US Commerce Secretary Howard Lutnick repeatedly delayed efforts to restrict companies suspected of diverting advanced Nvidia artificial intelligence chips to China.
This came even after President Donald Trump approved action on multiple occasions, according to a report by Axios.
Lutnick appeared to agree with the proposed restrictions but said he needed to check with Trump, Axios reported, citing six senior sources familiar with the discussions. The meeting included Defence Secretary Pete Hegseth , US Trade Representative Jamieson Greer and National Security Adviser and Secretary of State Marco Rubio. Check live updates on Nvidia here. The officials later took the discussion to the Oval Office , where Trump called technology adviser Elon Musk before making his decision. Musk supported the position taken by Bessent, Rubio, Greer and Hegseth, while Lutnick warned that tighter restrictions could trigger a trade war with China . However, after leaving the Oval Office, Lutnick proposed developing options and returning with them. Other officials insisted that the decision had already been made and the department should implement it. In a separate report by Axios, there is a detailed Bessent’s confrontation with Lutnick, saying the Treasury secretary questioned why Megaspeed had not been placed on the Commerce Department’s Entity List, which identifies entities subject to US export restrictions. The Commerce Department’s spokesperson, Kristen Eichamer, denied that Bessent had confronted Lutnick. She did not immediately comment on the other allegations in the report. The dispute centres on Megaspeed, which has been accused of helping divert advanced American chips to China through Southeast Asian intermediaries. A senior executive at the company, Alice Huang , is suspected by US intelligence of being a Chinese intelligence asset. She has also been linked to Nvidia CEO Jensen Huang , although the allegations surrounding her activities remain under scrutiny. In the letter published on Bennet’s official Senate website, the senator asked the administration to consider placing the company on the Entity List and to coordinate with Singapore, Malaysia and Indonesia over potential violations of US export controls. The latest dispute highlights competing considerations within the administration over access to the Chinese market, trade relations and the risks of advanced US technology reaching Chinese entities.
Axios said Trump had approved action against suspected diversions of Nvidia chips to China at least three times this year, in May, August and on November 5, but Lutnick and Commerce Undersecretary Jeffrey Kessler had resisted pressure to move forward. He requested a response by November 24.
Trump ultimately directed officials to proceed, saying, “Let’s get it done”, the report said.
The Trump administration had earlier moved towards easing restrictions on Nvidia’s H200 chips for China. During a White House Situation Room meeting on Thursday, Treasury Secretary Scott Bessent challenged Lutnick over the Commerce Department’s failure to impose export controls on companies suspected of diverting Nvidia chips to China, particularly Singapore-based Megaspeed International.
