Bessent says "Commerce has the pen" on Megaspeed. Lutnick now has to tell senators why it went unused
Future Times5 min read
In 30 seconds
The Treasury Secretary has publicly laid the failure to blacklist the Nvidia customer at Commerce's door, days before Trump sits down with Xi. Traders now see Lutnick's exit this year as close to a coin flip, and Bessent's as a long shot.
- Commerce has added no company to the Entity List since 9 October 2025, the gap Bessent's agencies say they pushed to close
- Lutnick testifies to the Senate Banking Committee on 10 December, a week after Huang is asked to appear
- Traders now rank Lutnick the cabinet member most likely to leave, ahead of Noem and Hegseth
What it means
- Stocks and sectorsA Commerce Department in turmoil makes China licensing less predictable for Nvidia and other chip exporters.
- BusinessCloud and data-centre operators in Singapore and South-East Asia that buy Nvidia hardware face the most direct…
- PoliticsBessent has put the other national-security agencies on the record against Commerce.
- GeopoliticsWith sanctions unlikely before the summit and officials keeping the spy allegations off the agenda, the feud is more…
What to watch
- 3 DecHuang's requested Banking Committee appearance on 3 December
- 10 DecLutnick's on 10 December
The odds
Polymarket · live, 06:36 GMTHoward Lutnick leaves Commerce by 31 December
up 23 points over 7dfrom 21% a week ago46% when this was published
What would move these odds
- Lutnick's 10 December Senate testimony going badly, or Republicans breaking ranks, would push the odds up
- A Commerce move to list Megaspeed before the Shenzhen summit could ease pressure
- Public backing from Trump during the China trip would cut them
Now · 44%
Think the market's wrong? Add your forecast and see who's closer.
- Who will leave Trump Administration before 2027: Howard Lutnick43%up 26 points
- Who will leave Trump Administration before 2027: Scott Bessent8%unchanged
- Who will leave Trump Administration before 2027: Pete Hegseth17%down 22 points
Scott Bessent chose his words carefully on Friday, and they still landed squarely on a cabinet colleague. Asked in a television interview who was responsible for the administration's failure to blacklist Megaspeed, the Singapore-based Nvidia customer US officials suspect of routing advanced chips to China, the Treasury Secretary said Treasury, War, the US Trade Representative and State "were in favor of putting Megaspeed on the Entity List for months, but Commerce has the pen."
He declined to comment on reported tensions with Howard Lutnick, the Commerce Secretary. He did not need to. The day before, Lutnick's office said he had "proactively agreed to appear voluntarily" before the Senate Banking Committee, where a US official says he is due on 10 December.
The feud runs through three stories at once: the export-licence regime Commerce controls, Nvidia's China business and the Jensen Huang affair, and Donald Trump's summit with Xi Jinping in Shenzhen next week. Traders have drawn their conclusion. They see Lutnick's departure this year as close to a coin flip, and they treat the man who made the accusation as far safer.
One department, one blacklist, one empty year
The Entity List is Commerce's most direct tool for cutting a foreign company off from American technology, and it has gone quiet. The Federal Register shows the Bureau of Industry and Security's last rule adding companies to the list was published on 9 October 2025. Megaspeed is not on it.
That silence has become the centre of the Huang affair. Megaspeed was previously led by Alice Huang, whom US officials suspect of being a Chinese spy and with whom Jensen Huang had an affair. Nvidia's board accepted Huang's resignation on 11 November; Colette Kress, the finance chief, is interim chief executive. The Banking Committee chairman, Tim Scott, has asked Huang to appear on 3 December.
Axios reported on 11 November that Bessent had confronted Lutnick in a White House Situation Room meeting the previous week, asking "How come Megaspeed isn't on the entities list?" According to the outlet's sources, Lutnick replied: "I don't know. I'll look into it." The same sources said Lutnick had received a memo on Megaspeed drafted under Marco Rubio, the Secretary of State and national security adviser, in May, and had resisted acting on it out of concern about escalating the trade war with China. Commerce rejected the account at the time. "This is false. Secretary Bessent and Secretary Lutnick had no such conversation," said Kristen Eichamer, a department spokesperson. Commerce did not respond to requests for comment on Bessent's remarks on Friday.
Republicans are no longer staying quiet. Jim Banks, an Indiana Republican on the Banking Committee, told Fox News that Commerce had "used loopholes to allow some of these chip sales to occur."
Traders have priced the feud, and its target
On 14 November traders put the chance that Lutnick is out as Commerce Secretary by 31 December at 45.5%, up 23.5 points in a week.
A second market, on who leaves the administration before 2027, gives Lutnick 40%, up nearly 20 points over the same week. That makes him the cabinet member traders now see as most likely to go, well ahead of Kristi Noem at 19% and Pete Hegseth at 16.5%, whose odds have fallen by 15 points since the House shelved his impeachment.
Bessent's chance of leaving before 2027 rose four points on Friday, to 9.3%. That sounds like a penalty for going public, but it leaves him roughly where he stood a week ago. The asymmetry is the story: traders read the dispute as a problem for the official who holds the licensing pen, not for the one pointing at it.
Nvidia's succession is unsettled too: traders give 24.5% to a permanent chief executive being named by 31 December, and split the eventual choice between Ian Buck at 23.5% and Arm's Rene Haas at 21%.
The summit will not wait for the inquiry
Trump leaves for Manila on Monday and then travels to Shenzhen, where he is due to hold talks and a working lunch with Xi on Thursday, followed by a first three-way meeting with Xi and Vladimir Putin. US officials said they do not expect the Huang affair to affect the trip, nor Trump to raise the allegations against Alice Huang with Xi. Traders put a meeting with Xi by 30 November at 98.6%: the diplomacy is not in doubt.
What traders do not expect is a sharp turn against Beijing before then. The chance of new US sanctions on China by 30 November stands at 9.5%, on only about $26,000 of trading, so it is a faint signal. It fits officials' description of a bilateral focused on implementing the trade agreement, not escalation.
Why Lutnick could still survive
The case against the market is real. Many Republicans are still publicly defending Lutnick. "This guy has nine lives," a person close to the White House told Semafor, before adding: "How many does he have left?" Bessent stopped short of naming Lutnick, and Commerce has flatly denied the Situation Room account, which rests on unnamed sources. A swift listing of Megaspeed, or a strong Senate appearance, would blunt the charge; public backing from Trump would do more.
What it means for markets, business and politics
Stocks and sectors A Commerce Department in turmoil makes China licensing less predictable for Nvidia and other chip exporters. A new secretary could tighten the pace of Entity List additions that has stalled since October 2025, putting sales routed through Asian intermediaries at greater risk.
NVDABusiness Cloud and data-centre operators in Singapore and South-East Asia that buy Nvidia hardware face the most direct compliance risk. Megaspeed is the test case for whether Commerce starts listing such resellers again.
Politics Bessent has put the other national-security agencies on the record against Commerce. That narrows Lutnick's defence before 10 December to a question of process he must explain himself.
Geopolitics With sanctions unlikely before the summit and officials keeping the spy allegations off the agenda, the feud is more likely to change who runs export policy after Shenzhen than what Trump says to Xi there.
What to watch
Trump's meeting with Xi on Thursday; Huang's requested Banking Committee appearance on 3 December; Lutnick's on 10 December; and any Federal Register notice adding Megaspeed to the Entity List, which would be the first additions in more than a year.
Bessent has told Washington who holds the pen. Lutnick now has a month to explain why it stayed in his pocket.