U.S. Commerce Secretary Howard Lutnick's economic commentary is inconsistent: inconsistent stances on manufacturing and trade policies

U.S. Secretary of Commerce, Howard Lutnick, recently commented on American manufacturing, trade policy, and tariff measures in several interviews, demonstrating a protectionist stance, though his statements were contradictory. Lutnick supports tariff policies, claiming they encourage the return of manufacturing, yet he also highlights that automation could replace jobs. His criticism of Taiwanese manufacturing conflicts with the U.S. policy of easing AI chip export restrictions. He simplifies the impact of the trade deficit on GDP, overlooking economic complexities, highlighting inconsistencies within the Trump administration's policies.

Lutnik's Stance on Tariff Policy: Balancing Praise and Downplay

In early May 2025, during an interview with Fox Business Channel host Larry Kudlow, Lutnik clearly expressed his support for the Trump administration's tariff policy. He stated, "In the past, it often took up to two years to reach a small agreement, but now we can negotiate a major deal in just 90 days." He further emphasized that the tariff policy helps relocate factories in industries such as pharmaceuticals, automobiles, and semiconductors back to the United States, thereby promoting economic growth.

However, just a few days earlier in another interview, Lutnik had stated, "A 10% tariff will hardly change any prices. The only thing that will change prices is products we don't produce in the U.S., like mangoes." This remark, made during his April 29 interview with CNBC, reveals a significant inconsistency in his assessment of the impact of tariffs in different contexts.

The Conflicting Narrative of Manufacturing Repatriation and Automation

Lutnik has repeatedly emphasized the need to bring advanced manufacturing back to the U.S., particularly AI chips and products like the iPhone. In a May 5 interview, he questioned, "Why must these important AI chips be manufactured in Taiwan? Why can iPhones only be produced in Taiwan and China, and not in the U.S. using advanced robotic technology?"

However, when asked whether the high cost of labor in the U.S. would affect manufacturing repatriation, Lutnik shifted to emphasize the role of automation. He stated, "There are robots now that can do these jobs. You will see automated production of iPhones, and the new jobs created will be for technicians to maintain the robots."

This presents a logical inconsistency: on one hand, he claims that manufacturing repatriation will create "millions of high-paying jobs," while on the other hand, he points out that these jobs will be replaced by robots, leaving only a few maintenance and technical positions. This makes his claim about whether "manufacturing repatriation can significantly create jobs" appear unclear.

Criticism of Taiwan and the Gap with Actual Policy Direction

In multiple interviews, Lutnik has targeted Taiwan, criticizing the over-reliance on Taiwan for manufacturing AI chips and iPhones. He stated, "The U.S. has the world's most advanced inventions and technologies, yet we let other countries produce these products, which is unfair."

The U.S. Department of Commerce, however, announced on May 7 that it would lift the restrictions on the export of advanced AI chips imposed during the Biden administration and replace them with new regulations. This move was interpreted by the market as a significant benefit to U.S. tech companies like NVIDIA, indicating that the policy direction does not aim to completely restrict foreign reliance but to seek greater flexibility in the global supply chain.

This also contradicts Lutnik's emphasis on "manufacturing must return to the U.S.," as easing export restrictions may actually encourage companies to continue producing overseas and exporting high-tech products.

Oversimplification and Misleading Conclusions of Economic Data

In an April CNBC interview, Lutnik claimed, "We have a $1.2 trillion trade deficit. If we cut it by 25%, that's a 1% growth in U.S. GDP, which is $300 billion, and that will forever make the U.S. economy grow by 1%."

However, the economic community generally believes that changes in the trade deficit and GDP growth are not linearly related. A reduction in the trade deficit may be accompanied by reduced consumption, withdrawal of foreign investment, or retaliatory tariffs, and does not guarantee proportional GDP growth. Lutnik's statement ignores the intricate interactions among trade, investment, and monetary policy, simplifying economic phenomena.

Lutnik's Role and Policy Influence

As the Secretary of Commerce in the Trump administration, Lutnik's statements have a certain influence on policy-making. According to a report by The News Lens, he and Treasury Secretary Scott Bessent were key figures in Trump's decision to temporarily suspend some tariff measures, indicating his role in policy coordination within the White House.

However, Lutnik's varied stances and contradictory comments also reflect the inconsistency and rapid changes in economic policy within the Trump administration. The volatility of policy signals may create uncertainty for business decisions and market expectations.

References

• 不爽美國「養活全世界」！美商務部長嗆：AI晶片為何要在台灣生產？ - 財經
• 不爽美國「養活全世界」！美商務部長嗆：AI晶片為何要在台灣生產？
• Scott Bessent - TNL The News Lens 關鍵評論網