Facing tough questions on tariffs and the administration’s attempted freeze on federal funding, Howard Lutnick, President Donald Trump’s pick to head the Commerce Department, told senators Wednesday that he aims to crack down on both trade allies and adversaries who treat the U.S. “horribly.”
Although his promise to bring supply chains onshore and boost U.S. competitiveness on artificial intelligence and other technologies was met with bipartisan approval, Democrats tried to nail down Lutnick’s stance on sweeping tariff plans and a pause on already-obligated program funds. The Trump administration, after a backlash, rescinded an Office of Management and Budget memo that froze many grant, loan and assistance program funds.
Meanwhile, Republicans lauded Lutnick’s business acumen. Vice President JD Vance, who introduced the nominee at the Senate Commerce, Science and Transportation Committee hearing, called Lutnick a “good dude.”
“If you look at his career, Howard is the kind of guy who developed innovative products,” Vance said. “He has a number of patents to his name … But he’s also an incredible sales guy. This is a person who on the world stage will say more and do more and convince businesses that America is back, that America is growing and thriving.”
Lutnick is currently CEO of Cantor Fitzgerald, a financial services firm, and also served as a key adviser on Trump’s transition team. Lutnick disclosed hundreds of millions of dollars in assets in a financial disclosure form released last week, which detailed $200 million in income from Cantor Fitzgerald alone.
He told the committee that he would resign from the firm and divest from all of his business interests and assets within 90 days of his confirmation.
Trade agenda
Lutnick is expected to play a key role in carrying out Trump’s trade agenda. Trump posted on social media in November that Lutnick, if confirmed, will have “additional direct responsibility for the Office of the United States Trade Resentative.” USTR is responsible for negotiating international trade agreements.
Sen. Amy Klobuchar, D-Minn., asked Lutnick if he prefers targeted tariffs aimed at individual products, as she does, or Trump’s across-the-board tariff model.
“I prefer across the board,” Lutnick said, describing targeted tariffs as a tit-for-tat process. “We pick avocados, they pick white corn, we pick tomatoes, they pick yellow corn. All you do is picking on farmers, which is just not going to happen.”
Trump is set to impose 25 percent tariffs on Mexico and Canada on Saturday, Feb.1. The tariffs will be the first imposed during his second administration. Trump said that the tariffs are aimed at spurring action from the two countries to address the flow of drugs, especially fentanyl, and immigration into the U.S.
Sen. Gary Peters, D-Mich., raised concerns about the impact of those tariffs on the auto industry. The tariffs could bog down the production of parts that cross the border several times before final assembly, which Peters said could raise vehicle prices.
Lutnick said that the tariffs on Canada and Mexico are different than others the Trump administration may impose.
“It is an action of domestic policy. Shut your border and stop allowing fentanyl into our country, killing our people. So this is a separate tariff to create action from Mexico and action from Canada,” Lutnick said.
Several members from both parties raised concerns about the impact of a trade war on farmers. The Agriculture Department estimated that during Trump’s first term, retaliation by Canada, China, the European Union, India, Mexico and Turkey resulted in more than a $27 billion loss in U.S. agricultural exports, or $13.2 billion per year, from mid-2018 to the end of 2019.
Sen. Deb Fischer, R-Neb., asked Lutnick if he would work to understand the impact of retaliatory tariffs on agriculture and manufacturing. Lutnick agreed to her request.
Trump’s “America First Trade Policy” memo directs the Commerce secretary to investigate the causes of the U.S. trade deficit and make appropriate recommendations like tariffs. Lutnick said studies on the impacts of tariffs will be released at the end of March and April.
Fischer also asked how he plans on expanding American markets over the next four years.
“I think tariffs are a way to create reciprocity, to be treated fairly, to be treated appropriately, and I think it will help our farmers, our ranchers, our fishermen, to flourish, and that’s what I expect this administration is going to drive,” Lutnick said.
Broadband funding, AI
Amid ongoing confusion about Trump’s stated plans to freeze federal funds to allow for review, Democratic senators pressed Lutnick over the impact on the Broadband Equity Access and Deployment program allocated by the CHIPS and Science law and administered by the Commerce Department.
Lutnick said that the pause would give him “time to get confirmed and get [the programs] studied.” And when questioned about his obligation to spend appropriated funds under the law, he said he will work to capture the “benefits of the bargain” made between Democrats and Republicans.
In a tense exchange, Sen. Ben Ray Luján, D-N.M., tried to pin Lutnick down on whether he would withdraw funding allocated by law if Trump asked him to.
“I work for the President of the United States, and I’m here to execute his policies,” Lutnick said. “I think he agrees that broadband internet to America is important and that, efficiently, we deliver.”
“I’ll slow down — if the President asked you to cut an infrastructure program, would you cut the program?” Luján asked. “We have a responsibility to communicate to each other for the people that we work for, it’s not just that you work for Donald Trump, sir. You work for the American people if you get this position.”
Sen. Edward J. Markey, D-Mass., asked Lutnick if he would honor grant contracts already signed. Lutnick said he could not commit on the record to honor contracts he hasn’t reviewed.
Commerce Committee Chairman Ted Cruz, R-Texas, pushed back on Markey’s line of questioning, arguing that the law does not require the administration to follow “extra legal” policy.
“Your obligation is to follow the law,” Cruz said. “There’s no reason at all that they should be held to extra legal commitments.”
Senators also questioned Lutnick on how he would handle the threat of Chinese influence in the tech marketplace — a hot issue after markets were rocked Monday by reports that China’s DeepSeek startup can deliver results similar to those from U.S. for a fraction of the cost, spotlighting the intensifying competition among nations to be the world’s AI leader.
Trump said on Monday that the release of the app should be a “wake-up call for our industries that we need to be laser-focused on competing to win.”
“I think [China] only cares about themselves and they seek to harm us, and so we need to protect ourselves,” Lutnick said. “We need to drive our innovation and we need to stop helping them.”
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