Treasury Secretary Scott Bessent publicly blamed Commerce Secretary Howard Lutnick on Friday for the administration's failure to place Megaspeed, a Singapore-based cloud and data center firm and Nvidia customer, on a U.S. trade blacklist over national security concerns.
In an interview with CNBC, Bessent said that "Treasury, War, USTR and State" had all favored adding Megaspeed to the entity list "for months," but that "Commerce has the pen." He referred to the Commerce Department's Bureau of Industry and Security (BIS), which administers export controls, saying, "Commerce BIS has the pen, and you will have to ask them about their internal processes."
The remarks come after Axios reported earlier this week on tensions between the two cabinet secretaries. According to that report, Bessent approached Lutnick about Megaspeed's absence from the entity list, and Lutnick said he would "look into it." Citing anonymous sources, Axios also reported that Lutnick had spent the past year "undoing" efforts within the Trump administration to scrutinize the company, concerned about the impact on the U.S. trade war with China.
Megaspeed has been under scrutiny following revelations that former Nvidia CEO Jensen Huang had an affair with Alice Huang, a former Megaspeed executive whom U.S. officials concluded was a Chinese spy. The New York Times later reported a second affair with a direct report, and Huang stepped down from his role on Thursday.
Lawmakers are now calling for testimony from both Huang and Lutnick. Senate Banking Committee Chair Tim Scott (R-S.C.) sent letters to both on Thursday, requesting their appearance before the committee early next month. "Given the Department of Commerce's central role in issuing and enforcing export control regulations, your testimony before the Committee will be essential to our oversight of these efforts," Scott wrote.
Commerce spokesperson Kristen Eichamer said in a statement that Lutnick has "proactively agreed to appear voluntarily" before the Senate Banking Committee.
The dispute underscores the internal divisions within the administration over how to handle China-related technology firms. Bessent had earlier urged trade balance with China ahead of a possible Trump-Xi summit, but the Megaspeed case has become a flashpoint for national security hawks.
Meanwhile, some lawmakers are pressing for answers on why the Commerce Department paused its probe. Senator Bennet demands answers on the matter, adding to the bipartisan pressure on the administration.
The fallout continues as Huang's resignation and the allegations of espionage have raised questions about the effectiveness of U.S. export controls. The Senate Banking Committee's hearing is expected to provide a forum for these issues.
