Howard Lutnick, President Donald Trump’s nominee for Commerce Secretary, pledged to divest from all business interests if confirmed during his Senate hearing. He also acknowledged Cantor Fitzgerald’s convertible bond with Tether Holdings Ltd., a controversial cryptocurrency firm. Lutnick’s nomination and potential impact on trade policy are under scrutiny.
Howard Lutnick testifying before the Senate.
Lutnick, the long-time CEO of Cantor Fitzgerald LP, affirmed his commitment to divesting from all business interests within 90 days of confirmation. This includes his stakes in Cantor Fitzgerald, Newmark Group Inc., and BGC Group Inc. However, details regarding potential buyers and the future ownership structure of these firms remain undisclosed. This divestment is necessary to avoid potential conflicts of interest, given Lutnick’s extensive financial holdings. The complexity of his financial situation, which includes roles in over 800 entities and assets exceeding $806 million, underscores the significant undertaking this divestment represents.
A key point of contention during the hearing was Cantor Fitzgerald’s relationship with Tether Holdings Ltd. Lutnick confirmed the existence of a convertible bond, allowing Cantor to receive interest payments and potentially acquire shares in Tether under certain conditions. Senator Elizabeth Warren has previously raised concerns about this connection, citing allegations of Tether’s involvement in illicit financial activities. Lutnick maintained that Tether adhered to “know your customer” (KYC) regulations and that any issues were confined to the secondary market. Brandon Lutnick, Howard’s son and recently appointed CEO of a Cantor Fitzgerald special purpose acquisition company, was present during the hearing. He has reportedly worked with Tether in Switzerland, further intensifying scrutiny of the relationship.
Lutnick also addressed concerns about Cantor Fitzgerald’s investment in Critical Metals Corp., a company involved in mining in Greenland. He downplayed the stake as insignificant within his portfolio and clarified it was received in exchange for assisting the company’s public listing. This investment drew attention due to President Trump’s previous interest in acquiring Greenland.
Trump has tasked Lutnick with leading his “tariff and trade agenda” at the Commerce Department, including overseeing the US Trade Representative. Lutnick expressed a preference for “across-the-board” tariffs implemented on a “country-by-country” basis to promote “reciprocity, fairness, and respect” in trade relations. This stance aligns with Trump’s protectionist leanings and suggests a potential shift in US trade policy. Lutnick also indicated support for reviewing the billions of dollars allocated to domestic chip manufacturing under the Biden administration, while acknowledging it as an “excellent down payment.”
The Commerce Department’s role in managing US semiconductor export controls aimed at curbing China’s AI development was also discussed. The recent emergence of advanced AI software from Chinese startup DeepSeek has raised questions about the effectiveness of these controls, an area Trump has called for review. Lutnick’s leadership at the Commerce Department could significantly impact these policies and the broader US-China tech rivalry.
In conclusion, Howard Lutnick’s Senate confirmation hearing highlighted key issues surrounding his potential role as Commerce Secretary, including his commitment to divestment, connections to controversial cryptocurrency firm Tether, and views on trade policy. His leadership could usher in significant changes in trade practices, technology policy, and the department’s approach to fostering American business and economic growth. The Senate’s decision on his confirmation will have substantial implications for the future direction of US commerce and international trade relations.
