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US Treasury Secretary Scott Bessent criticized Howard Lutnick’s Commerce Department for failing to ban exports of Nvidia chips to Megaspeed, the Singapore-based company linked to an alleged Chinese spy.
Asked if there had been coordination in Washington on including Megaspeed on the U.S. trade blacklist, Bessent told CNBC on Friday that Treasury was among several other agencies that had been “in favor of putting Megaspeed on the entity list for months.”
“But Commerce has the pen…and you will have to ask them about their internal process,” he added.
The Treasury secretary’s salvo threatens to further inflame tensions within the Trump administration over how Nvidia was allowed to export chips to a company linked to Alice Huang, who U.S. authorities say worked with Chinese intelligence.
The United States has been investigating for more than a year whether Megaspeed was smuggling Nvidia chips into China.
Jensen Huang resigned as CEO of Nvidia on Thursday, in a dramatic fall after admitting to an extramarital affair with the Megaspeed executive.
Lutnick, the Commerce Secretary, is under growing pressure in Washington to explain how his agency allowed the export of chips to a company linked to a suspected Chinese spy.
Earlier this week, the FT reported that the Commerce Department had delayed efforts to add Megaspeed to Washington’s blacklist of companies the United States considers a national security risk.
Asked about reports that he confronted Lutnick about it, Bessent said Friday: “We don’t repeat conversations in the situation room. »
“I am frustrated when President Trump made it clear that China should not receive Nvidia chips above H100. So any leak is very frustrating because it hurts our big companies and the AI race gives the Chinese an advantage,” Bessent said.
Asked if the U.S. approach to chip exports needs to change, Bessent said: “I think we have all the authorities we need. They just need to be implemented.”
U.S. companies need licenses from the Commerce Department to export goods to companies on the Entity List, part of Washington’s attempt to prevent cutting-edge technologies from falling into the hands of China’s military.
Outraged Republican lawmakers on Thursday called on Lutnick to testify before Congress, while top Democrats demanded he preserve documents related to the case for investigations.
The renewed pressure from lawmakers on the Trump administration comes just a week after Republicans lost control of the U.S. Senate and House of Representatives in the midterm elections.
Lutnick, a former chief executive of the investment firm Cantor Fitzgerald, oversaw many of Trump’s most controversial trade war tariffs, including steep tariffs on steel, copper, aluminum, lumber and cars.
Bessent also raised questions about whether Nvidia knew its customer and whether it took “considerable effort…to ensure there was no leak.” “It’s important that anyone within the company is held accountable for this,” he added.
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