Commerce Secretary stalls Trump's proposed Nvidia chip curbs on China

The internal policy stall

Commerce Secretary Howard Lutnick has reportedly held back a set of new curbs that President Trump had suggested regarding the sale of Nvidia hardware into China. This decision follows a series of discussions held in the Oval Office. The move suggests a pause in the administration's momentum toward stricter hardware limits.

The delay comes at a sensitive time for the semiconductor industry. As of mid-November 2026, Nvidia's market value has seen an estimated drop of $700 billion. Investors are closely monitoring how the government chooses to police the export of these high-end AI chips to foreign markets.

While the curbs have not been officially killed, the current stance indicates a lack of consensus within the executive branch. The Commerce Department is the primary body responsible for deciding which foreign buyers are permitted to purchase America's most advanced AI technology. For now, the department's leadership appears to be acting as a brake on more aggressive restrictions.

Friction over specific buyers

The internal disagreement is fueled by specific concerns regarding a Singapore-based company called Megaspeed. This company is an Nvidia customer that has been alleged to be moving massive amounts of hardware into China. Megaspeed has reportedly bought over $4.8 billion in Nvidia chips since mid-2024.

Treasury Secretary Scott Bessent recently confronted Lutnick in a Situation Room meeting regarding this specific issue. Bessent questioned why Megaspeed had not yet been placed on the Entity List. This list is the trade blacklist used by the Commerce Department to sharply restrict a foreign company's ability to receive sensitive US technology.

The administration has faced criticism for its lack of action on this list. The department has not added a single new name to the Entity List since October 2025. Despite this, multiple applications for inclusion have been under review, creating a bottleneck in how the government handles potential espionage or illegal trade routes.

Intelligence and legislative pressure

The debate is further complicated by a classified memo received before President Trump's trip to China in May 2026. The memo reportedly concerned the ties between Nvidia CEO Jensen Huang and Alice Huang, a former executive who has been linked to potential Chinese espionage. This adds a layer of personal and security scrutiny to the company's leadership.

Beyond the cabinet, the executive branch is also facing significant pressure from the legislative branch. Democratic lawmakers are currently pushing for much tighter limits on the export of advanced AI chips. They are seeking to ensure that American technology does not bolster the military or industrial capabilities of geopolitical rivals.

To ensure the administration takes action, these lawmakers have established a formal deadline. Lutnick must answer to the Democratic group by December 1, 2026, regarding how the department will handle these responsibilities. This timeline forces the Commerce Department to eventually choose between the current status quo and a more restrictive regulatory environment.

What to watch for next

The next few months will be critical for determining the final direction of US chip policy. The primary marker to watch is the December 1 deadline. The way Lutnick addresses the demands from Democratic legislators will reveal whether the department is willing to yield to congressional calls for more rigorous oversight.

Another key signal will be any movement on the Entity List. If Megaspeed is eventually added to the blacklist, it would indicate that Treasury Secretary Bessent's push for enforcement has succeeded. If the list remains unchanged, it suggests that the administration is prioritizing the economic interests of major chip customers over immediate blacklisting.

Ultimately, the policy toward China currently looks less like a unified strategy and more like a negotiation. With Commerce holding back, Treasury pushing for action, and Congress setting deadlines, the fate of Nvidia's export market remains in a state of flux. The outcome will depend on which of these competing interests carries the most weight in the coming months.