Commerce Secretary Howard Lutnick stalled President Donald Trump's crackdown on companies suspected of diverting Nvidia's artificial intelligence chips to China, Axios reported on Wednesday, citing high-level sources.
Trump authorised the crackdown last Thursday, November 5 — the third time this year he has done so — after consulting billionaire Elon Musk. But despite the president's clearance, the restrictions have yet to be implemented, with Lutnick reportedly continuing to delay the process, according to the Axios report.
The latest confrontation unfolded during a meeting in the White House Situation Room on November 5. Treasury Secretary Scott Bessent pressed Lutnick over his department's resistance to carrying out the export controls, with Defence Secretary Pete Hegseth, Trade Representative Jamieson Greer and Secretary of State Marco Rubio also present. Lutnick appeared to agree but said he needed to check with Trump first, the report said.
Lutnick oversees the Commerce Department, which is responsible for implementing export controls through the Bureau of Industry and Security, the agency that licenses chip exports and polices diversion. Axios reported that Lutnick warned the controls "will start a trade war with China." Commerce disputed the reported confrontation. "This is false. Secretary Bessent and Secretary Lutnick had no such conversation," spokesperson Kristen Eichamer told Axios.
The dispute sits against the backdrop of the growing controversy around Nvidia chief executive Jensen Huang. The company's board launched an independent investigation after reports that Huang had a close relationship with a Chinese businesswoman whom United States intelligence officials believed was spying for Beijing. The diversion concerns centre on Singapore-based data centre company Megaspeed, which has bought large quantities of Nvidia chips. The White House and a spokesperson for Lutnick did not immediately respond to a request for comment.
Several US lawmakers have said in recent days that they want the Trump administration to take a tougher stance on exporting American chips to China, and have called on Congress to approve legislation toughening restrictions. Reuters reported in June that the administration had held off from adding China's AI startup DeepSeek, memory chipmaker CXMT and more than 100 other companies flagged as national security risks to a trade blacklist. The United States has not posted any additions to its Entity List since October 2025, the longest stretch between new postings in more than a decade.
