US Commerce Secretary Howard Lutnick has repeatedly delayed President Donald Trump’s efforts to crack down on companies suspected of diverting Nvidia artificial intelligence chips to China, according to an Axios report citing senior sources.
The development has exposed disagreements within the administration over how aggressively to enforce technology export restrictions.
Trump authorized the latest crackdown last Thursday, the third time this year he had approved action against companies suspected of redirecting restricted Nvidia processors to Chinese buyers, Axios reported. The president reportedly consulted billionaire Elon Musk before giving the go-ahead.
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However, Lutnick has repeatedly stood in the way of implementing the measures, according to the report.
The reported delays come as Washington faces renewed pressure from lawmakers to tighten controls on China’s access to advanced US semiconductors. The issue has gained additional political attention following disclosures about Nvidia chief executive Jensen Huang’s alleged relationship with a Chinese businesswoman suspected by US intelligence officials of spying for Beijing.
The dispute within the administration raises questions about the pace and consistency of US export control enforcement at a time when access to advanced computing hardware remains key to the technological competition between Washington and Beijing.
According to Axios, Lutnick met last Thursday in the White House Situation Room with Treasury Secretary Scott Bessent, Defense Secretary Pete Hegseth, US Trade Representative Jamieson Greer and Secretary of State Marco Rubio.
During the meeting, Bessent confronted Lutnick over resistance within the Commerce Department to implementing export controls, the report said. Lutnick appeared to agree with the need for action but said he needed to consult Trump.
The account points to differences among senior officials over the implementation of restrictions, although the precise reasons for Lutnick’s reported resistance were not disclosed.
The Commerce Department plays a central role in administering US export controls, including decisions on licensing and restrictions affecting the overseas sale of sensitive technology. Delays in implementing enforcement measures could therefore leave companies and intermediaries suspected of diverting restricted processors operating while the administration considers its next steps.
Several US lawmakers have recently called for a tougher approach to semiconductor exports to China. They have also urged Congress to approve legislation that would strengthen restrictions, following reports concerning Huang and his relationship with a Chinese businesswoman.
Nvidia’s board has launched an investigation after reports that Huang had a close relationship with the woman, whom US intelligence officials believed was spying for Beijing. The allegations have not established that Nvidia’s technology or sensitive information was compromised.
The controversy has added another layer of scrutiny to Nvidia’s business in China, where US restrictions already limit access to its most advanced processors. It has also intensified political attention on whether Chinese companies can obtain restricted computing hardware through intermediaries and overseas supply networks.
Export Blacklist Remains Largely Unchanged
The latest report comes amid a prolonged pause in additions to the US Commerce Department’s Entity List, which identifies foreign companies and organizations subject to restrictions on access to American technology.
Reuters reported in June that the Trump administration had held off on adding Chinese AI startup DeepSeek, memory chipmaker ChangXin Memory Technologies (CXMT) and more than 100 other companies flagged as national security risks to the trade blacklist.
The United States has not announced any additions to the Entity List since October 2025, marking the longest interval between new listings in more than a decade.
The pause speaks volumes because placement on the list can require companies to obtain US government licenses before purchasing specified American products and technologies. For Chinese technology firms seeking advanced processors, memory components and related equipment, such restrictions can complicate access to critical parts of the supply chain.
The reported delay in enforcement also highlights the distinction between announcing a tougher policy and carrying it out. While the administration has authorized further action against suspected chip diversion, the effectiveness of those measures is largely tied to the Commerce Department’s ability to investigate companies, identify supply routes, and impose restrictions.
Consequently, the issue comes with commercial and geopolitical consequences for Nvidia. The company’s processors are the backbone of the development of advanced AI systems, but their sale and use have become a major point of contention in US-China relations.
A more aggressive crackdown could disrupt the networks through which Chinese companies obtain restricted chips and servers. Continued delays, on the other hand, could leave gaps in enforcement that allow access to persist through third-country intermediaries.
The competing pressures leave the administration facing a difficult enforcement challenge: protecting US control over advanced semiconductor technology while ensuring that restrictions are implemented consistently across international supply chains.