04So it's very simple. Um prior administrations uh had a very government- centric approach to technology focusing on um engaging international foras and and the like uh focusing on uh standards and norms. Our approach is based on the premise that our innovations come out of the private sector not the government.
▶ 0:49:28And so a lot of our work is geared at engaging private companies who are actually the engines of where a lot of these innovations come from. We're doing this to um secure the supply chain through offtake agreements. We're doing this to help better understand vulnerabilities in the map of the supply chain. Um it is through engaging with the private sector that uh that we are actually addressing a lot of the challenges that our technology companies face. Okay.
▶ 0:49:58And quickly, you've mentioned AI several times here. When you match AI with quantum computing, people seem to think that will be the keys to the kingdom. Can you address quantum computing with
▶ 0:50:13So, let me just preface with saying that quantum computing is probably one of the most advanced fields of scientific research that in all honesty, uh, less than 100 people in the world truly understand.
▶ 0:50:26Um, with that being said, uh, I I would agree, uh, that the combination of the power of quantum computers combined with the capabilities of artificial intelligence, um, is incredibly potent and would really be unlike anything we've experienced. Uh, and so I I agree with that statement.
▶ 0:50:49I recommend you follow it closely, Mr. Chairman. I yield back.
▶ 0:50:52Thank you, Mr. Self. Representative Barah. Thank you, Mr. Chairman. Um, thank you for being here, Secretary Hellberg. Um, I'm going to ask about a piece of legislation that we passed out of this committee in a bipartisan way. Um, that created the US Foundation for National Security and Counterterrorism, also was led in the Senate by Senator Graham and and Coons.
▶ 0:51:13Um, it created a public private partnership that leverages the private sector and philanthropic funding to make our federal dollars go further in preserving vulnerable protected areas in allied and partnered developed countries. It'll fall under your bureau. Um, initial steps have been taken um but it isn't quite meeting the um statutory guidelines um to fully launch this um piece of legislation.
▶ 0:51:38And again, it's it should fit with the um the priorities of Secretary um Rubio as well as the administration and creating that partnership. you've only been on the job for for four months, so I won't ask you to to um give me the the full details, but what I would love is um if the committee either at the staff level or at um at your level could just give us an update to the committee to the members of progress and if there's anything that you need on our end.
▶ 0:52:07Again, nonpartisan, you know, a a good leverage, a good bill. So, would love to to get that feedback and and get a sense of how implementation's going.
▶ 0:52:16Thank you very much, Congressman. So, um I am tracking the implementation of that bill. It's I know it's an issue that um Senator Graham and Senator Coons care a great deal about and um received bipartisan support. Um my understanding is there is still some ongoing discussion about who the right nominees are for the staffing of this new foundation. Um, I'd be happy.
▶ 0:52:41You know, the the selection of nominees is obviously um rests with authorities that are outside of the State Department's purview and uh resides with the president's choices out of the White House and the presidential personnel office. Um, I'd be happy to um follow up with my colleagues at PO as well as engage your office to uh make sure that the questions that you raised um you know that we can provide answers to
▶ 0:53:08Wonderful. Thank you. Um, also last year I introduced the bipartisan mineral security partnership authorization act. Um, that's part of the dominance act that um, chairwoman Kim um, discuss nonpartisan and so forth. Um, earlier this month at the critical minerals um, ministerial, secretary Rubio announced the forum on resource geostrategic engagement or um, forge as a successor to the MSP.
▶ 0:53:36Um, outside of broadening the coalition and bringing additional countries in, can you briefly give us an update on how Forge is going to differ from the MSP again um and what that looks like?
▶ 0:53:49Absolutely. So, um, Forge includes a number of different new members. So, the membership the composition of the membership is slightly different, but the the the most important difference is the introduction of the preferential trade zone concept. um which is really the landmark concept introduced by Vice President Vance and Ambassador Greer at the the critical minerals ministerial earlier this month.
▶ 0:54:15So just expanding on that for the preferential trade zones will that be housed under um your bureau or will that be under USR or a combination of of
▶ 0:54:26So trade negotiations are really led out of commerce and USR primarily. Um um so ultimately you know they tend to be the ones leading those discussions. Um with that being said uh my work the work of my bureau will be including them and coordinating with them very closely to advance the preferential trade zone concept through the PACIA framework.
▶ 0:54:52So we want to make sure that all of the the world's biggest manufacturers of the most strategic technologies are actually signed on to this this preferential trade zone concept u because those are the main offtakers for the world's minerals. And then briefly just following up on um a line of questioning that Congressman Self had recently chairwoman Kim, myself, Congresswoman um Oshvski went down to Peru to look at some of the US company mining operations down there.
▶ 0:55:23Um obviously there's plenty of um rare earth elements, critical minerals around the world. Um, Congressman South rightfully suggests that there's a choice point on um the refining capacity that still all largely gets sent to um to China. Um the Chinese also undercut the market in terms of um you know how how they approach this.
▶ 0:55:46So again, I'm heartened to see that prioritization of creating redundant refining capacity may not be in the United States, but if places like India, Malaysia, other parts can develop that, we will have other places to send.
▶ 0:56:02Absolutely. Um the one of the so one of the interesting things about PAXICA is that because it's home to um some of the world's largest investors um and by that I I include not just sovereign wealth funds but also large companies that deploy capital in lots of different places is the opportunity to partner with them in third markets and so you're completely correct that uh geographies like Malaysia, Indonesia, Vietnam are already home to quite a bit of uh refining capacity
▶ 0:56:33obviously ly it's nothing compared to China but uh as I mentioned earlier the presence of brownfield projects is really the main platform that will allow us to actually uh bring our uh dependency rates down
▶ 0:56:48thank you representative
▶ 0:56:52thank you Mr. chairman. Uh welcome, sir. Four months on the job, you're in front of us. That's good. Good on you. Thank you for your work and your uh explanation and what you're doing with PACIA as well. Uh your opening statements kind of remind me of what the president al is also focusing on and that's how important the Indopacific is on economic and geopolitical uh background in the 21st century.
▶ 0:57:15Uh we understand deputy secretary Landreo is currently in Honolulu there for a prosperity summit talking about investments and security in the region. Of course we have our second island chain uh too that's also very important to the United States the federated station of Micronesia Palao um and Marshall Islands as well and Guam is part of that second island chain too.
▶ 0:57:38uh we have US aid is is quite helpful but in many of these islands uh Chinese aid exceeds the US and now we're faced with uh another looking at the rare rare minerals and get where are we going to get that next and it's going into the deep sea mining so this is really a controversial issue uh for the Pacific islands in fact all all the US territories have voiced opposition uh to deep sea mining as well as Palao and Fiji and federal Federated States
▶ 0:58:08of uh Tavalu and Vanu Vanoet. So um Mr. Hbert, how does the department seek to deepen their cooperation with the Pacific island countries in commercial diplomacy enough to counter Chinese Chinese advancement in the region? and uh is the department leveraging its cooperation with MCC and DFC enough in this region?
▶ 0:58:39Thank you, Congressman. Um, one of the one of the notable uh approaches of this administration has actually been to engage a lot of countries that um historically the United States and and prior administrations have tended to overlook. Um, one of the ways in which that's reflected is we have forged bilateral deals with countries like Kazakhstan, with Armenia and Azir John.
▶ 0:59:04Um, I have personally met with um, leaders from the Cook Islands, the Marshall Islands, um, Palao. So, we are engaged with Pacific Island countries. U, based on my conversations, I'm not tracking significant opposition to deep sea mining. In fact, a lot of them seem to be quite open to it.
▶ 0:59:22They um they did note obviously the presence of certain environmental groups that have concerns about deep sea mining, but um the the ones I've spoken to really seem to see this as an economic opportunity and a path to economic development and and they'll be very quick to point to that China's obviously allin and racing to um exploit deep sea minerals without asking for anyone's permission.
▶ 0:59:49uh sometimes in violation of the sovereignty of some of these Pacific island countries. So we um uh one of the president's very first executive orders after being sworn in was on deep sea mining.
▶ 1:00:03And so we are very much looking at um at the implementation of uh that executive order uh both through partnership uh through partnerships with Pacific Island countries as well as by engaging private American private companies who are actually developing the kind of cutting edge technology needed to operationalize this.
▶ 1:00:24Um there's a company that is looking at building a very very large marquee uh u u poly metallic nodule refining facility in Texas that actually holds a lot of promise and so that is one of the projects that we're looking at through the pack silica consortium at potentially supporting.
▶ 1:00:48Thank you. We did meet with uh BOM also and they're on their way to Guam too. Uh and there's some regulation changes where they're now saying they don't have to engage the government or or get the opinion from the public. But I I can assure you we're it's not um it's not hunky dory. It's not going over too well, but but the explanation needs to be clearer and questions need to be asked. There's different technologies uh that they're still looking at.
▶ 1:01:16Uh but I understand from this point we got there is some time to really look at this but I'm really concerned and from your point of view sir I I appreciate that you make sure the people of the islands are well taken care of. This is our livelihood the ocean and we can't have that really disturbed but at the same time we want to look at the nation's uh the importance of our security in the nation as well.
▶ 1:01:39Can can you touch on it just a little on theou you have with Cook So we um as you know very I think it was the week after the president's inauguration the Cook Islands um signed a bilateral uou with China which was less than ideal.
▶ 1:02:00Um since then we have obviously engaged the Cook Islands and uh we are basically looking at uh dramatically expanding our commercial relationship with them including um with respect to infrastructure investments which they are are very much eager about. They want infrastructure investment for telecommunications for transportation infrastructure um as well as for deep sea mining which is obviously something that we care about a great deal for our national security. Thank you very much.
▶ 1:02:30Welcome to the jaw.
▶ 1:02:31Thank you,
▶ 1:02:32Representative Chesky.
▶ 1:02:35Thank you very much, Mr. Chairman. Uh, I do want to thank Chairman Mast for holding this important hearing. I want to thank you, Under Secretary Hellberg, for being here today. I want to start by saying how much I agree with the need to protect American interests, including our national security. Uh it's why I want to open my remarks by thanking my colleagues uh Chairman Mast, Representatives Kim, Barah, and Heisinga for their leadership and their partnership on the dominance act legislation that will help crack down on China's chokeold on critical minerals.
▶ 1:03:05I look forward to our consideration of this bipartisan and biccameal Mr. Secretary though you opened by emphasizing America's need to build and scale AI free from adversarial influence explicitly citing China as one of the major areas of concern.
