His position is not a call to shut the door forever. Bessent has signaled some flexibility about letting older Nvidia chips into China as they lose their edge.
In November 2026, Bessent confronted Commerce Secretary Howard Lutnick over delays in blacklisting Megaspeed. The company is accused of rerouting advanced Nvidia chips to China. Estimates put the volume at hundreds of thousands of H100-equivalent units, valued in the billions.
Cabinet secretaries do not usually air disagreements about entity lists. When the Treasury chief is pressing Commerce on an enforcement timeline, it suggests the debate has moved well past routine paperwork.
The episode also reflects intelligence concerns about Nvidia’s leadership and its alleged connections to companies like Megaspeed. Those connections remain allegations, but they have added pressure to an already tense policy area.
How we got here
US export controls on Nvidia chips began in August 2022. The first round targeted the A100 and H100 models, cutting China off from what were then the company’s most capable AI processors.
The rules have grown more layered since. Washington introduced case-by-case licensing reviews for newer models, starting with the H200. China-specific chip variants were introduced from January 2026, designed to sit beneath the regulatory thresholds.
Nvidia’s Blackwell chips remained under strict export controls as of late 2025.
Rules on paper, however, have not stopped chips from moving. By mid-2026, an estimated 1–1.2 million H100-equivalents had been smuggled into China.
The Trump administration has tried to plug those holes. President Trump approved crackdowns on chip diversion in May, August, and November 2026. Implementation has run into resistance, both inside the government and outside it.
What this means
The Bessent and Lutnick clash shows the split is not just theoretical. Treasury appears focused on closing enforcement gaps fast, while Commerce, which handles blacklisting, has moved more slowly on Megaspeed.
A few things are worth tracking. The first is whether Megaspeed lands on a blacklist, and how quickly. A delay would signal that commercial considerations still carry real weight in Commerce’s decisions.
The second is where the ceiling moves over time. Bessent’s openness to older chips implies the H100 line is not permanent. If Washington eventually lets H100-class hardware flow more freely, the next fight will be over the H200 and whatever sits above it.
The third is enforcement capacity. Smuggling estimates in the range of 1–1.2 million H100-equivalents suggest the bottleneck is not a lack of rules. It is the ability to follow chips through shipping routes, shell companies, and third countries.
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