Donald Trump’s nominee for the commerce department, Howard Lutnick, stated on Wednesday that Canada and Mexico can avoid impending US tariffs if they act swiftly to close their borders to fentanyl. Lutnick, a billionaire Wall Street CEO, made these remarks during his US Senate confirmation hearing, where he also vowed to slow China’s advancement in artificial intelligence (AI).
Lutnick explained that Trump’s Saturday deadline for imposing 25% tariffs on goods from Canada and Mexico was intended to pressure the two countries to stop the flow of fentanyl into the US. He emphasized that these threatened duties are separate from the broader review of US tariffs, trade deals, and other trade policies 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” in trade with other countries, aligning with Trump’s vow to impose a universal tariff of 10% on all US imports. He also expressed a desire to improve US 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 US 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.”
Following the US 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 US AI leadership. Lutnick accused DeepSeek of misappropriating US 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.”
Lutnick’s statements reflect the Trump administration’s aggressive stance on trade and technology. By leveraging tariffs and imposing stricter controls on technology access, the administration aims to address issues such as the fentanyl crisis and maintain US leadership in AI. As Lutnick awaits confirmation, his proposed policies will likely continue to shape the discourse on trade and technology in the coming months.