▶ 1:03:25Given those valid concerns, I feel a little obligated to point out that just last month, the Wall Street Journal reported that just before President Trump's inauguration, Shake Tanoon, the UAE's national security adviser and owner of AI firm G2 that you also referenced, quietly bought a 49% stake in the Trump family cryptocurrency business, World Liberty Financial, for half a billion dollar.
▶ 1:03:53That money came through a UAE royal family entity which reportedly sent about another $187 million directly to Trump family entities and another 31 million to entities tied to Steve Witoff's family.
▶ 1:04:10Soon after that massive payment, President Trump approved UAE's access to roughly 500,000 of America's most advanced AI chips every year, with nearly half going to, wait for it, Shake Tahoon's company G42.
▶ 1:04:27National security personnel had previously flagged G42 for its ties to China, warning in 2023 that Beijing was exploiting the relationship with G42 to advance espionage against US government officials. But it doesn't stop there. Tanoon controls firm MGX used World Liberty's financial stablecoin to funnel $2 billion into Binance in 2025.
▶ 1:04:53Just seven months after that, Binance founder CZ, the crypto con king, received a presidential pardon from President Trump. So, let's be clear. A powerful UAE royal wants US AI chips he can't access. He writes an enormous check for nearly half of Trump's crypto venture, enriching Trump, the Witoffs, and other insiders.
▶ 1:05:16The same network funnels two billion into Binance through World Liberty Financial Stablecoin, followed swiftly by a high-profile pardon. Facts, Mr. Under Secretary, not suggestions. And all of this unfolds while Trump and his family are still still publicly associated with World Liberty Financial on the website. And we're close enough you can see it. They are still on the website. It seems pretty clear to me this is not diplomacy.
▶ 1:05:44This is a pay-to-play scheme and a payforpardon pipeline. Americans who are being crushed by higher costs know exactly what's going on. The rich and the powerful are buying their way out of accountability and the corruption is beyond acceptable. Anyone with common sense can see it. So, Mr. Under Secretary, first, do you dispute any of the facts as I've outlined them to you?
▶ 1:06:06Yes. So, um I think there's uh obviously a lot to unpack in in your uh u recap of the Wall Street Journal story that you're referring to, but um I think if I could just start by the beginning, the first is um there there are assertions about World Liberty Financial. There's assertions about mal intent around the UAE. And then the
▶ 1:06:29those are just facts, Mr. Secretary. There are no no assertions there.
▶ 1:06:31I could just finish if I could just finish. You went on for quite some time. And then there is the question of what is the relationship between world liberty financial and the UAE. Um so I am privy to no particular information about Liberty Financial. What I will say about the UAE they the connection between World Liberty Financial and the UAE is based on a Wall Street Journal story and I'm sorry but I know better than to u operate on the assumption that every Wall Street Journal story is entirely factual.
▶ 1:06:59So would you welcome an oversight hearing on this issue?
▶ 1:07:01And and what I will say would you welcome an oversight hearing on this issue? just finish if I can just finish the your the answer to your question. Um and what I will say is um I think that question um and the accusation really presumes uh has baked into it a presumption of malent uh and malfeasants on the part of the UAE which I really think is not warranted. The UAE um joined the Abraham Accords incredibly early at great political cost to itself.
▶ 1:07:31Um it has it is a major investor across the board. It's it has leadership that is they're a major investor. All right.
▶ 1:07:38That that that is um that is very interested in technology and it's a major investor in our technology sector. They invested in global foundaries. They brought Cerebrris almost back from the dead. And Cerebrris today is a crown jewel of American technology. It is a semiconductor design company. and we're very lucky to have uh talented founders in the US that were able to get resources to actually build transformative technology.
▶ 1:08:04The last point that I would add is your assertions about um about you know there being improper conduct I think presumes that uh the UAE somehow got access to technology that it wouldn't have been able to get which is totally not true because we want to export AI chips. I just laid out the facts as they're presented to us that aims entirely at exporting AI chips and we launched the chip concier service to provide white
▶ 1:08:31We could do all that without that investment in the Trump family cryptocurrency. We could do all that without the to give them access to AI technology. So the UAE uh was never barred under this administration from getting access to AI chips because we want to encourage their adoption of They could have had that without the
▶ 1:08:52questionably bad timing of that kind of a massive investment in a Trump family business. You can't agree that that's at least a bad look.
▶ 1:08:59It's Congressman, what I will say is um I I I'm not going to comment on the Wall Street Journal story. It's u it's unconfirmed and
▶ 1:09:08well then let's have a hearing. We can confirm it. Let's get to the bottom of it. and and and are the position of the administration is we actually support we think it's a good thing if foreign uh countries and companies want to buy American technology. My
▶ 1:09:21I look forward to you with you doing that without it enriching public officials in the process to promote American chairman representative Wilson is now recognized.
▶ 1:09:32Thank you very much Mr. Chairman and Secretary Hberg. I want to thank you for your promotion of economic growth. Uh it's so important with the achievements of record investments that President Donald Trump has made. I've never seen a president with such achievements. We know that he secured $150 billion while he was um visiting with promises uh from the EU.
▶ 1:09:54uh his visit to Qar 96 billion to uh Doha and then to onto Saudi Arabia with 96 billion uh UAE 100 billion as you mentioned uh 50 billion from uh Japan and 75 billion from Korea over and over again uh you have a great job because you're dealing with a president who uh is uh making record. We've we've never had anything like this. I mean it's just uh these are jobs.
▶ 1:10:20Uh and with that the Trump administration policy is mutually beneficial economic diplomacy. With that in mind, in the case of Syria, 54 years of ba'ist socialist regime dictatorship has been ended with the ouster of mass murderer Assad. Investments are critical for stabilization and prosperity in line with the President Trump's vision. And I'm really grateful he was the one who said give Syria a chance in uh while he was visiting Riad.
▶ 1:10:50And then from that he lifted the Caesar sanctions. And so we're on a a way to indeed uh develop a relationship, a positive relationship with such an important country. And uh additionally uh there are remaining barriers such as old business laws, the pending lifting of the state sponsor of terrorism designation and security of private industry. uh what is your department doing to make it available to the Syrian government?
▶ 1:11:18And also I was really happy president Chairman Mast uh met with um President Alshara uh here in Washington and historically it was the first visit by a Syrian leader to the White House in 250 years of American history in 8,000 years of Syrian history. With that in mind, what can we do to remove barriers for more investments in Syria?
▶ 1:11:41Thank you very much. Um, Congressman, and uh, let me just say that I entirely uh, agree with um, your observations. Um, as you know, the president announced lifting of sanctions on May 13th of last year. Of has issued a general license um, in May, broadly uh, authorizing previously prohibited transactions. We are engaged in a gradual roll back of sanctions um, on Syria.
▶ 1:12:09The president made it clear during his his historic visit to the Middle East that um our policy is to give Syria a chance at greatness, which includes rolling back sanctions, encouraging private investment, the rebuilding of foundational infrastructure in order to allow the Syrian economy to actually uh come back um in in out from the cold um after it was frozen out from the global economy um uh during the the unraveling of the
▶ 1:12:39Syrian revolution. Um, if you have specific tactical ideas, I know that Congress repealed the Caesar Act, which was obviously an important step. Um, if you have if there are tactical ideas um that you would like to share with my office on additional steps that we could take, I would certainly welcome working with you and your team on that.
▶ 1:12:58and and immediately we will be in touch and indeed we need to uh lift the uh state sponsor of terrorism and I'm just uh so hopeful for the hey for the people of Syria what this will mean uh and then uh as you're doing this in the context of my home state of South Carolina we understand foreign direct investment I was really grateful to work with Governor Jim Edwards to recruit Michelin to South Carolina we now have the world's largest Michelin tire manufacturing facility in my home district of Lexington and then working with Governor
▶ 1:13:28Carol Campbell. Uh I was really grateful he recruited BMW. Uh we're very happy. Uh $18.2 billion investment. Even Chairman Mast would be impressed with that number. Uh and I'm really grateful that uh what occurred. Um initially they uh they were skeptical. They were thinking maybe Bavarian Motorworks would have to change the name of Bubba Motor Works. Well, Bubba's done good. And so it it's mutually beneficial.
▶ 1:13:52And then I'm really grateful with Governor Nikki Haley, Senator Lindsey Graham, Senator Tim Scott, Attorney General Alan Wilson. There was an effort by the Obama administration to close the BM, excuse me, the Boeing facility in Charleston. Uh, but we fought back and now there are 10,000 employees there. I'm really grateful President Trump visited uh to uh point out how significant the 787s are worldwide.
▶ 1:14:16And I'm grateful just a couple months ago, sec Treasury Secretary Scott Bessant was back in his hometown of Charleston uh where it was announced that Boeing would be doubling uh their production and it was very helpful that President Trump received a 96 billion or order of 787s while visiting Doha. Thank you very much.
▶ 1:14:38Thank you,
▶ 1:14:39Representative Schneider.
▶ 1:14:42Thank you. And uh Mr. Under Siri, Under Secretary, thank you for being here. Tonight, the president uh will uh address the nation uh talk about the State of the Union and undoubtedly claim that the economy is strong. You mentioned in your opening remarks that America is re-industrializing. And just briefly, I'm going to try to manage time. I have a lot of questions. How many jobs did the US economy create last
▶ 1:15:04Congressman, as you know,
▶ 1:15:05number I'll tell you, it's I'm claiming my time. It's 181,000 jobs. Excuse me. I'm reclaiming my time. How many manufacturing jobs did the economy create last year?
▶ 1:15:15Congressman, I'm not sure you're interested in my response.
▶ 1:15:18Well, it's an answer. This is an
▶ 1:15:20As you know, the president secured 9
▶ 1:15:23All right, I'll stop you because you're not going to answer the question. The economy lost I'm reclaiming my time. The economy lost jobs last year. Uh the Bureau of Economic Analysis uh President's Bureau of Econ economic analysis says the economy grew at 2.2% in 25. That was president's first year. It grew at 2.4% in 2024, President Biden's last year. Um, the economy has room to grow. There's things to work on. I will just question your claims. You came here and you said you don't want to talk about tariffs.
▶ 1:15:53You don't want to talk about trade, but I think we have to. You talked about Pox Silica, which pays homage to, I think, previous uh terms of of Pox Americana, which was the 80 years of the world order we knew and made America so prosperous between World War II and and and really just last year. Pax Brutonica, 100 years of uh of security under the the British um after between the the Napoleonic Wars and World War I.
