U.S. President-elect Donald Trump nominated veteran Wall Street financier Howard Lutnick on Tuesday to become the head of the Commerce Department, the agency that has become the U.S. weapon of choice against China's tech sector.
Lutnick will lead "our Tariff and Trade agenda, with additional direct responsibility for the Office of the United States Trade Representative (USTR)," Trump said on Truth Social.
"In his role as Co-Chair of the Trump Transition Team, Howard has created the most sophisticated process and system to assist us in creating the greatest Administration America has ever seen," he added.
Lutnick, CEO of Cantor Fitzgerald, a financial services company, emerged as a close Trump ally in recent months and has been seen for weeks as a possible candidate for a position in the Trump administration, including Treasury secretary.
Trump's transition team did not respond to requests by Reuters 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 oversee the two agencies.
With the appointments, Trump taps a longtime friend who backs the Republican's vision to bring manufacturing jobs back to the U.S. and promote cryptocurrency adoption.
Lutnick also runs brokerage BGC Group and is chairperson 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.
McMahon, who, along with Lutnick, co-chaired Trump's transition team, was also named Education Secretary, heading a department that Trump proposed abolishing during his campaign.
Lighthizer, who was also considered an early candidate for Treasury secretary, could not be reached for comment.
With the latest picks, Trump's Cabinet is further shaping up following his presidential election win on Nov. 5. He has so far announced names to lead more than half of the 15 agencies.
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.
Unlike other members of Trump's inner circle, Lutnick does not speak about China often. He is a big proponent of tariffs, especially aimed at China.
According to the New York Times, the investment banker said in a podcast interview last month: "Don't tax our people. Make money instead. Put tariffs on China and make $400 billion."
Cantor Fitzgerald, with offices in Hong Kong, underwrote Chinese biotech firm Adlai Nortye's Nasdaq initial public offering last year. It was the first Chinese listing since Beijing implemented new rules requiring companies in China to obtain a special filing before going public overseas.
The next commerce secretary will enforce a range of rules to hamper China's development of artificial intelligence and keep some of its biggest tech firms, including Huawei Technologies and Semiconductor Manufacturing International, several steps behind their global competition in key technologies.
A native of New York City's Long Island suburbs with a background in trading and real estate, Lutnick has been one of Trump's top Wall Street advocates, hosting fundraisers and touting his policies in the media.
