While Robert F. Kennedy Jr., Donald Trump’s pick to lead the US Department of Health and Human Services, is facing a grilling in one Senate hearing, the president’s choice to lead the Department of Commerce is also being questioned in a separate panel.
Commerce secretary nominee Howard Lutnick told lawmakers he prefers “across the board” tariffs, rather than targeted ones.
“My way of thinking, and I discussed this with the president, is country by country. Macro,” Lutnick said.
“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 tomato, they pick yellow corn. All you’re doing is picking on farmers which is just not going to happen,” he said.
He reiterated comments made by Trump that tariffs could help strengthen America’s leadership in the world. Lutnick also said that tariffs could help American farmers thrive.
Lutnick added that he will work with other agencies to understand the impact of possible retaliatory tariffs on the United State’s agricultural and manufacturing industries.
The former Wall Street CEO had a bold claim about tariffs: They won’t make overall prices rise.
“A particular product price may go up, but all of them? It is not inflationary,” Lutnick said at his confirmation hearing Wednesday. “The two top country with tariffs, India and China, have the most tariffs and no inflation. It is just a nonsense that tariffs cause inflation, it is nonsense.”
More context: Lutnick is correct that tariffs in certain circumstances do not cause inflation problems. Trump’s first-term tariffs did not meaningfully raise inflation, although they were far narrower in scope than what Trump is currently proposing, and the pandemic that follow skewed some of the inflationary aspects of the tariffs — many of which remained in place during the Biden administration.
But mainstream economists largely agree that tariffs cause inflation. That’s because importers — not the countries exporting the goods — pay the tax, and they typically pass that cost onto consumers in the form of higher prices. New research from the Peterson Institute for International Economics suggests Trump’s aggressive tariff campaign will force American consumers to pay more for practically everything — from foreign-made sneakers and toys to food.
Still, some proponents of Trump’s plan say the risk is worth the reward. Jamie Dimon, CEO of JPMorgan, last week told CNBC that if tariffs cause a little inflation but address a national security issue, then people should “get over it.”
This post has been updated with of Lutnick’s remarks.