Commerce Secretary Howard Lutnick has allegedly delayed efforts by other senior Trump administration officials to restrict companies suspected of diverting advanced Nvidia chips to China, despite President Donald Trump authorizing a crackdown on the suspected activity, according to an Axios report published Wednesday.

The dispute came to a head during a Nov. 5 meeting in the White House Situation Room attended by Treasury Secretary Scott Bessent, Secretary of State Marco Rubio, War Secretary Pete Hegseth, and U.S. Trade Representative Jamieson Greer. Bessent confronted Lutnick over his department’s failure to impose export restrictions, particularly on Megaspeed International, a company at the center of allegations involving the diversion of Nvidia chips to Chinese customers.

According to six high-level sources cited by Axios, Lutnick appeared to agree with the other officials but said he needed to check with Trump. One official described the response as another attempt to delay action, saying Lutnick had previously met privately with the president and persuaded him to reconsider export restrictions.

The officials then challenged Lutnick to settle the matter that day. Around 5 p.m., the group went to the Oval Office, where Trump called technology adviser Elon Musk before agreeing to move forward with the restrictions. Musk reportedly supported the position advanced by Rubio, Bessent, Greer and Hegseth, while Lutnick warned that the measures would "start a trade war with China."

The other officials pushed back, arguing that Beijing was already engaging in the conduct Lutnick warned against. Trump ultimately directed the group to proceed, telling them, "Let's get it done." However, after the meeting, Lutnick reportedly said he would develop additional options and return with them. Other officials rejected the proposal, insisting the decision had already been made and that the Commerce Department should carry it out. Axios reported that the restrictions still had not been implemented.

The report describes a broader dispute within the administration over how aggressively to enforce U.S. export controls against companies suspected of supplying restricted American semiconductor technology to China. Trump had authorized action against suspected chip diversions on at least three occasions this year, in May, August and Nov. 5, but Lutnick and Commerce Undersecretary Jeffrey Kessler repeatedly resisted pressure to proceed, according to Axios.

The controversy centers in part on Megaspeed, which has been accused of illegally diverting Nvidia chips to China. The company is also connected to Alice Huang, a former employee suspected by U.S. intelligence officials of working for Chinese intelligence. The allegations involving Alice Huang and her reported relationship with Nvidia CEO Jensen Huang have intensified scrutiny of the administration's handling of the matter.

Lutnick's business background has also drawn attention because of his companies' historical connections to Chinese markets. BGC Group, which he previously led, holds a 33% stake in China Credit BGC Money Broking Company, a Beijing-based joint venture with state-owned China Credit Trust. Cantor Fitzgerald, the investment firm he led before joining the administration, has also helped Chinese companies enter U.S. public markets. Lutnick's family has additionally been linked to investments involving Satellogic, a satellite imagery company whose business has included work connected to Chinese entities. Lutnick agreed to divest his interests in Cantor Fitzgerald and BGC Group after becoming Commerce secretary, with the divestiture completed in October 2025.

A Commerce Department spokesperson, Kristen Eichamer, denied that Bessent confronted Lutnick during the meeting and did not immediately comment on the other allegations. The dispute comes as lawmakers and national security officials press the administration to take a tougher approach to preventing advanced American semiconductor technology from reaching China.