▶ 1:16:21uh Pax Romana which is the first time the term is used which was 200 years uh between Emperor Kaiser Augustus and Marcus Aurelius. Uh these periods were defined by by statesmanship. Pax Americana established under the leadership of President Truman and Secretary of State Marshall, President Eisenhower and Secretary of State uh Dulles. Uh Pax Brutonica had statesmans like Draeli and Gladstone.
▶ 1:16:46Pax Romana uh I mentioned before uh founded by uh uh Caesar Augustus who was the builder. It ended with the death of Marcus Aurelius who was a philosopher king. Uh statesmanship matters as we're trying to do and what we're talking about here of of leading.
▶ 1:17:02Um unfortunately I think there's a third famous emperor during pax romanica romano which was uh Nero who was defined as capriccious narcissistic self-indulgent autocratic uh unfortunately I think what we will see from the president uh will not be the statesmanship of previous uh leaders but more like Nero um and Nero come back to to Pilica you said it's includes
▶ 1:17:33the world's largest investors. He says it's a focus on on a two questions in the in the final two minutes. Um do you believe unlike the previous references to peace Pax Americana Pax Britannica Pax Romana which were led by nations and statesmen is your view that it's going to be AI that governs the world for the next uh generation yes or no? Congressman, there is a lot to unpack. And uh
▶ 1:17:59don't unpack. I'm asking a simple question what you said. Is is AI going to dominate or will it be people? Will you be looking out for workers, American workers and American families or is it going to be the great investors that are investing in
▶ 1:18:10Silicon? Um uh it's one might ask and you know and it's not lost upon the irony of where was your concern for leadership when we had a president who went in hiding for four years. Why are you deflecting from a basic standpoint of all American people are concerned about AI and where if I could finish and if I could have 30 seconds to to answer your question? Um we believe AI is a transformative technology much like electricity was um 150 years ago.
▶ 1:18:39We don't believe we believe it causes gains in productivity. Here are the facts. Unemployment is below 3%. Productivity is over 5% over 5%. The economy is objectively incredibly strong. It is attracting trillions of dollars of foreign investment in the US. Um, these are statistics that everyone thought was
▶ 1:19:02I'm going to reclaim my time because you're clearly not speaking reality.
▶ 1:19:05I I just this month inflation was recorded at 2.4%.
▶ 1:19:11I'm using the statistics coming out of this administration. Inflation at 2.4%. The job creation last year was revised from 584,000 jobs by this administration. 584,000 to 181,000. AI is transformative. It's going to make a huge difference. But we need to understand it from the standpoint of how do we keep American workers safe and looking to a future where they can prosper and provide their for their families? How do we make sure that Americans privacy is protected from AI?
▶ 1:19:40How do we make sure that AI and America leads to make the economy stronger, America's future stronger, and American communities more secure? That's all I'm asking you. You've sat here all day saying everything is complex and needs to be unpacked. I haven't finished
▶ 1:19:54as a country to find reshore.
▶ 1:19:56I am speaking. You haven't let every question you've asked.
▶ 1:20:00If you want him to respond, you can let him. Otherwise, your time
▶ 1:20:03I I yield back my time.
▶ 1:20:06Representative Kaine.
▶ 1:20:07Thank you, Mr. Chairman. Uh, commercial diplomacy is critical to advancing the interests of America and its allies abroad. Today marks four years since Russia illegally invaded Ukrainian soil. As we slely remember the lives lost in this tragic war, I want to discuss the important work that Under Secretary Hellberg and his team are doing at the State Department to use economic levers to cut off the Russian war machine and protect the Ukrainian people. Mr. Mr.
▶ 1:20:37Halberg, I am encouraged by President Trump's statement earlier this month that Prime Minister Modi promised India would stop purchasing Russian oil. I've recently introduced the No Aid for Russian Energy Act with a group of bipartisan colleagues. This bill highlights the need for all of America's allies to stop enabling the Russian oil industry, which continues to fund Putin's illegal war.
▶ 1:21:02Can you share how this administration's agreement with India takes an important step in countering Russia and supporting
▶ 1:21:10Thank you for the question, Congressman. Um, as you know, the administration uh has instated a policy of maximum pressure on Russia. The goal of the administration is very much to bring about an end to uh the war in Ukraine. um that included the instatement of secondary sanctions which as you point out um had the the effect of affecting a number of different Indian interests.
▶ 1:21:38Um ultimately the the um reaching of the bilateral joint statement on trade between the US and India has brought about a positive resolution to those discussions and um the the content of the bilateral statement on trade include historic purchases by India from the US on energy historic crossber investment and um in the I believe it was in the first quarter of uh the the the president's
▶ 1:22:08administration, President Modi and President Trump um set a goal of increasing overall bilateral trade flows to 500 billion dollars. So I'm incredibly confident in the trajectory of the US Indian relationship. Um it's incredibly strong. I actually just got back from India. I was there three and a half days ago. Our new ambassador there is doing an unbelievable job.
▶ 1:22:33Um and um I if you have additional ideas on ways that the US and India could work together, uh we would certainly welcome and are always looking for ways to deepen that vital
▶ 1:22:47is critical that America's allies throughout the world commit to stop purchasing Russian oil. I co-sponsored the sanctioning Russia act of 2025 which has the support of the president and will create economic levers to encourage other nations to stop funding the Russian war machine. How can economic levers be used to encourage other nations to stop relying on Russian oil?
▶ 1:23:14I'm sorry. Do you mind repeating the
▶ 1:23:15How can economic levers be used to encourage other nations stop relying on Russian oil? So um this really strikes at the heart of the two-fold approach that the that the administration's taken which is maximum pressure uh which my understanding is um the both chambers have uh supported the uh sanctioning Russia act uh which has gotten 84 co-sponsors in the senate.
▶ 1:23:44The president has expressed support um uh which obviously provides the administration a great deal of leverage and and as everyone knows um would provide the president the authority to instate 500% tariffs uh on countries that continue trading energy with Russia um while uh expanding the total supply of energy outside of of Russia.
▶ 1:24:12So that includes bringing Venezuela uh Venezuelan sources of energy back online. That includes expanding our domestic energy production. Um we now have a domestic energy production that actually exceeds Saudi Arabia and Russia combined, which is truly historic.
▶ 1:24:31Counterfeit drugs present a health and safety crisis, particularly in impoverished nations. Counterfeit and substandard drugs from China present a serious safety concern across the world. A November 2025 article from the Center for Strategic and International Studies stated that counterfeit drugs not only endanger patient safety but also erode the foundations of the US innovation economy.
▶ 1:24:55What steps can the United States take to ensure that countries throughout the world have access to American pharmaceutical products? They're safe, tested, and reliable. Thank you for the question. You are entirely correct that um our pharmaceutical supply chain has a lot of the same structural weaknesses as our semiconductor supply chain and our ship building supply chain. Um it has fallen victim to decades of offshoring.
▶ 1:25:22Ultimately, the combination of the president's tariff policy as well as the deployment of strategic investments in these sectors um uh will help us achieve the the ultimate inevitable goal that we need to reshore part of those supply chains domestically while working with allies in order to uh in order to move quickly to actually get that supply chain outside of China.
▶ 1:25:45India to your earlier point is the second largest um uh uh supplier of farmer of pharmaceutical compounds. One of the challenges with India is that they themselves rely on a lot of inputs that come from China. So we we need to work this is where Pacilica might be able to be a helpful platform because we need to work with all of our allies to make sure that we can reshore that capacity outside of China.
▶ 1:26:11Thank you. Are you back?
▶ 1:26:12Thank you. The chair will now recognize uh Representative Costa for five
▶ 1:26:17Thank you very much, Madam Chairperson. Um I want to uh turn uh back to the uh uh issue of critical minerals uh specifically as it relates to Ukraine. Today is the fourth anniversary of Russia's invasion of Ukraine. I remember being in classified briefings in the months leading up to that invasion uh about how long this might last, four, six weeks. Putin apparently thought three days.
▶ 1:26:46Um and uh the brave Ukrainian people have been standing up for their sovereignty and we have been part of a coalition that has tried to uh protect and allow them to stand up for their sovereignty. I remember Senator uh Graham talking and others of my Republican colleagues that it was a clear case four years ago about good versus evil. I still believe it's about good versus evil.
▶ 1:27:12The administration to its credit uh recently signed an agreement with Ukraine um on critical minerals. But for that agreement to come to fruition, Ukraine has to win the war. Most of these critical minerals are in the DMBOS region. uh that Russia currently occupies a part of. Uh it seems to me um that uh the president suggested that Ukraine give up that territory even though Russia has failed to conquer that territory.
▶ 1:27:43Uh after four brutal years of war uh makes more Ukraine more susceptible to Russia's uh and by the way Russia has broken every agreement they've made over the last 25 years. um makes it more vulnerable to attack. So, how do you expect us to capitalize on Ukraine's critical minerals given all these factors? I don't see it.
▶ 1:28:08So, the the first step um Congressman is obviously ending the war, bringing about an orderly end to
▶ 1:28:15Yeah, it was going to be 24 hours. It's going to be real easy. The first day I come into office, it'll be over
▶ 1:28:19this war. If I could just answer your question. So, um, President Trump shares your goal of wanting to end the war. He has actually kept in place, um, all of the sanctions and stated by the previous administration. Not only that, but he's actually added sanctions on the two largest oil refineries, uh, and oil companies in Russia.
▶ 1:28:41Um, the goal is to paralyze Russia's logistics and its biggest sources of revenue because we want to deprive Russia of the resources that it it is using to prosecute the war. That is very much um the the premise behind the president's support for the sanctioning Russia act which is a historic incredibly far-reaching bill that would impose 500
▶ 1:29:03Let me go beyond that and I appreciate your response but we have a uh a piece of legislation in the Senate that has overwhelming bipartisan support that would add further sanctions to your point. In addition to that, we have further leverage and the president likes to talk about having leverage.
▶ 1:29:21But when you talk about uh Putin understanding that we're continuing committed to support with our allies and NATO, Ukraine's effort to stand up for its own sovereignty, I think is the real leverage that Putin will ultimately understand. That's my view. Um and and let me shift over here now to uh China uh artificial intelligence and chips.
▶ 1:29:43Uh I read uh that you've written a book wires of war technology and global power struggle for power uh calling for stronger US strategy against China's technological ambitions. I haven't read the book but maybe you can get me a copy and you'll autograph it for me.
