It is reported that Treasury Secretary Scott Besant and Commerce Secretary Howard Rutnick clashed at the White House over sanctions against Megaspeed, a Singaporean company involved in Nvidia's 'Jensen Huang scandal'.
In particular, controversy is spreading as suspicions are raised that Minister Rutnick has delayed export control measures against companies suspected of illegally exporting semiconductors to China, such as Megaspeed, despite requests from other ministries within the administration.
◇ Besant “Why aren’t they sanctioning Megaspeed?”… Rutnick: “Let’s check with Trump.”
According to reports from the New York Times (NYT) and Axios on the 11th (local time), Secretary Besant asked Secretary Rutnick at a White House situation room meeting on the 5th why Megaspeed was not placed on the Commerce Department's 'Entity List'.
When Secretary Besant asked, "How is it that Megaspeed is not on the restricted trading list?" Secretary Rutnick hesitated and then replied, "I don't know. I'll find out," Axios reported.
The NYT reported that Secretary Rutnick responded to Secretary Besant to the effect that the Commerce Department can now quickly take action to restrict exports of Megaspeed.
According to additional reporting by Axios, Secretary of Defense Pete Hegseth, Secretary of State Marco Rubio, and U.S. Trade Representative (USTR) Jamison Greer were also present at the meeting.
Other attendees agreed with Secretary Besant's position, and Secretary Rutnick seemed to agree, but then said in a low voice, "I'll have to check with the President."
In response, one participant asked, "Okay. Then why don't we do it today?" and the participants moved to the President's office around 5 p.m. and reported related issues to President Trump.
◇ “Trump approves sanctions on Megaspeed...Rutnick ‘come up with several measures and report again’”
On this occasion, President Trump called Tesla CEO Elon Musk and asked for his opinion, and Musk reportedly supported the position of Secretary Besant, Rubio, Hegseth, and Representative Greer that export controls on Megaspeed and other vehicles should be strengthened.
Secretary Rutnick was concerned that the measure would "trigger a trade war with China," but President Trump ultimately approved the move, saying "Let's get it done," Axios reported.
However, after the office meeting, Minister Rutnick reportedly proposed additional review, saying, "I will come up with several measures and report back."
One source said other attendees protested, saying, "The decision has already been made, so just do it."
Megaspeed is a company that has been promoting data center business targeting Chinese customers in Southeast Asia by purchasing large quantities of Nvidia's artificial intelligence (AI) semiconductors.
The United States has been restricting the export of advanced AI semiconductors to China since the end of 2022, and U.S. authorities have been investigating the possibility that Megaspeed bypassed these regulations and illegally exported Nvidia's semiconductors to China.
In particular, controversy spread recently as it was revealed that Jensen Hwang, CEO of the American AI semiconductor company NVIDIA, had an affair with Alice Hwang, a former Megaspeed executive.
With reports coming out that U.S. intelligence authorities are determining Alice Huang to be a spy for the National Security Agency, China's intelligence agency, voices are growing in the U.S. that export controls to China should be strengthened along with concerns about the leak of advanced semiconductor technology to China.
◇ Trump administration spreads controversy over delay in megaspeed sanctions
Exporting American products to companies on the Commerce Department's restricted trade list requires prior permission from the U.S. government.
However, even though the White House and intelligence officials have been demanding action on Megaspeed since the fall of last year, Secretary Rutnick and senior officials at the Department of Commerce reportedly did not accept it.
The plan to place Megaspeed on the restricted trade list was previously discussed at a vice-ministerial meeting, but then-Deputy Secretary of Commerce Jeffrey Kessler reportedly withheld judgment, saying it was a matter for Secretary Rutnick to decide.
NYT reported that as the Commerce Department delayed action, dissatisfaction spread within the administration and eventually led to a conflict between the two ministers.
However, a Commerce Department spokesperson denied reports of the conflict, saying, "Secretary Bessant and Secretary Rutnick have never had such a conversation." He also emphasized that whether or not a company should be listed on the trade restriction list is a matter decided at the administrative level, not solely by the Ministry of Commerce.
This conflict arose while the Trump administration's semiconductor export control policy was on the chopping block due to the so-called Jensen Huang scandal.
Secretary Rutnick is said to have previously circulated a top-secret administration memo warning about the relationship between Jensen Huang and Alice Huang. Secretary of State Marco Rubio reportedly reported this memo to President Donald Trump during his visit to China in May.
Even in this situation, controversy surrounding the administration's response is growing as it becomes known that the Department of Commerce has approved the sale of Nvidia semiconductors to China and delayed action on Megaspeed.
Axios reported that last May, Treasury Secretary Bessant and Defense Minister Hegseth urged Minister Rutnick and Deputy Minister Kessler to take related action, but they refused.
