Commerce Secretary Howard Lutnick Stalls Donald Trump Crackdown on Nvidia Chip Diversions to China

WASHINGTON — Commerce Secretary Howard Lutnick stalled an executive directive from President Donald Trump targeting corporate networks that divert advanced Nvidia semiconductors to China, exposing sharp fault lines inside the administration's national security team.

The pushback derailed Trump's third attempt this year to choke illicit chip conduits to Beijing. Trump authorized the sweeping export crackdown on Thursday after conferring directly with billionaire adviser Elon Musk. But Lutnick refused to clear the operational orders.

He dug in.

Situation Room Clash Over Export Controls

The resistance triggered an immediate confrontation inside the White House Situation Room on Thursday. Lutnick sat across the table from Treasury Secretary Scott Bessent, Defense Secretary Pete Hegseth, Secretary of State Marco Rubio, and US Trade Representative Jamieson Greer for a high-level review of strategic trade restrictions.

Bessent confronted Lutnick directly during the session, challenging the Commerce Department's repeated delays in executing export controls against intermediary firms suspected of funneling Nvidia's graphic processing units into Chinese hands. Lutnick appeared to concede ground under pressure from Bessent. Yet he stopped short of authorizing the crackdown, telling the assembled Cabinet officials that he needed to review the matter directly with Trump before clearing his department to act.

The enforcement action remains on hold as Lutnick seeks a decisive audience with Trump to determine whether the Commerce Department will deploy the sanctions or grant tech exporters additional leeway.