Bessent Pushes Back On Need For Tighter Chip Sale Legislation

Treasury Secretary Scott Bessent pushed back Sunday on lawmaker claims that the U.S. needs stronger laws to clamp down on chip sales to China.

Momentum has been building on Capitol Hill to use a year-end defense bill to tighten U.S. export curbs on chip sales to China after revelations that Nvidia CEO Jensen Huang had an affair with an alleged Chinese spy. Proponents like Sens. Jim Banks (R-Ind.) and Elizabeth Warren (D-Mass.) argue legislation is necessary to close workarounds Chinese firms use to buy advanced U.S. chips.

On “Fox News Sunday,” Bessent disputed the idea that the U.S. needs additional legislation on the books, arguing that the latest national security threats stem from lax enforcement.

“I don't think we need the legislation,” Bessent told host Larry Kudlow. “We have all the rules we need, we just need them enforced.”

The latest comments underscore the tensions within the Trump administration over Commerce Secretary Howard Lutnick’s handling of Nvidia’s exports to Megaspeed — a Singapore-based company where Alice Huang, the alleged Chinese asset was an executive — which is suspected of smuggling chips to China.

Bessent on Friday said Lutnick had resisted entreaties from other cabinet-level officials to crack down on the company at the center of the espionage scandal. He doubled down on those claims Sunday, arguing that “many other departments were pushing for this,” but adding that “Commerce had the pen.”

Bessent also used the interview Sunday to demand answers from Nvidia, calling on company representatives to provide answers on whether it knew chip sales were reaching Chinese buyers.

“We will see if Nvidia intentionally ignored the warning signs of these shell companies, many of them in Singapore,” he said. “Was it a low level fail? Was it in the middle or was it up in the C-suite?”

Nvidia opened an investigation into the episode last week and hired law firm Wachtell, Lipton, Rosen & Katz to lead the probe.

“I think we need answers in the next 10 days from the board and from the outside counsel,” Bessent said Sunday.

Lutnick has overcome previous criticism over his handling of high-profile scandals like the Epstein files and enjoys a close, decades-old relationship with President Donald Trump. But the latest bipartisan scrutinyover his ties to Jensen Huang and his department’s failure to blacklist Megaspeed and sever its access to high-end chips are more intense, with criticism coming from inside the administration.

Republican and Democratic lawmakers are also both calling for Lutnick to testify on his handling of the national security risks.

On CBS’ “Face the Nation” Chair of the House China Select Committee John Moolenaar (R-Mich.) also raised questions about Lutnick’s decision-making and its implications on the U.S.’ ability to compete with Beijing on artificial intelligence.

“How do we win this competition with China when you have the Commerce Department and others not either enforcing or investigating questionable practices?” he said Sunday. “Why is it that export controls were so adamantly opposed by Commerce and to what degree did Jensen Huang influence that, and to what degree was he influenced by a Chinese national?”

Asked by host Margaret Brennan whether Lutnick should travel to China with the president this week or remain in the job, Moolenaar deflected.

“I will leave that up to the president,” he said, stressing Congress should remain focused over the next few weeks on getting tighter export controls into the year-end defense bill.

Context: House Speaker Mike Johnson (R-La.) last week became one of the highest-profile lawmakers calling for Congress to pass legislation to clamp down on chip sales to China. Huang had been a vocal critic of the effort. His resignation from Nvidia and departure from the lobbying fight could “change a few minds,” Johnson told reporters Thursday.

House Minority Leader Hakeem Jeffries (D-N.Y.), who is expected to become the next speaker of the House, is already pushing to use the year-end defense authorization bill to advance three proposals currently in the Senate bill.

The three measures under consideration would require high-end chips to come with tracking technology to prevent smuggling, give Congress a say on export licensing and tighten export curbs on chipmaking equipment — while pushing allies to do the same.

In his own interview on "Face the Nation," Rep. Jim Himes (D-Conn.), the top Democrat on the House Intelligence Committee, suggested that Democrats could cast an ever wider net to determine whether there is evidence of wrongdoing by Nvidia or Commerce Department officials by probing other companies and financial institutions.

"If banks were facilitating this stuff, they too need to be called to account," he told Brennan.