WASHINGTON--U.S. President-elect Donald Trump said on Tuesday he will nominate Wall Street CEO Howard Lutnick to lead his trade and tariff strategy as head of the Commerce Department, the agency that has become the U.S. weapon of choice against China's tech sector.
Lutnick, the head of brokerage firm Cantor Fitzgerald, will also have "additional direct responsibility" for the U.S. Trade Representative's office, Trump said in a statement. Trump's transition team did not respond to requests for clarity on Lutnick's responsibilities, including whether he would also serve as U.S. Trade Representative, traditionally the top U.S. trade policy job. The USTR reports directly to the president and different committees in Congress handle oversight for the two agencies. With the appointments, Trump taps a long-time friend who backs the Republican's vision to bring manufacturing jobs back to the U.S. and promote the adoption of cryptocurrency. Lutnick also runs brokerage BGC Group and is chairman of Newmark Group, a commercial real estate services firm, and FMX, a platform owned by some of Wall Street's biggest banks and traders. Shares of BGC fell 2.6%.
Lutnick's appointment was a setback to two other Trump supporters who had vied for the Commerce job, former small business administrator Linda McMahon and ex-USTR Robert Lighthizer. CNN reported that McMahon, who along with Lutnick co-chaired Trump's transition team, is expected to be named education secretary, heading a department that Trump proposed abolishing during his campaign. Lighthizer, who also had been considered an early candidate for Treasury secretary, could not be reached for comment. The Commerce Department oversees a sprawling array of functions with nearly 47,000 employees, from the U.S. Census Bureau to weather forecasting, ocean navigation and investment promotion. Its trade-related functions have grown in importance in recent years. They include authority over export controls on sensitive U.S. technologies, which have put it at the center of trade conflicts with China, as well as investigating anti-dumping and anti-subsidy cases that often result in punitive tariffs to protect domestic industries.
Trump used Commerce's authority over the "Section 232" national security trade statute to underpin his 2018 tariffs on steel and aluminum and may invoke it again to impose broad global tariffs on imports, trade experts say. To rebuild the U.S. manufacturing base, Trump has vowed to impose new tariffs of at least 60% on Chinese imports and 10%-20% on goods from elsewhere - moves that economists say would upend global trade flows and raise costs. Fearing Beijing could weaponize American technology to strengthen its military, both the Trump and Biden administrations have used Commerce Department authorities aggressively to impose regulations to halt the flow of U.S. and foreign technology to China - with a special emphasis on semiconductors and the equipment used to make them. Over the past two years, the U.S. has issued sweeping export controls on advanced chips and chipmaking equipment to China, which has limited its access to cutting-edge chips for artificial intelligence and equipment needed to produce the next generation of semiconductors.
