Donald Trump's Commerce Secretary Pick Endorses Sweeping Tariffs to Protect US AI Lead

Howard Lutnick, President Donald Trump's nominee for Commerce Secretary, emphasized the utility of broad country-by-country tariffs in addressing various economic concerns, including safeguarding America's lead in artificial intelligence (AI).

At his confirmation hearing, Lutnick expressed his preference for "across the board" tariffs. This statement came just days ahead of a key deadline that could potentially impose blanket duties on Canada, Mexico, and China.

Lutnick also connected tariffs to the ongoing debate on AI export controls. Emphasizing the need for tariffs to support such controls, he characterized the absence of tariffs as a "whack-a-mole model." Some critics have argued that the Biden administration's export restrictions were insufficient to prevent Chinese AI startup DeepSeek from developing a powerful new AI model.

"They stole things, they broke things, they have taken our IP," said Lutnick, referring to China. "It's got to end."

Tariffs became a recurring theme in anticipation of the February 1 deadline for the potential imposition of Trump's first tariffs. Trump has described Lutnick as the official who will "lead our Tariff and Trade agenda."

Lutnick consistently opposed targeted tariffs, arguing that they could lead to a cycle of retaliation. He also expressed skepticism towards tariff exclusions, stating that he preferred a "simple" approach, which Trump allegedly shares.

"My way of thinking, and I've discussed this with the president, is country by country, macro," he added.

While acknowledging that tariffs could lead to price increases for certain goods, Lutnick dismissed the notion that tariffs cause inflation as "nonsense."

Lutnick is likely to be confirmed in the coming days. His confirmation hearing covered a wide range of topics, including his crypto investments, fishing, and the Commerce Secretary's extensive portfolio.

Lutnick expressed some disagreement with the Biden-era Chips and Science Act, which he will oversee if confirmed. While calling the program "an excellent down payment," he emphasized his intent to continue operating and funding it.

These comments follow Trump's recent criticism of the law, which he labeled as "ridiculous" and advocated for tariffs as the sole solution.

Lutnick echoed Trump's view during the hearing, emphasizing tariffs as a tool for creating reciprocity and promising to counter any retaliatory measures. He also maintained that new duties would ultimately benefit farmers.

Trump has pledged to impose 25% tariffs on Canada and Mexico, and 10% tariffs on China, citing issues related to migration and illegal drugs. The approaching deadline has left markets and global leaders uncertain about the potential outcome.

Despite Trump's aides confirming the February 1 deadline, Lutnick hinted at the possibility of Trump retracting his initial threats. He referred to the potential new duties as a "separate tariff" from the administration's long-term tariff plans. He added that countries like Mexico could avoid tariffs by taking action to address migration and drug trafficking.