Trump Cabinet brawl: Scott Bessent throws Howard Lutnick under the bus

Treasury Secretary Scott Bessent appeared on "Squawk Box" Friday and quickly threw President Donald Trump's Commerce Secretary under the bus.

Speaking to Co-host Joe Kernen, Bessent said that the Commerce Department was clearly responsible for the delay in labeling the AI chip manufacturer Nvidia and its customer Megaspeed as possible national security threats.

"I can tell you there was coordination," Bessent said, citing the Treasury Department, The Department of Defense, U.S. Trade Representative and State Department. "They were in favor of putting Megaspeed on the entity list for months. But Commerce has the pen. Commerce BIS (Bureau of Industry and Security) has the pen, and you will have to ask them about their internal processes."

Co-host Rebecca Quick asked whether he was "frustrated" and if he thinks there will be tighter controls on these chips in the future.

"Well, Becky, I am frustrated when President Trump made it very clear that China should not receive any Nvidia chips above H-100s. And so any leakage is very frustrating because it hurts our great companies in the AI race and gives the Chinese an advantage," said Bessent.

Kernen asked if that meant that Treasury would take over the matter if Commerce refuses to act to regulate the chip manufacturers, but Bessent said the Trade Commission would likely be the one to put restrictions on.

Bessent wouldn't confirm or deny the conversation in the Situation Room with Lutnick about the other branches demanding he enforce rules on these companies and flag them as a national security concern. He also wouldn't say what he would do if he were the commerce secretary.

"I'm going to say the Treasury secretary, Treasury [Department] and my deputy have been pushing for this for months. At the deputy level," Bessent said.

Kernen asked if Congress should step in and act in the absence of regulations, but Bessent returned to Lutnick.

"Yeah, Joe, I think we have all the authorities that we need. They just need to be implemented," Bessent said. "And what I would say is up to the H-100, that's not a technological advantage."

When asked about the economy, he maintained the status quo was the smart move. "I'm quite confident that the economy is in very good shape, and there's nothing that's setting off any alarm bells for me right now."

Lutnick has been under pressure to explain how these chips were able to be exported to a company linked to a Chinese spy.

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