The big picture: Over the past year, Lutnick has slowed broader administrative efforts to address suspicions that Singapore-based Megaspeed was illegally diverting chips to China, Axios first reported.
- Administration officials had pushed to put Megaspeed on the Commerce Department’s Entity List, which would have restricted exports of U.S. technology to the company.
Driving the news: Treasury Secretary Scott Bessent confirmed this on Friday.
- “Treasury, War, USTR and State have been supportive of putting Megaspeed on the Entity List for months, but Commerce has the pen,” Bessent said on CNBC.
- Trump himself supported action three times, but those efforts were delayed by Lutnick, Axios reported.
There is a widespread belief Among Trump’s wide circle of advisers, the Nvidia scandal might be too big for Lutnick to survive — but Trump is standing by him for now.
- Behind the scenes, the White House has not expressed concern about efforts to have Lutnick testify before Congress.
- MAGA commentators also tear Lutnick on shows like “War Room with Steve Bannon,” while Republican senators openly take him to task.
For the record: “Secretary Lutnick plays a fundamental role in advising the President on many different areas. The reports you have published are inaccurate and false and literally misrepresent the subject, creating a false impression,” the Commerce Ministry said in response to Axios’ queries.
Point of friction: The brewing scandal stemmed in part from a CIA warning that Jensen Huang was having an affair with Alice Huang, who ran Megaspeed and was also accused of being a Chinese spy.
- This warning appears to have been ignored by Commerce Department officials, sources told Axios.
Context: Last fall, CIA intelligence indicated that Huang was the target of espionage, which was reported in a “book” written by the Office of the Director of National Intelligence for a small circle of administration officials with top-secret clearance, according to people familiar with the matter.
- In March, Secretary of State Marco Rubio, who is also White House national security adviser, wrote a memo on the issue to ensure that cabinet officials with “stock” in Nvidia and AI were informed, one of these sources said.
- “The memo was written so Lutnick, Bessent and others knew what was going on,” a source said.
- “Howard got the memo. He ignored it,” a second source said.
In May, As Trump flew to China aboard Air Force One, Rubio verbally briefed the president as a “reminder,” one of the sources said.
Reality check: Through it all, Trump has repeatedly stood by Lutnick.
- The president has defended Lutnick time and time again, whether on tariffs, immigration or the latest battle in China.
- There is no indication that Trump has changed his position since he publicly defended Lutnick on Thursday.
The bottom line: As Trump continues to defend Lutnick, administration officials and congressional Republicans have clearly chosen a target.
Gn bussni
