Nvidia scandal reignites US-China trade tensions

The Nvidia scandal involving former CEO Jensen Huang threatens to reignite trade tensions between Washington and Beijing, potentially escalating into a new conflict between the world's two largest economies. The affair has exposed divisions within the Trump administration over semiconductor export policy, with Treasury Secretary Scott Bessent revealing his department has long advocated blacklisting Singapore-based Megaspeed, suspected of giving Chinese firms access to advanced US processors. Huang's departure removes a key advocate for easing trade restrictions with China. If espionage suspicions are confirmed, Washington may tighten export restrictions and target foreign data centers, likely prompting Chinese retaliation on rare earth minerals. The upcoming Trump-Xi meeting on November 18-19 could signal whether both leaders will defuse this new source of tension, though the timing is poor for a semiconductor sector already facing market corrections and AI investment doubts.