WASHINGTON--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, said at his U.S. Senate confirmation hearing that he has advised Trump to pursue across-the-board tariffs country-by-country to restore "reciprocity" to America's trading relationships. He also 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."
Canada's Foreign Minister Melanie Joly, who is visiting Washington to help ease tensions, said Lutnick's "comments regarding the fact that we were addressing the border issue and fentanyl were positive."
She said the ultimate decision on tariffs rests with Trump, but Canada is prepared to retaliate with its own trade penalties if the president makes good on his threats.
In a hearing heavy with technical questions, 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."My way of thinking, and I discussed this with the president, is country by country, macro," Lutnick said 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."