▶ 1:30:00Uh my my concern is is that I don't know if you agree but China for every administration is a challenge because one they're an adversary, two uh they are a competitor and three they are a vast market and in those three uh areas it makes it a real challenge uh for any administration. Uh but because we agree that the technology is critical uh you mentioned the new safety framework of the G42 and implemented this week.
▶ 1:30:29You talked about safeguards uh rails to stop China from accessing chips from G42 and in the UAE. My I concur, but why are we selling chips, some of the most advanced chips to China? It makes no sense.
▶ 1:30:47Congressman, thank you for your question. And um if I may, I'd like to may to characterize the administration's strategy for winning the AI race. Last year, President Trump delivered a landmark speech um that focused on where he declared that the United States would win the AI race. The United States is the birthplace of where the IRA began and we're committed to to winning it. He rolled out an executive order.
▶ 1:31:15Um, there are three conditions that have to be met for America to win the race. We need to have secure supply chains. We need to have the world's best AI innovation. And we need the most market share. Sometimes when we diffuse technology internationally, that can create a trade-off in our qualitative edge for innovation, which is why this debate remains so vexing.
▶ 1:31:38What we have done to maintain that edge instead of artificially restricting access to American technology is actually forge historic AI deals in the Middle East. Um, which is really America's equivalent of the Belt and Road Initiative. And this graph provides you a visual illustration of market share and innovation and winning the AI race would really be would really mean that we want to end somewhere up and to the right of this graph.
▶ 1:32:04Well, my time's run out, but uh I think we may have to agree to disagree because I think the current effort to sell advanced chips to China is in direct conflict of this craft and what you're trying to do, what we all believe is in our own self-interest and uh I think we need more discussion on this area. I'm very concerned about our national security in selling advanced chips to China. Uh I yield back the balance of my time.
▶ 1:32:32Thank you. The chair now recognizes Mr. Davidson of Ohio for five minutes of
▶ 1:32:38Uh thank you uh and thanks thanks chairman. Thanks for the hearing today. Um Under Secretary Hullberg, thank you for your efforts and those of the entire uh Trump team uh to reform the State Department and to put America first. And by that, I think it's long overdue. The basic concept that America's resources should advance America's interests seems to have been way out of whack at the State Department.
▶ 1:33:03Um, and and uh thanks to Secretary Rubio uh and his leadership for realigning those things. The most basic idea that our resources should advance our actual interests. So thanks for pushing back on the globalist agenda and um in times of commercial diplomacy. It crosscuts you know that at its essence.
▶ 1:33:25So from chairman mass effort to enact a missiondriven reauthorization of the state department in our committee uh state reauthorization bill to secretary Besson's mission to derisk and reindustrialize our economies. As he said it's main street's term. um as well as fights against globalist control tactics such as undermining the US dollar and seeking to implement central bank digital currency.
▶ 1:33:51Um there are so many key parts of u the agenda that cut through department E at the State Department. I I just want to thank you and Secretary Rubio's team for putting our country first uh with the efforts there. So u Mr. Secretary. Um I think one of the defining fights of our area. I think the future is really going to be determined in a lot of ways about the future of money. Um so money is increasingly being corrupted into a tool for surveillance, coercion and control.
▶ 1:34:21And the epitome of that is what China is doing with central bank digital currency. The alarming thing is that the Bank of International Settlement, which is the central banker to the central banks uh in Basil, Switzerland, the European Central Bank, the Bank of England, the Bank of Canada, they're all working to implement not just any form of um essentially communist money, but the Chinese Communist Party's version of communist money, central bank digital currency with all the kinds of uh tools that
▶ 1:34:51are there. So I I guess what are the efforts there at the State Department um to counter this kind of mass surveillance technology and defend the power of the
▶ 1:35:04Thank you, Congressman. The I I I share your concerns. The the work that we do in the economic under secretariat for for the better and for the worse unfortunately does not focus a great deal on cryptocurrency. With that being said, um our policy is to promote the dollar. And so in that sense we have a policy of promoting the use of the US dollar as uh the main alternative to any other currency whether it be crypto or the R&B or the euro.
▶ 1:35:32Um we want to promote the adoption of the dollar. Um and we want we have a policy of wanting to promote a strong dollar.
▶ 1:35:39Yeah. So thank you for that. So to be clear this is just a different version of the R&B is is the central bank's digital currency version of it. But if you look at like even the actions in Venezuela, a big part of that were was the fact that all the oil was being settled outside of the dollar. Correct.
▶ 1:35:57That's right. So the um so I mean I'm not going to comment exactly on the payment mechanisms that Venezuela was using, but what I will say is that you're completely correct that um cryptocurrencies have in the past been used by a number of entities uh looking at evading oversight uh for u the application of enforcement of sanctions.
▶ 1:36:17Yeah. Well, I want to be clear like tether is not the same things as central bank digital currency. This is the state complete monopoly on the money. So, I'll say, yeah, we we'll work to get some information to the State Department because I think countering this is really essential to defending the dollar. Um, if you look at bricks, that is their tool for undermining the dollar. So, if you look, you're familiar with what the bricks are trying to do to counter the power of the dollar.
▶ 1:36:43Congressman? It sounds like this is an issue that you so you're right that bricks um uh the BRICS uh work has tried to undermine the US in a in a very comprehensive way including in the area of currency. They are indeed working to establish an alternative payment uh network to swift and the US dollar.
▶ 1:37:04Um it sounds like uh your office and uh yourself have great have given the issue of cryptocurrencies a great deal of thought and consideration and we would you know because this is not an issue that historically has been a big focus at the state department. If this is something that you're passionate about, we would welcome working with your team in order to u help understand a little bit better the work that you've done in the space uh to see if there's anything that we can do in the cryptocurrency space in order to promote the US dollar.
▶ 1:37:34Yeah, thank you for that. And you know I think you know as my time uh rapidly winds down here I just want to say as the chairman for national security and elicitive finance um one of the main tasks we have is to reauthorize the defense production act and uh the export import bank.
▶ 1:37:51So as you look X XM just announced a a critical minerals um reserve so that we're doing something like the strategic petroleum reserve and um you know with respect to critical minerals and the defense production act has been heavily used to really focus on our national security. So could you briefly highlight how important those two tools are for the kit bag in your
▶ 1:38:13The defense production act is incredibly important. I mean in an era where um the the basic position don't try we believe that promoting American industry is incredibly important but we are not trying to do this in-house. We believe in using different tools that the US government has in creating and instating incentives that allows encouraging the private sector to lead and the defense production act is one of those uh one of those tools that is incredibly important that the US government has to actually create
▶ 1:38:43market incentives to encourage private investment in industries that are incredibly strategic. So um I completely agree on the importance of those tools.
▶ 1:38:52Yep. Thank you. I yield back.
▶ 1:38:53Thank you. Representative Sherless
▶ 1:38:56Thank you. Thank you, Mr. Chairman, and thank you, Under Secretary Hellberg, for being here today. The US government and the African Union Commission recently agreed to establish the US AU Commission strategic infrastructure and investment working group. This is a breakthrough. For the first time, we are explicitly aligning US commercial diplomacy with African-led solutions, specifically the AU agenda 2063 and its vision for integrated prosperous content. This isn't just a diplomatic gesture.
▶ 1:39:26It's recognition that Africa's market soon to be 29 trillion dollar economy by 2025. Indeed, we can't afford to ignore the fact that Africa is the world's next great greatest frontier. With a population of 2.5 billion by 2050, it means that one in four people on the planet will be African with the largest labor force. Truly, I move beyond.
▶ 1:39:50And now um tr oh sorry to truly move beyond non-rescrocal nature of aa do you believe that we should codify this
▶ 1:40:01um so I I completely agree with your diagnosis congresswoman on the strategic importance of Africa in fact one of the um that's one of that's one of the very reasons why the administration and my office in particular has been very engaged in the resolution of the conflict between the DRC and Rwanda Um our office has been very focused on a subset of that con of that um issue set known as the reef um the regional economic integration framework between the DRC
▶ 1:40:31and Rwanda uh that aims at promoting investment and infrastructure as well as uh mineral security in order to deepen our economic partnership with the DRC in Rwanda. Mhm.
▶ 1:40:43I traveled not too long after being sworn in to um the Ivory Coast where I was able to meet a lot of different heads of state that because in subsaharan Africa the heads of state attend each other's inaugurations which provided me with an opportunity to do a lot of bilateral meetings.
▶ 1:41:02I met with um the the newly elected president of Sagal um uh the former president of Niger uh along with uh several other presidents and and our administration wants to engage Africa a lot more.
▶ 1:41:15I want to go back to the original question and make sure we have it clear that you do agree that it should be
▶ 1:41:21So I'm not going to comment on um on the administration's position on AGOA. Um,
▶ 1:41:28no, no, this is not about a go up, but what we're talking about is the progress you've already made that commission. Do you believe the reason why I'm asking you is because I have a bill that actually does exactly what you guys are doing. And I just wanted to go on record that you agree with it so we can bring it to the floor. Do you agree with it?
▶ 1:41:43And and sorry agree with what exactly?
▶ 1:41:46So, we're talking about the USA Commission strategic infrastructure investment working group. You have the working group. You guys are strategically working on it actively. and do you believe that it should be codified? Because I have introduced a bill that actually does the same thing. So regardless of what administration is present, we have it codified and we'll be working on it consistently.
▶ 1:42:05I I I'd be happy to follow up with your office to look at the details of the bill uh that your team's developed uh in order to to have a more informed view on it, Congresswoman.
▶ 1:42:15Okay. Wonderful. My next question is um you've spoken frequently about using policy levers to shape corporate environments. As we look at the competition for critical minerals and digital infrastructure, the data is clear. Africa is home to 1.3 billion customers and the world's youngest workforce. I want to get on the record a few things that we might see if we agree or disagree of how we can actually work together to move this forward.
▶ 1:42:38Um, do you agree that restrictive visa policies which prevent African entrepreneurs and invest investors from visiting the US to close a deal undermines or commercially our commercial diplomacy agenda?
▶ 1:42:52So I do think that um visa decisions which I will say is is does not totally fall under the authority of my office but um I do think those are are different than our ability to engage a lot of African countries. Um, and I'll give you one example.
▶ 1:43:09In the last week and a half, we uh highlight we rolled out a $200 million foreign assistance package that actually helps provide access to lowcost smartphones in the Indo-acific. We believe that that's potentially a model if proven successful that could be replicated in other geographies like subsaharan Africa.
