Lutnick the US Commerce Nominee Defends Trump Tariffs and Promises Strong
Stance on China
Howard
Lutnick, the financier President Trump has picked to
lead the Commerce Department, said he favored
“across-the-board” tariffs and was grilled about his financial ties in a
nomination hearing Wednesday.
Howard
Lutnick, a wealthy donor to President Trump who has
been chosen to lead the Commerce Department, defended Mr. Trump’s plans to impose
broad tariffs and said he would take a tough stance on technology sales to China
during his Senate confirmation hearing on Wednesday.
If
confirmed, Mr. Lutnick would lead on trade policy and
oversee a broad portfolio of government programs touching on business promotion,
technology and science. He told lawmakers that he favored
“across-the-board” tariffs that would hit entire countries rather than specific
products, to equal out America’s trading relationships.
He
said that, while he believed tariffs on China “should be the highest,” governments
in Europe, Japan and South Korea had also taken advantage of the United States on
trade. He said that American farmers, ranchers and fishers were being “treated with
disrespect around the world.”
“We
need that disrespect to end, and I think tariffs are a way to create reciprocity,
to be treated fairly, to be treated appropriately,” he said. Mr. Lutnick also insisted that tariffs would not cause inflation,
though many economists say tariffs are often at least partly passed on to consumers
in the form of higher prices.
Asked
about China’s recent advances in artificial intelligence, Mr. Lutnick said he would take a tough stance on the department’s
oversight of technology sales to China, and back up U.S. export controls with the
threat of tariffs. He said that the recent A.I. technology released by the Chinese
start-up DeepSeek had been underpinned by Meta’s open
platform and chips sold by the U.S. company Nvidia.
“We
need to stop helping them,” he said of China, adding: “I’m going to be very strong
on that.”
A
Meta spokesman said that there were reports that a variety of A.I. models were used
to build DeepSeek’s model, and that Meta’s open source
A.I. platform, Llama, was not one of them.
Mr.
Lutnick also tried to walk a careful line when it came
to a $50 billion program created by Congress in 2022 to help bring semiconductor
manufacturing back to the United States from Asia. Mr. Lutnick
would play a key role in overseeing that program, which was created by the program,
known as the CHIPS Act.
Mr.
Trump has recently been critical of the program and described it as a waste of money,
even though its origins lay in the Trump administration. Taiwan Semiconductor Manufacturing
Company agreed to build a chip factory in the United States in 2020 after being
offered the promise of subsidies by Trump officials. Lawmakers later expanded those
subsidies to include other companies. Last year, T.S.M.C. was awarded $6.6 billion
in grants by the Biden administration.
Speaking
to Republican lawmakers on Monday evening, Mr. Trump said the government could have
brought companies back to the United States by threatening them with tariffs rather
than giving them subsidies.
“We
want them to come back, and we don’t want to give them billions of dollars like
this ridiculous program that Biden has,” the president said. “They already have
billions of dollars. They’ve got nothing but money, Joe.”
Mr.
Lutnick said in Wednesday’s hearing that he supported
chip manufacturing in America and described the chips program as “necessary and
important.” But he also repeatedly said he would “study” the program and refused
to commit outright to honoring legal contracts that companies
have already finalized and signed with the government.
“I
can’t say that I can honor something I haven’t read,”
he said of the contracts.
As
the head of the Commerce Department, Mr. Lutnick would
be in charge of government programs with enormous sway over the business and technology
sectors.
The
Commerce Department — which has 51,000 workers and an $11 billion budget — is in
charge of promoting business interests abroad, restricting technology exports to
protect national security, and delivering subsidies to the semiconductor and broadband
industries. It also oversees the U.S. census, patents, weather forecasting, fisheries
and the development of global technological standards, among other functions.
Mr.
Trump has also said that Mr. Lutnick would lead the administration’s
trade policy more broadly, including overseeing the Office of the U.S. Trade Representative,
a small agency with fewer than 250 employees that negotiates trade deals and levies
certain tariffs. The agency technically reports directly to the president, as well
as to Congress.
Mr.
Lutnick has argued in favor
of Mr. Trump’s economic vision, saying that the mix of lower corporate taxes, fewer
regulations, more oil production and higher tariffs will help supercharge the U.S.
economy. Mr. Lutnick is also a part of Mr. Trump’s efforts
to eliminate parts of the federal government, and has described himself as the founding
force behind the so-called Department of Government Efficiency, a cost-cutting effort.
A
longtime donor to Mr. Trump, Mr. Lutnick
more recently became a key economic adviser and helped to lead his transition team.
Mr. Lutnick is the chief executive and chairman of Cantor
Fitzgerald, a Wall Street brokerage, and holds leadership positions at BGC, another
brokerage, and Newmark Group, a commercial real estate firm. Mr. Lutnick has promised to resign the positions if confirmed.
Lawmakers
and Vice President JD Vance — who made a brief appearance at the hearing — promoted
Mr. Lutnick’s personal story, describing him as someone
who had achieved great success despite facing adversity. Mr. Lutnick lost both his parents by the time he was 18, and became
chairman of Cantor at just 35. A Long Island native, he lost his brother and most
of Cantor Fitzgerald’s employees in the Sept. 11 attack on the World Trade Center.
Through
Cantor and his other firms, Mr. Lutnick has acquired holdings
and executive positions in a stunning array of companies. Financial disclosures
filed by Mr. Lutnick last week showed that he has or previously
had executive positions in more than 800 companies, and had at least $800 million
in assets.
For
Mr. Trump and his supporters, Mr. Lutnick’s wealth and
business success are strong qualifications for the role of commerce secretary. But
Democrats view Mr. Lutnick’s financial ties with more
skepticism, saying they could raise questions about his
ability to put the interests of the American people ahead of those of himself and
former business partners. In the hearing, they questioned Mr. Lutnick about his financial ties, particularly Cantor Fitzgerald’s
investments in a cryptocurrency company called Tether.
In
a letter addressed to Mr. Lutnick on Monday, Senator Elizabeth
Warren, Democrat of Massachusetts, called Tether “a known facilitator of criminal
activity that has been described as ‘outlaws’ favorite
cryptocurrency,’” saying that the tool had financed Mexican drug cartels, terrorist
groups and the North Korean nuclear weapons program.
The
connections with Tether “raise significant questions about your own personal judgment
and the conflicts of interest that you will have if you are confirmed as Commerce
secretary,” Ms. Warren wrote to Mr. Lutnick.
At
his hearing, Mr. Lutnick denied any wrongdoing on the
part of Cantor or Tether, saying it was like “blaming Apple because criminals use
Apple phones.”
“It’s
just a product,” he said. “We don’t pick on the U.S. Treasury because criminals
use dollars.”
Senator
Amy Klobuchar, Democrat of Minnesota, also questioned Mr. Lutnick
about his business ties to Greenland. The New York Times reported on Wednesday that
Mr. Lutnick has financial interests in the mining industry
in Greenland, through Cantor Fitzgerald. Cantor has invested in a company called
Critical Metals Corp, which has proposed mining metals and minerals in Greenland
as soon as 2026.
Mr.
Trump has repeatedly proposed purchasing Greenland, which is an autonomous territory
within the Kingdom of Demark. The governments of both Denmark and Greenland say
the territory is not for sale.