The National Times - Bessent Blames Commerce Dept for Failing to Blacklist Nvidia Partner Megaspeed

US Treasury Secretary Scott Bessent said Friday that four federal agencies had favored placing Singapore-based chip distributor Megaspeed on a trade blacklist for months, but the Commerce Department did not act. The remarks intensify scrutiny of Commerce Secretary Howard Lutnick amid allegations that his administration stalled export controls on Nvidia chips destined for China.

Bessent told CNBC’s Squawk Box that the Treasury Department, the Pentagon, the State Department, and the Office of the US Trade Representative all supported adding Megaspeed to the Commerce Department’s entity list. The entity list is a trade blacklist of groups connected to China that US officials say pose national security risks.

“But Commerce has the pen,” Bessent said. “You will have to ask them about their internal processes.”

The Commerce Department did not immediately return a request for comment regarding its decision-making process.

Criticism of Lutnick’s oversight of export controls is growing. Media reports this week indicated that Lutnick stalled President Donald Trump’s crackdown on companies suspected of diverting Nvidia chips to China. Republican Senator John Curtis said Friday that Lutnick’s reported stalling raises questions about whether the Commerce Department is acting in the best interests of the American people.

Democratic Senator Richard Blumenthal called for Lutnick’s resignation, stating, “Lutnick must go. His malign self-enriching malfeasance shows the costs of corruption — putting personal profit above public interest.” He added that making powerful Nvidia chips available to China through an apparent spy undercut both national security and economic competitiveness.

Megaspeed has come under scrutiny following reports that Nvidia CEO Jensen Huang had an affair with former Megaspeed executive Alice Huang, whom US authorities suspect of being a Chinese spy. Reuters reported Thursday that senior White House officials are discussing whether Lutnick should be pushed out amid the scandal.

Bessent said the administration is working to shut down “leakage” in the chip export system and pointed to questions over how well Nvidia vetted its partner company amid Huang’s exit this week, which sent shockwaves across the AI industry.

US lawmakers have called for tougher restrictions on China’s access to advanced AI chips in the wake of the scandal. Bessent emphasized that accountability is necessary, asking, “The real story here should be, did Nvidia know their client, and was there a robust effort at Nvidia to make sure that there was no leakage and that they were selling to what were obviously pass-through shell companies?”

He added, “It’s important that anyone at the company there be held accountable for that.”

When asked if Congress needed to step in to act on export controls, Bessent said, “We have all the authorities that we need. They just need to be implemented.” Senate Banking Committee Chair Tim Scott asked Lutnick to testify on Thursday.

H.Davies--TNT