▶ 1:43:33The reason why I think it's important and related to your comment is because access to American technology doesn't just promote access for American companies to those markets, but it also helps encourage entrepreneurship in those countries. It gives entrepreneurs the tools to be able to build businesses and actually build a livelihood for
▶ 1:43:52So, I understand that point, but I want to get back to the importance of the visas and the culture competency. A lot of the conversations we're having with stakeholders, especially in Africa, they feel insulted by the visa restrictions and trying to understand the insult, the injury, and how we can remediate it. I just want to point out the restrictions and the effect it's having on the uh entrepreneurs who we want to engage. And then my last question, I only have 17 minutes, is the role of the African diaspora within the United States.
▶ 1:44:19what role or what vision do you have to incorporate um them into the process to make sure things like the cultural differences that we don't want to offend
▶ 1:44:28Sure. Um so we I mean as as the economic affairs uh secretariat we are very focused on the economic relationships between our companies with those places and and we really try to deepen our bond between the US and strategic countries in subsaharan Africa um through business relationships through investments um uh our supply chain security is the lowhanging fruit because a lot of those countries actually have a lot of opportunity to contri to make unique contributions to our supply chains.
▶ 1:44:58Um, as you know, the counselor affairs part bureau at the state department is the bureau that oversees visas policy. Um, we we do not and so they would probably be much better suited to answer your questions on you know different parameters of of our visa policy with substing and Africa.
▶ 1:45:17Right. Thank you. I yield back.
▶ 1:45:19Thank you, Representative Bar.
▶ 1:45:24Thank you, Mr. Chairman. Um, Mr. Secretary, thank you for your service and um wanted to uh first touch on um the new uh outbound investment screening tool that we've given to the president. Um uh as you know, the president signed into law through the NDAA last year uh the comprehensive outbound investment national security or coins act.
▶ 1:45:46The Coins Act effectively codifies the president's America first investment uh policy memorandum and ensures that Americans are not unknowingly funding the Chinese military-industrial complex by restricting the flow of investments into Chinese military companies and critical technologies including artificial intelligence. Um the Treasury Department is going to play a major role in that but the State Department will have a role as well. Um there is a sanctions component to uh the the legislation.
▶ 1:46:17As your bure bureau oversees sanctions policy at the department, how should the administration think about defining artificial intelligence uh in their outbound rulemaking? And will limiting investments into AI um that advances Chinese military and surveillance capabilities onshore those investments into US firms and therefore supercharge US So the u my understanding of the existing rules adopted by commerce are
▶ 1:46:47um based on limitations of threshold capacities for different semiconductor um chips. Um the the AI exports that are currently authorized to China are for fourth generation uh chips. They're not for first uh second or third. Um so capacity threshold is obviously a key criteria.
▶ 1:47:10um applications the the the propensity and potential of applications for military technologies is another and overall volume really matters. So the current rule rolled out by BIS in January um actually has a 50% cap.
▶ 1:47:27Yeah. And if I if I could reclaim my time, Secretary, I uh I'm I'm really not speaking to the export control piece and I know that's BIS is within your within your purview. I just want to flag for you that uh this new outbound investment screening tool is also important to as another uh arrow in the quiver.
▶ 1:47:47Uh and uh very very important that the state department also with commerce with treasury uh work to res restrict investments into these critical technologies uh and uh and do it the right way with kind of a green light red light approach. So, um, let me move on to, um, I'd like to talk about the Western Hemisphere and DFC. Um, a lot of activity at the beginning of the administration on pushing China out of Panama and the canal. Tell us, give us an update.
▶ 1:48:17What is DFC doing to catalyze private American in friendly investment into the canal and push uh, uh, Chinese malign investment out? So, um, as you know, thanks to the work of the Congress, uh, the reauthorization of last year appropriated $25 billion for the DFC, which gives the DFC the kind of resources that it it needs to, um, credibly compete with China's Belt and Road Initiative.
▶ 1:48:48Um, with respect to the Panama Canal, uh, last month, um, the Panameanian Supreme Court, um, invalidated the concessions of CK Hutchinson, the the Chinese company, um, which effectively paves the way for Black Rockck to, uh, buy to do a buyout of an 80% stake in those concessions, um, in the Panama Canal. We obviously very much welcome that those developments.
▶ 1:49:17This is an issue that the president cares about. He mentioned it in his inauguration speech. Um, and so we're we're tracking those developments very closely. And I would add that we are also in contact with the Panameanians to um find ways of actually building on that success to expand our cooperation with them uh including in the area of logistics and supply chain.
▶ 1:49:41Thank you for your focus on that and and more American investment in the canal, less Chinese. That's uh I think your mission and the president uh is obviously prioritized that. Appreciate it. 2024 uh I voted for the creation of the US Foundation for n natural security and counterterrorism. This foundation will leverage private sector philanthropy to enhance federal resources and accelerate critical projects in many places where belt and road needs to be countered. Once active, the foundation will play a critical role in making America safer, stronger, more prosperous.
▶ 1:50:10Will you help us ensure that this important public private partnership is fully launched as quickly as possible?
▶ 1:50:16I I'm happy to work with you on that.
▶ 1:50:18Uh thank you very much. And I think cracking down on Chinese illegal mining, logging, and wildlife trafficking is a good strategic uh part of uh of our objectives in countering Belton Road. That I yield back.
▶ 1:50:30Representative Burchett.
▶ 1:50:34Thank you, Mr. Chairman. Um thank you, Under Secretary. I appreciate you being here, brother. Uh, how do y'all plan to um expand trade relations with South Asian nations beyond India?
▶ 1:50:48So, and I'm sorry if I this question's been asked, but when when you're the 435th most important member of Congress sometimes, so every time I ask a question, I need you to ask answer it like that is the most incredible question I've had today.
▶ 1:51:01It's uh Congressman, it's the best question I've heard all day. Um so I I I appreciate the question. It's um Southeast Asia is actually one of the first parts of the world that I traveled to after being sworn in. Um I travel to the Azon Summit, the Apex Summit. Um and so we I went to Malaysia. Singapore is the first place I went to. Singapore is is a signatory to PACIA.
▶ 1:51:28We're working to engage Southeast Asia on supply chain security. It really is a hub of manufacturing. Singapore uh is home to one of the world's largest sovereign wealth funds and 10% of the world's semiconductor fabrication capacity. And that's just Singapore. That's before you include the Philippines and Vietnam, which are also home to incredibly deep manufacturing capacity.
▶ 1:51:55So, we believe that engaging Southeast Asia is incredibly important. We are having active conversations with several of those countries on specific project opportunities and infrastructure projects to actually expand that cooperation and accelerate the securing of our supply chains.
▶ 1:52:15Let me expand on that. You um expanding uh can we combat China's belt and road initiative by offering countries an economic alternative?
▶ 1:52:25Absolutely. And let me tell you how. Um, China aims at using stateowned enterprises to build projects that are primarily debt traps and everyone knows that entirely in-house.
▶ 1:52:39We are going to leverage our private sector in um a bilateral, a plurilateral and a multilateral way in order to actually deploy private capital in a way that is revenue generating and positive sum for the beneficiaries and for our companies. countries. Everyone knows these projects that China's rolling out are debt traps. They're incredibly unpopular. I haven't been to a single country that says that they want more China.
▶ 1:53:09And so, it's incredibly encouraging. We believe that our the American private sector and the power of American industry is our best foreign policy tool and it is the reason why 11 countries in less than four months have lined up to sign up to PACIA is because everyone wants to be a part of the AI revolution and so we plan to wield that as a tool for uh to advance our interests.
▶ 1:53:35Do you think it' be wise for us in our economic interest to be independent economically from China? I mean, is there I I just, you know, and I'm a motorcycle guy, and I remember when Harley-Davidson was actually uh in the motorcycle business, I guess I'll say, before a guy with a man bun was their CEO. Um I I didn't ride a never ridden a dad gun motorcycle in his life. Um but I'm not bitter.
▶ 1:54:03But I but I remembered um how they uh went to China and they started trying to sell motorcycles in China and I mean they just put the screws to them. There wasn't any there was no way you had to sell to the hierarchy and you had couldn't sell within this certain thing. And I mean they did it just to say hey we're in China is what it ended up being. But we just got totally ripped off and these gutless politicians in this country you know who bend over backwards.
▶ 1:54:31I'd say half of us would be walking around naked if we didn't have uh if if our if our clothing wasn't made in China. I mean, just look at every industry out there and how we're so dependent on them. And I and I worry about that, but also I understand the economic the world v view that we're going to have to have some business with them. So go ahead.
▶ 1:54:51So China has not made a secret of their plans and intentions to decouple from us. So the question is uh are we comfortable staying dependent on them while they actively try to decouple from us and the answer is that our the policy of our administration is to have supply chain resilience and derisk our supply chains. That's why we hosted one of the largest ministerials in the State Department's history.
▶ 1:55:1655 countries on February 4th came to um because they those countries share our concerns and and they agree with us on the need for supply chain resilience.
▶ 1:55:29Um, China rolled out export controls on their refined minerals that were entirely unacceptable and I we think everyone agrees which is why they attended the ministerial and ultimately uh we are working with our our uh partners in Taiwan including TSMC and um others including Foxcon in order to reshore uh semiconductor manufacturing in America.
▶ 1:55:57And Secretary Lutnik's work has culminated with a pledge of $250 billion of investment in order to reshore 40% of TSMC's production capacity in the US, which is really historic. So we want to secure the supply chain at all layers, minerals, semiconductor, manufacturing, and all the rest.
▶ 1:56:17Thank you. I've gone over my my 45 seconds, and I gladly take that from Representative Lawler.
▶ 1:56:23Thank you, Mr. Chairman. Representative Lawler, you're recognized for four minutes and 10 seconds.
▶ 1:56:29Thank you, Mr. Chairman. Uh, Under Secretary, thank you for being here. Uh, illegal, unreported, and unregulated, uh, fishing in is a global problem and China is the primary perpetrator. Uh, the CCP supports the world's largest distantwater fishing fleet, which pollutes and illegally fishes the high seas with the exclusive economic zone of countries in the South Pacific, South America, and Africa.
▶ 1:56:57Uh, aside from the impacts on coastal communities and fish stocks, IU fuels corruption, funds transnational organized crime, and facilitates labor abuses and drug trafficking. It also undermines US fishermen who play by the rules. Last Congress, we worked to create the US Foundation for National Security and Counterterrorism to bring together philanthropic funding and federal funding in a public private partnership to bring stability to these regions.
