Lutnick Repeatedly Held Up Nvidia Chip Export Restrictions, Even After Trump Approved Them Three Times, Per Axios
Three Approvals, Zero Restrictions
The president ordered the same crackdown three times. His own Commerce Department has yet to carry it out.
Commerce Secretary Howard Lutnick repeatedly held up restrictions on Nvidia chip exports to China, even after Trump approved them three times, per Axios. At an Oval Office meeting, Trump asked Elon Musk for his view; Musk backed tighter controls, along with Rubio, Bessent and Hegseth. Lutnick warned the move "will start a trade war with China." Trump ordered: "Let's get it done."
The restrictions still have not been put in place, according to Axios. The Commerce Department disputes parts of the account.
A Situation Room Split
The standoff came to a head last Thursday, when Trump authorized the crackdown on companies suspected of diverting Nvidia's AI chips to China for the third time this year, after consulting Musk. The same day, Lutnick sat in the Situation Room with Treasury Secretary Scott Bessent, Defense Secretary Pete Hegseth, Trade Representative Jamieson Greer and Secretary of State Marco Rubio.
Bessent confronted Lutnick over his department's resistance to implementing the export controls. Lutnick appeared to agree but said he needed to check with Trump first, per Axios.
Lutnick's role is decisive because enforcement runs through his department. The Bureau of Industry and Security, inside Commerce, licenses chip exports and polices diversion. A crackdown the enforcement agency will not enforce is a press release, and the diversion question is no longer theoretical: it sits at the center of the Megaspeed investigation, the board probe at Nvidia, and a proposed shareholder class action.
Options and Market Impact
Export enforcement is now a live variable in the Nvidia trade. Every week the restrictions sit unimplemented, suspected diversion channels stay open and the regulatory overhang on Nvidia grows: lawmakers from both parties are demanding tougher controls, document preservation letters have gone out, and the stock already fell about 8% after hours Wednesday on the board-ouster report.
Watch the policy-sensitive complex: Nvidia, Advanced Micro Devices, and the China-exposed chip names trade on each enforcement headline, while Lutnick's position itself is now part of the story Congress is preparing to investigate.
Bottom Line
Trump has approved this crackdown in May, in August, and again last Thursday. It has been stalled at the same desk every time. With the Huang scandal turning chip diversion into the biggest technology story in Washington, the gap between the president's orders and his Commerce Department's actions is about to get a congressional audience.
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