US Efforts to Block Nvidia Chips Could Trigger US-China Trade War
Washington efforts to block Beijing from accessing Nvidia chips could trigger a short-lived U.S.-China trade war that rattles markets, MarketWatch reported.
The policy push follows a spy scandal involving the chipmaker that has drawn intense scrutiny from lawmakers and federal officials.
“The U.S. policy response could easily cross Chinese red lines and destabilize the truce that’s held for the past year,” Wolfe Research analysts Tobin Marcus and Chutong Zhu said in a note reported by MarketWatch. “Or alternatively, it could happen based on the congressional export control proposals,” Wolfe Research analysts Tobin Marcus and Chutong Zhu said in a note reported by MarketWatch.
House panels investigating intelligence, foreign affairs, and China directed former Nvidia CEO Jensen Huang to appear on Dec. 1.
The same panels invited Nvidia general counsel Tim Teter for an interview on Dec. 2. Commerce Department undersecretary Jeffrey Kessler faces an invitation for a Dec. 3 interview.
Senate Banking Committee Chairman Tim Scott summoned Huang for a panel hearing on Dec. 3. Scott also requested that Commerce Secretary Howard Lutnick appear for a public hearing on Dec. 10.
The Commerce Department faces direct criticism from within the administration for failing to blacklist Megaspeed, a Singapore-based company at the center of the controversy, months earlier.
Treasury Secretary Scott Bessent pointed to the Commerce Department during a CNBC interview on Friday morning, stating that the Treasury, Defense, and State departments favored adding Megaspeed to the entity list earlier.
“You’ll have to ask them about their internal processes,” Bessent told CNBC. Prediction market Kalshi priced a 48% chance that Lutnick would leave his post by Dec. 1.
Nvidia shares dropped about 3% on Friday, extending a weekly loss to roughly 13%. The S&P 500 stock index fell by less than 1% but remained up for the week.
Nvidia announced that its board was probing whether Huang was targeted in a foreign-intelligence scheme. Huang admitted to an extramarital affair with a Megaspeed executive linked to possible Chinese intelligence assets, and he resigned as CEO on Thursday morning following reports of a separate affair with an Nvidia subordinate.