President Donald Trump's nominee to run the Commerce Department, Howard Lutnick, said on Wednesday that Canada and Mexico can avoid looming U.S. tariffs if they act swiftly to close their borders to fentanyl, while vowing to slow China's advancement in artificial intelligence.
Lutnick, a billionaire Wall Street CEO, at his U.S. Senate confirmation hearing, said he has advised Trump to pursue across-the-board tariffs country-by-country to restore "reciprocity" to America's trading relationships and said he would erect stronger curbs on China's access to U.S. technology, including advanced AI semiconductors.
Lutnick said Trump's Saturday deadline for imposing 25% tariffs on goods from Canada and Mexico was meant to pressure the two countries to stop the flow of fentanyl into the U.S. The threatened duties are separate from the broad review of U.S. tariffs, trade deals and other trade policy ordered by Trump when he took office last week.
"So this is a separate tariff to create action from Mexico and action from Canada," Lutnick said of the 25% duty threat. "And as far as I know, they are acting swiftly, and if they execute it, there will be no tariff."
Lutnick repeatedly called for a restoration of "reciprocity" on trade with other countries, which is in line with Trump's vow to erect a universal tariff of 10% on all U.S. imports. He also said he wanted to improve U.S. access to Canada's largely closed dairy market.
"My way of thinking, and I discussed this with the president, is country by country, macro," Lutnick told the U.S. Senate confirmation hearing when asked his preference for how Trump should impose tariffs.
"We are treated horribly by the global trading environment. They all have higher tariffs, non-tariff trade barriers and subsidies," Lutnick said. "They treat us poorly. We need to be treated better. We need to be treated with respect, and we can use tariffs to create reciprocity, fairness and respect."
Lutnick's comments echoed those made by Trump, who last week said the European Union is "very, very bad to us" and called tariffs "the only way ... you're going to get fairness."
AI RACE
Following the U.S. financial market reaction to the emergence of Chinese AI startup DeepSeek's powerful, low-cost generative AI model, members of the Senate Commerce, Science and Transportation Committee repeatedly asked Lutnick how he would maintain U.S. AI leadership.
Lutnick said DeepSeek had misappropriated U.S. technology to create a "dirt cheap" AI model and vowed to impose new restrictions on Beijing's technology access.
"They stole things. They broke in. They've taken our IP," Lutnick said of China. "It's got to end, and I'm going to be rigorous in our pursuit of restrictions and enforcing those restrictions to keep us in the lead, because we must stay in the lead."