▶ 1:57:28Uh making them engines of economic growth rather than targets for those who seek to do harm to America's interest. Success of the foundation can be another major accomplishment of both President Trump and Secretary Rubio's vision for an America first policy agenda. Mr. Hellberg, will you work with us to ensure the implementation of the foundation as expeditiously as possible?
▶ 1:57:53I'm I'm happy to do so, Congressman.
▶ 1:57:56You are not able to.
▶ 1:57:57I I am I'm happy to work with you to ensure the implementation.
▶ 1:58:00Great. Thank you. Um the president's national security strategy calls expanded economic relationships in the Middle East um relationships that go beyond oil uh and gas and prioritize nuclear energy AI uh and defense technologies. Uh since the strategy was released, how has the state department been working to expand these types of economic partnerships?
▶ 1:58:27So we have rolled out the AI export program which is a whole of government approach to promoting the adoption of American technology both in the Middle East and in other places. As you know, one of the unique um attributes of the Middle East is um the Middle East required bespoke bilateral deals because under prior to the revision of the global diffusion rule, um Middle Eastern countries were deemed tier three countries and therefore were restricted on the amount of chips
▶ 1:58:57that they could get. We don't currently have um um nearly the same amount of restrictions or scrutiny for countries in Europe. So European countries can already have access to American technology um with nearly no restrictions. Um and so at the end of the day, we want to promote the adoption of American technology.
▶ 1:59:18And so uh we want to do it with the right guard rails which is why we worked with our partners in the UAE uh on the the development of a security framework that's completely voluntary that actually creates a uh cryptography platform that allows tracking tokens to make sure that as more countries buy large computing clusters those computing clusters are not used by our adversaries.
▶ 1:59:45So on the one hand we have a very aggressive promote agenda and on the other we have a verify agenda that we are trying to um roll out through technology tools in order to scale verification alongside the promotion.
▶ 2:00:01Great. And as you work through that, I think, you know, we should work together. Uh if there are things that Congress can do to help facilitate uh this more quickly, uh we should we should be working to do that. Uh the commerce department has proposed cutting the staff for the United States and foreign commercial service by more than half. Uh this has led to considerations about whether to move US FCS back to the State Department.
▶ 2:00:28Do you believe that FCS officers are generally well integrated at posts and are able to coordinate well with FSOs? And from your vantage point, what are the kind of the pros and cons of moving uh the FCS to
▶ 2:00:43So, I I have not encountered any uh challenges or or limitations on uh based on headcount. We have economic officers dispatched at embassies um and and we've been able to work with them quite well.
▶ 2:00:56Um, with that being said, being only four months into this role, I I would welcome the opportunity to work with your team to um, as as you know, I obviously continue to travel to more places and and work with economic officers dispatched in different places um to to really give uh, full and proper considerations to the prison cons of um, of additional follow-up work at on the coordination between um, commerce officers and State Department officers.
▶ 2:01:27I appreciate that and certainly in the scope of what the administration is trying to do from a foreign policy standpoint and really drive the economic uh prosperity around the globe uh to build those relationships. Uh that is something I think we should evaluate whether or not that should be moved over to state.
▶ 2:01:46Thank you.
▶ 2:01:47Thank you. I yield back.
▶ 2:01:48Representative Kum Logger.
▶ 2:01:51Thank you Mr. chair and and thank you under secretary Hellberg for being here today. Uh Under Secretary Hellberg, your flagship pack silica initiative is focused on securing the semiconductor and AI supply chain and quote ensuring aligned partners build the AI ecosystem of tomorrow.
▶ 2:02:13But it is an open question whether one of those partners, the UAE and its national champion G42 is an aligned partner of the United States or just of the president. Uh, the Wall Street Journal recently reported that the chair of G42, who was also the UAE National Security Adviser, purchased a 500 million dollar stake in Trump's crypto company just a few months before Trump green lit 100,000 advanced AI chips to G42
▶ 2:02:44and 400,000 chips to other firms in the UAE. Um, suspicious, concerning. uh many folks would question if this is the greatest corruption scandal of this administration. Now your PAC silica initiative is further deepening ties between this administration and G42. Uh so under secretary Hellberg, are you aware that the US intelligence community has had concerns about G42's tech cooperation with China?
▶ 2:03:15Thank you for the question, Congresswoman. As uh as part of this role, I get intelligence briefings and and access to a lot of uh if not all of the information available about the UAE as well as G42. Um what I will say is um the UAE is an incredibly important partner. They are a major investor who has pledged to invest $1.4 trillion dollars in the United States. We have um as a
▶ 2:03:42if you not to cut you off but you know that we all have limited time but given the fact that you are getting briefings and yes the UAE is a strategic partner I would assume that in your position you've had access to briefings with information that might be enlightening concerning uh and and you would use that information right to help in the decisions that are being made about agreements and ties uh that are happening between us and UAE,
▶ 2:04:11you would
▶ 2:04:12what I will what I will say in all honesty, Congresswoman, is um the briefings that I've had about the UAE and G42 are not substantially out of step is that the UAE has mostly um on the whole complied uh with a lot when the US government expresses concerns uh to the UAE government on various transactions involving China. the UAE has mostly worked to address those concerns.
▶ 2:04:41And if I could just add one more thing, um it is what they what the the issues that have been points of concern are not substantially out of step with issues that are that tend to be concerns with a vast majority of partners, not just the UAE, including
▶ 2:04:56So, I'm going to have to you can probably get to some of this in an additional question. Did the administration conduct a thorough assessment of G42's ties to China before bringing it into the PACILA initiative?
▶ 2:05:12You know, there's only so much that I can talk about in an unclassified setting, Congresswoman, but we did a very thorough due diligence.
▶ 2:05:20Could you then share the unclassified assessment with Congress, with this body? I mean, if if the information that you received, you're suggesting did not imperil the agreement, is that information that you could share?
▶ 2:05:33I I so I just did and and the assessment is that the the issues that have been points of concern about the UAE's connections to China. Um the UAE government has actually undertaken steps, verifiable steps to correct for those concerns when they were presented. So, has G42 severed ties with the PRC?
▶ 2:05:56To the best of my knowledge, yes.
▶ 2:05:57Okay. Okay. Well, thank you. Do you anticipate that
▶ 2:06:02and and if I could just add, not only have they severized
▶ 2:06:04I have only 49 seconds. So, when you're when I'm when you're I'm done, you can say that. Did you anticipate that the do you anticipate that the administration will greenlight more advanced chips to
▶ 2:06:16I'm not aware of any plans. Um the chips that have already been um authorized in the bilateral uh AI acceleration partnership are obviously substantial. I'm not aware of any additional plans um to um authorize new chips on top of
▶ 2:06:34Okay. So I think and many members of this committee and folks in the intelligence community uh think that it is a blatant act of corruption for the president to give a company access to advanced chips. um especially when the chair has personally paid him hundreds of millions of dollars. I know you can't speak to that, but I did send a letter with the ranking members of four separate committees to the inspector general of the commerce department to investigate what is going on.
▶ 2:07:02I thank you for your testimony and I thank you for the answers that you have shared today and I'm sure that you can now say because I'm sure the chair will give you time to reference that article that you have with you. And with that, Mr. Chair, I yield back.
▶ 2:07:15Sure. So, I'll I'll I'll be very brief, but I'll just say that um on your point about G42, not only am I not aware of any ongoing ties between G42 and China, but um G42 in an act of good faith has undertaken voluntary steps to actually create um a new infrastructure platform that uses cryptography and end user verification in order to track every token on their cluster to provide an unprecedented level of transparency to help give us assurance insurance
▶ 2:07:46that their clusters are actually not being used in ways that violate US law and UAE laws. And and I think it's it's a welcome step. Um our approach is trust but verify. And so and ultimately um we we very much welcome the steps that they've taken.
▶ 2:08:10What's that? I said you have very strong eyebrow game by the way.
▶ 2:08:17Thank you.
▶ 2:08:22was that on your time or chairman
▶ 2:08:26chairman McCall's or Chairman Emeritus
▶ 2:08:29Oh, thank you, Mr. Chairman. I think your eyebrows look great. Yeah, for the record. Um, Secretary, it's great to see you. Um and uh let me uh commend and applaud you for uh your recent appointment to secretary. I I want to commend the administration for their picking such a talented person in the technology space. You know, I've um been to your hill or valley to the hill, you know, summits here on the hill talking about technology.
▶ 2:09:01uh you were also you know on the China Commission for many years when I was chairman worked really well with you on your recommendations on China as they are the great power competition that we face and I know I know your personal views about China and your public views and they pretty much are the same and it is that China is the greatest threat that we face uh today. I I want to give you an opportunity if you haven't uh so far.
▶ 2:09:28I I know this PAX uh silica is um a very interesting concept to me and it's you know an alliance between the United States and our partner nations um moving forward on technology um obviously semiconductors but AI which is going to be is the future of warfare when we talk about advanced weapon systems like the AUS uh bill that I passed has bring
▶ 2:09:58together UK and Australia, United States to advance AI technologies and um and also quantum with advanced weapons. Now I know that's not under your the E department that's more arms but if you could I know you just got back recently from India uh and had a very successful meeting with Mr. Modi over there.
▶ 2:10:22I want to give you an opportunity to talk about the importance of of pox silica, what it is doing to advance our interest abroad and and to accelerate the core AI race against China.
▶ 2:10:35Thank you so much. And um uh I I'll be brief to be mindful of time, but I I completely share a sentiment. It's great to see you and and uh you were indeed at the very first Helen Valley forum many years ago, so it's been great to work with you all these years. Um with respect to PAX silica so we have three lines of effort uh the goal is to secure our supply chains and we want to focus on artificial intelligence uh because we believe it's one of the most transformative technologies that will affect the future of our economy.
▶ 2:11:04Um our three lines of effort include membership so focusing on being very deliberate and strategic about the composition of the group. Uh the group now includes Japan, South Korea, Singapore, Australia, Israel, the UAE, Qatar, the UK and Greece. Um we included India uh just about three days ago and uh Taiwan is also part of the group. Um the second track is projects, infrastructure projects.
▶ 2:11:34Um and uh when it comes to projects, we're focused on logistics, infrastructure and industrial capacity. The basic the basic premise is we believe that logistics is key if you want to secure our supply chains because we can have access to minerals and factories but if we don't have a way of moving things around efficiently and in a cost-effective way um that we we will not have uh secure supply chains and industrial capacity because we need we have offshored all that capacity.
