Wilbur Ross, the US commerce secretary designate, said Britain faced a “period of confusion” following the EU vote, according to The Times.
He said that it was “inevitable” there would be “relocations” of businesses and institutions.
The billionaire businessman added that the UK’s withdrawal from the EU was a “God-given opportunity” for London’s financial rivals.
In particular, he named Frankfurt and Dublin.
Mr Ross will be responsible for negotiating a free trade deal with the UK.
His reported comments will raise concerns the incoming US administration will seek to exploit Britain’s isolation following Brexit.
Mr Ross was said to have made his comments to an audience of Cypriot financiers in the days following last June’s referendum vote.
The comments were made before he had been appointed to Mr Trump’s cabinet.
“I recommend that Cyprus should adopt and immediately announce even more liberal financial service policies than it already has so that it can try to take advantage of the inevitable relocations that will occur during the period of confusion,” he is quoted as saying.
Labour said his comments, should be a “salutary warning” that other countries were ready to take advantage of the UK’s vulnerability.