President Donald Trump’s nominee to lead the Commerce Department, Howard Lutnick, told senators the argument that tariffs cause inflation is ‘nonsense’ during a confirmation hearing on Wednesday.
‘The two top countries with tariffs, India and China, do have the most tariffs and no inflation,’ Lutnick noted.
‘A particular product’s price may go up,’ he conceded, while arguing that levies would not cause broad inflation. ‘It is just nonsense to say that tariffs cause inflation. It’s nonsense.’
Lutnick testified before members of the Senate Commerce, Science and Transportation Committee ahead of an impending committee and full Senate floor vote to confirm him to the Cabinet position.
Inflation, which ticked as high as 9.1% in June 2022 under the Biden administration, became a defining issue in the 2024 election as Trump promised to bring household prices back down.
Lutnick also said he prefers ‘across-the-board’ tariffs on a ‘country-by-country’ basis, rather than ones aimed at particular sectors or products.
‘I think when you pick one product in Mexico, they’ll pick one product. You know, we pick avocados, they pick white corn, we pick tomatoes, they pick yellow corn. All you’re doing is picking on farmers.’
‘Let America make it more fair. We are treated horribly by the global trading environment. They all have higher tariffs, non-tariff trade barriers and subsidies. They treat us poorly. We need to be treated better,’ Lutnick went on. ‘We can use tariffs to create reciprocity.’
He said Trump, a longtime friend, was of a ‘like mind’ that tariffs need to be simple. ‘The steel and aluminum had 560,000 applications for exclusions,’ said Lutnick. ‘It just seems that’s too many.’
Trump recently signed an executive order directing the Commerce Department and the Office of the US Trade Representative to conduct a review of U.S. trade policy and tariff models, with a focus on China. Trump has said he intends to impose a 25% tariff on goods from Canada and Mexico on Feb. 1 amid concerns of mass migration and drug trafficking. He also said he would increase tariffs on China by 10%.
Lutnick also sounded off about Europe treating the U.S. industry unfairly.
I think our farmers and ranchers and fishermen are treated with disrespect overseas,’ he said.
‘Europe, for example, comes up with all these sort of policies, that our ranchers can’t sell steak. If you saw European steer and an American steer, it’s laughable. The American steers are three times this size. The steaks are so much more beautiful.
‘But they make up this nonsensical set of rules so that our ranchers can’t sell there.’
Lutnick said Chinese tariffs ‘should be the highest.’
‘But the fact that we Americans cannot sell an American car in Europe is just wrong. And it needs to be fixed,’ he said,
‘While they’re an ally, they are taking advantage of us and disrespecting us. And I would like that to end.’
His comments echoed those of Trump last week.
‘The European Union is very, very bad to us,’ he said. ‘So they’re going to be in for tariffs. It’s the only way… you’re going to get fairness.’
The governments of Mexico, Canada and nations in Europe have prepared a list of their own U.S. imports that will face tariffs in a tit-for-tat trade war if Trump follows through on taxing their own goods as they’re brought into the U.S.
Kaja Kallas, the European Union’s top diplomat, said Monday that European nations should unite to use their collective economic force against the U.S. if needed.
‘As the United States shifts to a more transactional approach, Europe needs to close ranks,’ she said at a news conference in Brussels. ‘Europe is an economic heavyweight and geopolitical partner.’