MAGA turns on Lutnick amid China spy scandal
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Commerce Secretary Howard Lutnick. Photo: Thierry Monasse/Getty Images
Commerce Secretary Lutnick has become the face of the Trump administration's troubled response to Chinese espionage and potential national security threats.
- The most intense scrutiny is coming from Republicans on the Hill, fellow Cabinet members and the MAGA base.
Why it matters: Regulators and policymakers on both sides of the aisle want someone's head for an affair that may have exposed sensitive technology to the nation's top foreign adversary.
- Two names are currently at the top of that list: former Nvidia CEO Jensen Huang — and now Lutnick.
The big picture: Over the past year, Lutnick slow-walked broader administration efforts to address suspicions that Singapore-based company Megaspeed was illegally diverting chips to China, Axios first reported.
- Administration officials had pushed to place Megaspeed on the Commerce Department's Entity List, which would have restricted exports of U.S. tech to the company.
Driving the news: On Friday, Treasury Secretary Scott Bessent confirmed as much.
- "Treasury, War, USTR, and State — they were in favor of putting Megaspeed on the Entity List for months, but Commerce has the pen," Bessent said on CNBC.
- Trump himself supported taking action on three occasions, but those efforts were delayed by Lutnick, Axios reported.
There's a widespread belief in Trump's broad circle of advisers that the Nvidia scandal might be too much for Lutnick to survive — but Trump is standing beside him for now.
- Behind the scenes, the White House has not expressed concern regarding efforts to have Lutnick testify before Congress.
- MAGA commentators are also tearing Lutnick apart on shows like "War Room with Steve Bannon," while Republican senators openly take him to task.
For the record: "Secretary Lutnick plays a fundamental role in advising the President across many different industries. The reports you have issued are inaccurate and false and literally misstate the topic, creating a false impression," the Commerce Department said in response to Axios' inquiries.
Friction point: The brewing scandal hangs in part on a CIA warning that Jensen Huang was having an affair with Alice Huang, who ran Megaspeed and was also alleged to be a Chinese spy.
- That warning appears to have been ignored by Commerce Department officials, sources told Axios.
Context: Last fall, CIA intelligence indicated Huang was the target of the espionage, which was reported in a "book" assembled by the Office of the Director of National Intelligence for a small circle of administration officials with top secret clearance, according to sources familiar with the matter.
- In March, Secretary of State Marco Rubio, who's also White House national security adviser, compiled a memo about the issue to ensure that Cabinet officials with "equities" in Nvidia and AI were informed, one of those sources said.
- "The memo was made so that Lutnick and Bessent and others knew what was up," said one source.
- "Howard was given the memo. He ignored the memo," a second source said.
In May, as Trump traveled to China aboard Air Force One, Rubio verbally briefed the president as a "reminder," one of the sources said.
Reality check: Through it all, Trump has repeatedly been in Lutnick's corner.
- The president has defended Lutnick time and again, whether over tariffs, immigration or the latest China tussle.
- There are no indications Trump has changed his stance since publicly defending Lutnick on Thursday.
The bottom line: While Trump continues to defend Lutnick, administration officials and congressional Republicans have clearly picked a target.