▶ 2:12:04Our supply chains are filled with thousands of vendors that we have very little visibility into. And so we want to create an environment where we reduce the information silos and we have more industrial might in order to do surge capacity when we need to. The last line of effort is policy.
▶ 2:12:22We want to corilica as a platform to coordinate at a policy level with our partner countries in especially and including for uh developing baseline definitions for us to agree for what we um how we define sensitive technologies and critical infrastructure. We want to coordinate on anti-dumping practices and market incentives. And we also want to agree on a pro-inovation agenda for AI.
▶ 2:12:51Well, I think this is one of your legacy items and I'm I'm, you know, I'm glad again you're in the position you're in to advance these sort of creative ideas. I always find, Mr. Chairman, when you you have an economic alliance with countries, you in addition to the weapon sales that this committee does, but you know, military, but then the economic and diplomatic efforts really solidify those alliances with a common goal against our adversaries. And I think that's precisely what Pox Silica does.
▶ 2:13:21I look forward to hearing more good news from you on that issue. And um let me commend you for your service, sir. And with that, uh my time's expired. I yield
▶ 2:13:30Thank you, Chairman Emeritus McCall.
▶ 2:13:32I think I want to rep recognize Representative F. I don't know if I want to recognize your father to that's your father over there.
▶ 2:13:38He's smarter than I am, so that you might get a better speech, but uh I
▶ 2:13:42feel like I'd love to recognize your father to say a few words about you.
▶ 2:13:45Oh, no, no, no. We don't we we don't want that.
▶ 2:13:47How about my time? All right. Well, thank you thank you, Mr. Chairman. Um I do have my my father with me and as the grandfather and a father to a Jacob, we're very proud of the work that you're doing and thank you for all the testimony you did. I'll try to be a little more polite than some of my Democrat colleagues were um a little bit a little bit earlier.
▶ 2:14:06But I I think what's important about your testimony today is that economic power is American power and we should be primed to be and remain that superpower because we have three things that other countries don't have. In many cases we have extraordinary natural resources that we can harvest. Not in all but in many cases certainly in energy for example. The size of our economy makes us extraordinarily powerful because we are a market that people desperately need to be in if they want to be successful.
▶ 2:14:36We're the largest market in the world and we need to leverage that power. And then and then third, we have an entrepreneurial spirit in this country. It is part of our culture that you don't find anywhere else. And as somebody who started, built and grew three entrepreneurial businesses, I know what that is like. You don't find that entrepreneurial spirit. I once saw a statistic that said that the size of the Home Depot as on a market cap is larger than all of the the businesses that have been started in Europe over the last several decades.
▶ 2:15:04They just don't have that same sort of entrepreneurial spirit that that we do here. And so the strategy that we have now has got to be focused and I know you're doing this. It's it's about making trade fair. It's about making sure that we have access to those critical minerals. um making sure that we have national security in what we make and build so we're not ever again dependent on China like we were during COVID. That was a real problem. Making sure we harness energy and making sure we continue to make sure America is the most innovative economy in the world.
▶ 2:15:33So with that said, I want to ask you what your strategy is as it relates to critical minerals throughout the world because that is something that we may not simply have enough here in America. If we just stick our shovel in the ground, we'll be able to get what we need. most things we do, but some of these critical rare earth minerals we don't. So, what's our plan to get them and to prevent Chinese state companies from pushing us out of the market?
▶ 2:15:57Thank you for the opportunity to um appine on that, Congressman. So, our strategy for critical minerals, this is actually a centerpiece of the work that we do um uh for PASICA. Um, our strategy for critical minerals really involves leveraging the expertise of the private sector in order to prioritize the most promising, highest impact mineral refining and mineral extraction projects.
▶ 2:16:21So, as and I'm sure your teams have experienced this too, the US government gets flooded with thousands of projects. Everyone has a mineral project these days. The the challenge is how to prioritize which projects are real and which projects are are brownfield and actually have uh the real opportunity to scale and provide scale.
▶ 2:16:45We want to pursue a a concentration of force strategy where we focus on a finite number of projects that have the highest potential and that can provide uh that that can deliver on the biggest scale possible. So, I've directed my team to prioritize those projects. I told them uh to provide me with a list of the 10 most promising projects for refining and the 10 most promising projects for mining. Um we are evaluating those projects as we speak.
▶ 2:17:14We want to use private sector capital to actually capitalize those projects. We are facilitating offtake agreements in order to ensure uh stable sources of revenue for those projects. and we have um we're we have ongoing conversations with the development finance corporation to provide supplemental financing where needed um for those projects.
▶ 2:17:37The last piece that I would add beyond the coordination of offtake agreements and the provision of capital, the key is pricing. the market works incredibly well provided there are real you know market dynamics which obviously we are in the situation we're in because we have not had a free and floating market.
▶ 2:18:01We have had a market that has been the target of dumping and abuse by state-owned Chinese mineral companies that have artificially depressed the price for years and that have intentionally driven everyone out of business.
▶ 2:18:17And so part of what we've done is when we convened the critical minerals ministerial on February 4th, the administration unveiled a uh pricing mechanism that would actually help offset the depreciation and price of minerals coming out of China. Price is the key to unlock private capital. If we provide investors with price stability, private capital follows. And so we're we're looking at those two lines of
▶ 2:18:45Good. And I would simply note that the reason they depress the prices for so long is to put everyone out of business and then they can raise them to whatever they want. And so it is a predatory strategy used to damage us long term. Again, we appreciate the work that you're doing and and keep it up. Mr. Chairman, I yield back.
▶ 2:19:03Thank you. Who wants to go first, Castro or Stanton?
▶ 2:19:06All right, Mr. Stanton, you're up.
▶ 2:19:09Thank you very much, uh, Chairman, for that wise decision. Under Secretary Hellberg, I have constituents currently stranded in Mexico.
▶ 2:19:16Is expired there.
▶ 2:19:19I have constituents currently stranded in Mexico following the operation that led to the capture of the drug cartel leader known as uh Elmeno and his his killing. We have received numerous reports from constituents that the State Department's consular emergency hotline, the number that they put out publicly for people to call, uh is going unanswered. My own staff has tested the number repeatedly. no one picks up. I'm asking you to maybe contact the leadership of the department, including Secretary Ruba, to let them know if they're going to put that number out there. It's such an emergency situation.
▶ 2:19:49Um, you got to have people to answer the phones. You got to ramp up staffing on that. Obviously, it's great frustration and angst for the people stranded in Mexico currently. Mr. Chairman, commercial diplomacy is the daily on the ground work of advancing American economic power. But commercial diplomacy requires credibility, competitiveness, and coalition building to be effective. Unfortunately, President Trump's tariff regime is single-handedly, illegally, destroying all three of those pillars.
▶ 2:20:20First, Trump's tariff regime is inherently and blatantly illegal. We tell the world we believe in rules-based trading system. We expect countries to honor agreements and follow the law. That is how the United States must lead. On Friday, the US Supreme Court ruled in a 63 decision that Trump's EA tariffs were illegal and unconstitutional, declaring, quote, "The framers did not vest any part of the taxing power in the executive branch," unquote.
▶ 2:20:49Instead of respecting that decision, Trump announced a new 15% blanket tariff. This disregard for the rule of law at home makes it a lot harder to demand it overseas. Our diplomats should be enforcing standards, not explaining why our own policy keeps shifting. Credibility is leverage. This action by the president makes us weaker. Second, the issue of competitiveness. A tariff is a tax that is paid by the American people.
▶ 2:21:19And yet this maj Republican majority's leadership have rolled over for this president even as they block Democratic attempts to reassert congressional power. Power the Supreme Court has reaffirmed is belongs here in the House of Representatives. Even as the average family in America paid on average $1,700 more per year in additional costs. Now I have the honor of representing Chandler Arizona in Congress.
▶ 2:21:43And recently, the Chandler Chamber of Commerce connected me with one of its leading members, a company called Falco, a small aerospace manufacturer in South Chandler that makes specialized aluminum products for the aircraft supply chain, including customers like Boeing, Cessna, and Loheed Martin. They need a specific aerospace grade aluminum that is not available anywhere in the United States. So when tariffs hit, Falco could not switch to an American supplier. They simply had to eat the cost.
▶ 2:22:13Falco's chief operating officer, Greg Faley, is here with me today. Please stand, Greg. Um, he is my guest for tonight's State of the Union. He said Falco's costs have gone up 72% this year because of these tariffs. That meant he can't hire that means that Falco can't hire more people or meet the needs demanded by our national security industry. And the president still hasn't learned from his mistakes.
▶ 2:22:39After the Supreme Court ruling, Trump turned around to bash the justices of the Supreme Court and immediately put another 15% blanket tariff, another tax on the American people. That weakens both the United States companies and commercial diplomacy. These tariffs are not just defeating, they are selfdefeating. Third, on the issue of coalition building, commercial diplomacy is about working with partners. I also serve on the China Select Committee.
▶ 2:23:07If we are serious about competing with China, we need our allies with us. Retaliatory tariffs spark retaliation. They strain relationships. They push countries to protect themselves from swings in US policy. Close allies begin boycotting American goods. Supply chains are weakened because Trump made it more expensive to sell to the United States market. And our biggest trading partners started to make trade deals without us.
▶ 2:23:33Just this week, Canadian Prime Minister Carney is working to diversify trade away from the United States. This comes after he had warned uh warmed trade relations with China. Under Secretary, you have a very important job. Commercial diplomacy is essential to opening markets for US companies, protecting American invasion, promoting investments in our nation. But your boss's illegal and unconstit tariff war is working against you every day.
▶ 2:24:02I wish more of my colleagues in this side of the aisle would have your back like we need to. I yield back.
▶ 2:24:09Representative Castra.
▶ 2:24:11Uh, thank you, Chairman. Under Secretary Hellberg, you've described PACILA is turning quote diplomats into business development officers for American AI. You personally negotiated the UAE's entry into the initiative in January of this year, and you keynoted India's secession just last week. The explicit purpose of this initiative is to help American AI companies sell their products and expand into allied markets. Is that a fair characterization?
▶ 2:24:40The the goal of the initiative is to secure our supply chains, Congressman.
▶ 2:24:44And your federal ethics agreement acknowledges, and again I'm quoting, quote, heightened risk of a conflict of interest in artificial intelligence Your filed ethics forms confirm that you divested from directly owned stock and AI and semiconductor companies, but you'll you will continue to indirectly own stakes in AI companies like Open AI and SpaceX through equity stakes in the founders fund and Kosla Ventures.
