Commerce Secretary Howard Lutnick is facing growing criticism, and reports say some White House officials are discussing whether he should be removed. The scrutiny centers on allegations that his department failed to enforce President Donald Trump’s instructions to restrict exports of advanced AI chips to China.
A report published Wednesday said Trump had approved tighter measures to prevent Nvidia chips from reaching China on at least three occasions: in May, August and November 5.
The May decision reportedly followed a briefing to Trump and White House officials about Alice Huang, who was suspected of having ties to Chinese intelligence, and her relationship with Nvidia chief Jensen Huang. One senior source said Treasury Secretary Scott Bessent, War Secretary Pete Hegseth and White House officials later urged Lutnick and Commerce Undersecretary Jeffrey Kessler to act, but they did not.
That month, the Commerce Department reportedly authorized about 10 Chinese firms, including Alibaba, Tencent and ByteDance, to buy Nvidia H200 chips.
The allegations involving Alice Huang drew widespread attention after a report on October 29 said U.S. officials believed she was a Chinese intelligence asset who may have tried to help divert Nvidia chips to China. Attorney General Todd Blanche said Thursday that the FBI was examining whether she had worked for Beijing, but investigators had not determined whether she was a spy.
On November 5, Lutnick met at the White House with Bessent, Hegseth, Secretary of State Marco Rubio and U.S. Trade Representative Jamieson Greer. Several people familiar with the discussions said Bessent challenged Lutnick over his department’s alleged resistance to export restrictions, particularly those affecting Megaspeed, where Alice Huang had previously been an executive.
Lutnick reportedly appeared to agree with the officials but said he needed to check with Trump. That raised concerns among those present, who said they had expected the Commerce Department to impose restrictions before, only for no action to follow. One official described Lutnick as delaying the matter; another said the issue remained a concern.
One participant reportedly pushed for the controls to be put in place that day, leading to a second meeting in the Oval Office. Trump called Elon Musk, who was said to support the restrictions. Lutnick reportedly warned that imposing them could trigger a trade war with China.
Trump then told his team to move forward, according to the report. Lutnick said he would prepare options and return with them, but one source said officials believed the decision had already been made and expected him to carry it out. The restrictions had still not been implemented, the source said.
The Commerce Department and White House did not immediately respond to requests for comment. Department spokeswoman Kristen Eichamer disputed one part of the account, telling reporters that Bessent had not confronted Lutnick.
Senator Jim Banks, a Republican from Indiana, called the news deeply concerning. He said countries should not provide their most advanced technology to an adversary during a conflict, and noted that lawmakers had spent two years pressing to block high-end chip exports to China. Banks also said Nvidia had opposed earlier export controls and suggested the Commerce Department may have used loopholes to allow sales despite Trump’s direction.
Senator Tim Scott, the Republican chair of the Senate Banking Committee, wrote to Lutnick and Jensen Huang on Thursday, asking them to appear voluntarily before the committee next month. Scott said Lutnick’s testimony would be important to congressional oversight, given the department’s role in setting and enforcing export rules and the national security and economic stakes involved.
Eichamer later confirmed that Lutnick had agreed to testify voluntarily and answer the committee’s questions.
Meanwhile, senior White House officials have reportedly discussed whether Lutnick should be dismissed. A White House official said Trump continued to have full confidence in the secretary and his ability to do the job.
