U.S. President Donald Trump has reportedly signed off on a crackdown targeting companies suspected of smuggling Nvidia chips to China on three separate occasions this year, yet the proposed measures have never been implemented. According to an Axios report cited by Coin Bureau, the effort has stalled amid resistance from Trump's own Commerce Secretary, Howard Lutnick, who warned the action could trigger a trade war with China.

The restrictions under consideration target firms suspected of facilitating the illegal transfer of Nvidia's advanced artificial intelligence chips to China. Such transfers run against U.S. export controls that restrict China's access to Nvidia's most advanced AI processors, placing intermediaries suspected of moving the chips squarely within the scope of federal technology-enforcement policy. Although Trump has repeatedly approved the crackdown, Lutnick has reportedly opposed moving forward, exposing a disagreement within the administration over how aggressively to address the suspected technology transfers.

Trump Repeatedly Approved Action Against Suspected Smuggling

Axios reported that Trump approved the proposed crackdown on three occasions this year, but the enforcement measures have yet to materialize. The most recent push reportedly came after a conversation last week involving Trump and Elon Musk, who had backed the proposed action. Trump contacted Musk during that exchange and then directed officials to move forward with the plan.

Coin Bureau cited Trump's reported statement to officials: "Let's get it done."

Despite the presidential directive, Lutnick remained the only official identified in the report as opposing the crackdown. His position reportedly reflects concerns about the potential economic and diplomatic consequences of imposing restrictions on companies suspected of supplying Nvidia chips to China.

Howard Lutnick Warns of Potential Trade War With China

Lutnick reportedly argued that implementing the proposed restrictions could escalate tensions between Washington and Beijing. According to the report, the Commerce Secretary warned that the crackdown "will start a trade war with China." His opposition has reportedly prevented the administration from carrying out a measure Trump has already approved multiple times.

The standoff highlights competing considerations within the administration: restricting suspected transfers of advanced semiconductor technology while avoiding further deterioration in U.S.-China trade relations. How officials resolve that tension carries implications for both U.S. technology enforcement and the broader economic relationship with Beijing.

Classified Memo References Jensen Huang and Suspected Chinese Spy

The report also contains another sensitive detail involving Nvidia chief executive Jensen Huang. Lutnick had reportedly received a classified memo in May concerning Huang's relationship with a woman suspected of being a Chinese spy.

The memo's existence adds another dimension to the reported discussions surrounding Nvidia, China and national security. However, the information shared by Coin Bureau does not establish the contents of the classified document or provide further details about the alleged relationship.

Megaspeed Could Face Blacklisting

If the proposed crackdown moves forward, companies such as Megaspeed could face blacklisting, according to the report. Megaspeed was identified as the company at the center of the scandal involving suspected Nvidia chip smuggling.

Blacklisting could restrict a company's access to Nvidia's chips, potentially preventing it from obtaining the semiconductor products targeted by the proposed enforcement measures. Any such listing would also serve as a visible indicator of whether the repeatedly approved but stalled crackdown has actually moved forward.

The proposed action remains unimplemented despite Trump's reported approval on three occasions this year. With Lutnick warning of a potential trade war with China and Trump again telling officials to proceed last week, the dispute over the crackdown remains unresolved.