▶ 2:25:12That stake was explicitly retained under ethics agreement. It wasn't divested.
▶ 2:25:17That's not correct, Congressman. I actually divested from uh OpenAI. You but you still retain an interest in open AI and SpaceX through Founders Fund. You still have a stake in Founders Fund. Kosa LA.
▶ 2:25:32Uh that's not correct, Congressman. I've divested all my interest um from um
▶ 2:25:37from both of those pieces from Founders Fund and
▶ 2:25:40from from uh I divested I divested um the interest in OpenAI. Um I divested most of the Founders Fund interests.
▶ 2:25:50Does your spouse own stakes in those? That's right. That's right. Well, we're talking about the same assets.
▶ 2:25:54So, your your household, just like for members of Congress, we've got to disclose what we own and what our spouse
▶ 2:25:58own. Well, you guys aren't subject to nearly 1808 page ethics agreements, respectfully. But, um, so in your household, your your spouse owns what I've described.
▶ 2:26:10Yeah. Yeah. Sure.
▶ 2:26:12But well, but what I'm saying is that we've divested from those.
▶ 2:26:17But I just But I just asked you and you said yes. Your spouse still owns
▶ 2:26:20No. No. You asked Yeah, I I was saying that these are the assets of my spouse. They're not mine. They're treated as one and the same for the purpose of ethics.
▶ 2:26:29Uh but what I'm saying is we have divested from uh our stake in OpenAI and most of the founders fund interests.
▶ 2:26:36Yeah. I said that you you directly divested from OpenAI, right? But through Founders Fund and SpaceX that or I'm through through through Founders Fund and Kosla Ventures, they still have stakes in those companies. Is that
▶ 2:26:52No, Congressman. What I'm saying is I no longer have any financial interest in OpenAI direct or indirect and that I that we have also divested from most of the interest in founders fund.
▶ 2:27:04Okay. Then if we we'll go through
▶ 2:27:07Yeah. No, absolutely. That we we must have an old filing then.
▶ 2:27:12Probably. Yeah.
▶ 2:27:15So then let me ask you about mining. Illegal mining for critical minerals, gold, and other materials is recognized as a major and growing transnational criminal economy, frequently linked to moneyaundering, human trafficking, and violence. It also contributes to the significant arms trafficking in the region, some of which has been on display in Mexico after the recent killings of a drug kingpin.
▶ 2:27:38What specific steps steps are you taking at the State Department to leverage diplomatic engagement, foreign assistance, and law enforcement cooperation alongside commercial policy and other measures to more effectively disrupt illegal mining networks? So our biggest priority, Congressman, is uh to advance our national interest and our biggest prior and the biggest pain point from an economic security standpoint is our mining reliance on China.
▶ 2:28:06And so we're working to derisk those supply chains. We are working um in tandem with countries who are home to large mining concessions whether it's the Democratic Republic of Congo, Australia um along with various South American countries in order to identify brownfield mining concessions as well as the opportunity to um to expand refining capacity uh within the next 24 months
▶ 2:28:36um through the the deployment of capital to to expand and existing refineries.
▶ 2:28:42So, but I wanted to ask you specifically um you know what steps you're taking, what measures to more effectively disrupt illegal mining networks.
▶ 2:28:50So, my understanding is that a lot of the illegal activities are actually being conducted by Chinese-run companies in subsaharan Africa. And so the best thing that we could do to fight illegal mining networks is actually um um uh buy out China's stakes and in those concessions in order to bring them under the oversight of American companies.
▶ 2:29:12As you know, American companies are subject to um the uh foreign corrupt practices act which is obviously leaps and bounds different than the lack of standards that Chinese companies operate by. So if American companies run the concessions, they will inherently be substantially more ethical and accountable than Chinese companies ever will.
▶ 2:29:33I'm out of time.
▶ 2:29:34Thank you, Representative Castro. I often save my questions for the end and uh I have a couple of questions for you as well. Uh as under secretary of state for economic growth, energy and the environment, I would love to hear your threat assessment of China. What to your extent do you believe uh or rather what do you believe is the extent of trust that you have in China? Whether they you trust they will do something or you trust that they will not do something. Outline to me your threat assessment in China please.
▶ 2:30:05Thank you Mr. Chairman. The administration's policy towards China is we want a stable constructive relationship with China. With that being said, it is also true that um we do not trust China and having a stable relationship with them is not in contradiction with not trusting them. Um China has not given us many reasons to trust them. the world.
▶ 2:30:32One of the reasons why the president's tariff policy is so important right now is because the much of the world that does not have similar tariff regimes is ex is on the receiving end of what many are characterizing as a China shock 2.0. China's export surplus towards the rest of the world exceeded $1.2 trillion last year, a record. They are flooding the world with cheap smartphones.
▶ 2:31:01They're flooding the world with cheap telecom. They're flooding the world with cheap BYD electric vehicles. Um, and frankly, it's a major problem for Europe. It's a major problem for Southeast Asia. Um, a lot of European governments are actually increasingly becoming vocal, for the first time in my lifetime, they're becoming increasingly vocal about the challenges that China faces. So they're a formidable economic competitor and adversary.
▶ 2:31:30And so we are working to out compete them while at the same time doing what we have to do to secure our supply chains and make sure that our companies are built on sound foundations where they can build and lead the world in technology.
▶ 2:31:46Thank you. Is there a place that you assess uh China will not seek to overtake the United States? China um has made no qualms about their plans to try to overtake us. To their great chagrin, they are decelerating economically. Um and you know, in in 2009, the BBC and Goldman Sachs issued a forecast that by 2025, China's economy would overtake the United States.
▶ 2:32:16And it is a quintessentially American underdog story that uh America has defied all those forecasts uh of people who predicted American decline. Um America remains the world's largest economy by a lot. Uh at the end of last year, the world's top 10 companies um in the world by market cap were all American companies. And so we are in a very strong position.
▶ 2:32:41With that being said, as you know from your life in politics, the only way to compete in a race is to run unopposed or scared. And so we can't take anything for granted, which is why we are uh working in as fast as as humanly possible to secure our supply chains.
▶ 2:32:58In a race, I want us to run faster, but I always say I'm not afraid to trip up uh those that we're running against as well. This isn't about a fair race. This isn't the Olympics, right? We're not running around a track uh looking to to have a fair competition. We're looking to destroy an adversary that's working to actively destroy us, which not to put words in your mouth is what I am surmising of your assessment. Um again, not to put words in your mouth.
▶ 2:33:25Do you assess there is a situation where China willingly conceded uh that America will dominate that sector?
▶ 2:33:32Sorry, which sector?
▶ 2:33:34Do you assess that there is a sector that China will just concede? All right, America, you can have that. America, you can dominate. Do you assess that there's a sector they will concede to us?
▶ 2:33:43My assessment is on on all the most important sectors related to technology, China has very well-laidout plans to try to move up the continue moving up the value chain and dominate those sectors. They, you know, want to compete. Um they they, as you point out, they don't play fair. They never do. And and ultimately, um we, you know, Americans are very competitive, too. Um the Trump administration is extremely competitive and so we
▶ 2:34:11God for that
▶ 2:34:12we're we're playing to win and so we we do want to have a stable constructive relationship with China. The president has a positive relationship with Xi Jinping. At the same time we're about the US ofA and we're never going to apologize for putting America first.
▶ 2:34:30That's exactly what I expect out of you. I'm never going to apologize that for that as well. uh same line of questioning is there uh and you talk about uh their desire to dominate and in their desire to dominate do you assess there's any sector any industry where China will not dump and depress as you were talking about earlier
▶ 2:34:51um congressman I I I can't currently think of an industry where China doesn't engage in the depreciation of uh artificial depreciation of prices
▶ 2:35:02very good I uh thank you for answering my questions today. My time is expired, even though I guess it's my time and I'm the only one here now. Um, but I am going to move to a closing statement. And what I typically do when I move to closing statements is I give our witness or witnesses an opportunity to uh respond to things that you haven't had the chance to respond to.
▶ 2:35:21you've had a lot of accusations and things thrown at you and I only want a yes or no answer and uh no opportunity for you to really answer things, but uh I guess maybe I would frame this opportunity for you to close uh close this hearing out with you said we're very competitive. That defines us as Americans, that we are competitive, right? Uh I always love the old speech from uh George S. Patton where he's talking to the army and he's saying, you know, Americans love a winner, they hate a loser.
▶ 2:35:48to Americans, the idea of of losing and laughing is hateful, right? We love the big league ball players and the championship boxers. You know, basically, we don't lose and laugh. We fight and and we fight to the end. It's why we've never lost a war and we'll never lose a war. We're just different. We're built differently, and I'm damn proud of that. So, tell me uh in your words uh about your you're most proud of the competition that we've levied in this last year against the rest of the globe uh in uh this closing remarks, if you don't mind.
▶ 2:36:18Well, let me just say that um as someone who spent most of my adult life in Silicon Valley and in the tech industry, I'm incredibly proud of the ingenuity that our country has had. Um we have defied the odds at critical junctures when people least expected it.
▶ 2:36:37Um at many points in our country's history when the um academic parlor halls have uh prognosticated the slow gradual managed decline of our country, we always surprise um when China launched its hypersonic missile and said that it was the end of America. Uh America surprised the world with um actually surging ahead in artificial intelligence.
▶ 2:37:01And now China is panicking to catch up and is obviously stealing our technology to do it. And so um and so it's it I'm incredibly proud. Our policy really has three pillars. Uh Mr. Chairman, we want to win the AI race and the technology race large. We're very proud that PCIA now includes 11 signitories in three months.
▶ 2:37:26India's accession, the chip concier service, $250 billion in investment from Taiwan, and recently the roll out of the maritime action plan that all contribute to American strength. We are committed to using every tool in our toolbox, whether it's sanctions when necessary when we want to produce maximum pressure for maximum change. Um, as well as diplomatic and commercial partnerships.
▶ 2:37:52And the and thirdly, we welcome working with Congress as a partner to achieve the objectives that we care about.
▶ 2:38:01Anything else?
▶ 2:38:03That's all I have.
▶ 2:38:04Very good. I want to thank you, Under Secretary, for your valuable testimony. I want to thank other members uh if they're watching uh for their questions. And members of the committee may have some additional questions for uh yourself, Under Secretary, and we will ask you to respond to those in writing. In that uh pursuant to committee rules, all members may have five days to submit statements, questions, and extraneous materials for the record. Subject to length limitations. Without objection, the committee stands adjourned.