Lutnick, Approved by Senate Commerce, Says Strong Enforcement Will Be 'Hallmark' of Tenure

He also said he plans to review export controls over firearms and continue the Bureau of Industry and Security’s heightened export enforcement activity while also promoting exports around the world, including by pushing back on EU sustainability measures that could restrict certain American products.

“I intend for strong enforcement of export controls to be a hallmark of my tenure,” Lutnick said. “The Department’s enforcement teams must have the resources necessary to meet that standard.”

Committee Chairman Ted Cruz, R-Texas, said Lutnick, who rebuilt his New York City-based investment firm after it was devastated by the Sept. 11 terrorist attacks, is "prepared to meet the gravest of challenges, and we need him to be. In a time of great power competition, we must, as Mr. Lutnick told us, stay in the lead."

Commerce Committee ranking member Maria Cantwell, D-Wash., who joined most Democrats on the panel in opposing the nomination, raised several concerns about Lutnick, including his support for Trump’s threat to impose tariffs on Canada and Mexico. She also criticized Lutnick's approach to preventing cryptocurrency firms from facilitating money laundering.

Lutnick, in responses to written questions from Republicans and Democrats on the Senate Commerce Committee, wrote that he plans to carry out a review of U.S. export controls but didn’t give many specific details. He suggested he plans to scrutinize several export control rules recently introduced by the Biden administration, including the so-called AI diffusion rule that will place new, worldwide license requirements on shipments of advanced AI chips (see 2501130026).

He said Trump has ordered Commerce to “to assess this and other matters and prepare a report” that could lead to changes. Lutnick said he didn’t want to “get ahead of that process” because he hasn’t been confirmed, but “these issues are a top priority.”

He also agreed to work with several lawmakers on other export issues, including Sen. Jerry Moran, R-Kan., who asked Lutnick to work with Congress to “determine a path forward on export controls that adequately addresses China’s military modernization” and its development of dual use technologies.

Asked specifically by Moran whether Lutnick sees any “loopholes” in current U.S. export controls, Lutnick declined to provide details but said he is “committed to making any necessary changes to prevent malign actors from exploiting America’s innovation ecosystem.” He also committed to multiple lawmakers that Commerce will look to find and stop entities trying to evade U.S. export controls, particularly Iranian-backed entities, telling Sen. Dan Sullivan, R-Alaska, that “fighting circumvention is critical to the Department’s mission.” He also said he will work with U.S. partners, including in the Middle East, to enforce export controls and catch violators.

Lutnick also committed to review a BIS rule released last year that placed more stringent export licensing rules on firearms (see 2404260054 and 2311200009). Republicans have called on the agency to reverse the controls (see 2407250037 and 2402260045, saying they hurt American businesses. “Upon confirmation, I will ensure the Department reviews this policy and takes appropriate action,” Lutnick said.

Although Lutnick didn’t commit to pushing for more resources for BIS, he said he would study whether BIS is understaffed and underfunded. He told Sen. Maria Cantwell, D-Wash., that Trump “consistently requested increased funding for BIS” during his first term. “Proper resourcing is critical to our export control and enforcement regime,” Lutnick said. “I look forward to working with Congress to determine the appropriate level of funding to ensure BIS can execute its mission.”

Lutnick was asked by Sen. John Hickenlooper, D-Colo., how he will balance export controls while also looking to help U.S. businesses sell abroad. He called that a “central question moving forward,” adding that he plans to collect inputs from Congress, industry, and the public as we work to properly protect U.S. technology from exploitation by malign actors.”

Asked specifically by Moran about the U.S. aerospace industry, Lutnick said the sector “relies heavily on exporting” and stressed the importance of U.S. companies being able to participate in international trade shows that help export to new markets. He also said he’s “committed to strengthening our supply chains for all industries and [is] aware of the need, in particular, to strengthen our resiliency for supplying critical minerals, which are essential to the aerospace industry.”

Lutnick was also critical of EU initiatives that could lead to new restrictions on U.S. exports, including the Corporate Sustainability Due Diligence Directive (CS3D). The CS3D, which will require European companies to carry out specific due diligence on their supply chains, including to root out forced labor (see 2405240031), “imposes a significant burden on American corporations,” Lutnick said. “I will consider using all available trade tools at the Department’s disposal, as appropriate, to respond to any actions by foreign governments, including the EU, that harm the American economy and impose unreasonable burdens on our companies.”

Sen. Ted Budd, R-N.C., said he's concerned the EU’s anti-deforestation regulations, which will set mandatory due diligence rules for traders who import or export palm oil, beef, timber, coffee, cocoa, rubber and soy to or from the EU market (see 2412060050), could impose new barriers to American forest products exports, especially if the EU labels products from the U.S. as “high-risk” for deforestation.

Lutnick said U.S. products should be considered "low-risk" because of “our strong anti-deforestation measures." He said he's "concerned about the technical barriers to trade posed by the" law, adding that, if confirmed, he will order his staff at Commerce to "review the impact" of the rules.