Nvidia affair will hang over Trump’s upcoming trip to Asia-Pacific

PHILADELPHIA – The Nvidia affair is threatening to hijack President Donald Trump’s trip to Asia even before he boards the Air Force One.The administration is on the backfoot, forced to defend how America’s most precious AI technology has been leaking into China and to identify who is responsible.The mounting outrage at the perceived squandering of the US competitive edge over China is also shattering the remarkable cohesion observed so far in the Trump Cabinet.Treasury Secretary Scott Bessent on Nov 13 publicly blamed the Department of Commerce, led by former Wall Street executive Howard Lutnick, for failing to add Megaspeed to the US export blacklist despite months of pressure from the Treasury, Defence and State departments.Lutnick has not publicly explained his decision but has agreed to testify on Dec 10 before Congress where China hawks, including some members of Trump’s Republican Party, want to know how Chinese companies have been obtaining top-end US chips which are restricted for export to China.Megaspeed, a Singapore-based cloud computing and data centre company that supplies AI computing power across the Asia-Pacific, is part of the puzzle.Carved out in 2023 from a Chinese gaming company, it reportedly bought US$4.8 billion (S$6.2 billion) worth of Nvidia’s coveted high-end chips and let Chinese clients like Alibaba access them via remote servers situated in Malaysia and Indonesia. It also allegedly diverted some of the chips to China.Nvidia’s longtime chief executive officer Jensen Huang resigned from the position on Nov 12 after admitting to an extramarital affair with Megaspeed’s former top executive Alice Huang, a Chinese businesswoman believed by the US to be a spy.All the unanswered questions about Nvidia’s relationship with Megaspeed are creating an awkward moment for Trump who had defended Huang as an “honourable” man after the scandal broke. Trump also claimed not to have known about the espionage concerns.The fallout threatens to follow Trump across the Pacific next week and hang over his interactions with Chinese President Xi Jinping. Beijing has threatened retaliation if the US imposes fresh curbs on the sales of cutting-edge chips central to its own ambitions for creating an unrivalled AI economy.Trump’s first stop in Asia, to attend the Nov 16-17 meetings on the sidelines of the annual ASEAN summit in Manila, will be the first opportunity to change the conversation.It’s the stop to watch, said Victor Cha, the president of the geopolitics and foreign policy department at the Center for Strategic and International Studies in Washington.To get ASEAN to pivot towards US AI stack“A part of the aspiration, at least on the administration side, and I don’t know whether this has been accepted among the South-east Asian countries, is to try to get current or future commitments by ASEAN countries to incline themselves towards the US AI stack,” Cha said at a briefing for journalists on Nov 9.The US would incentivise that by leveraging development assistance, he added. “So it really is commercial diplomacy, as the administration likes to talk about it, at its finest,” he said.Meetings with ASEAN leaders could also yield some progress on unfinished trade deals with Vietnam and Thailand, giving him something to show for his tariff-heavy diplomacy.Talks with Indian Prime Minister Narendra Modi, also in Manila for Asean-India meeting, could help revive another elusive prize - the US-India trade deal.For both leaders, a credible signal of progress would be useful. Trump could point to movement on a major agreement while Modi could achieve a greater consistency in a relationship buffeted by the American President’s blow hot, blow cold approach of the last two years.First leader-level Quad summit of Trump’s second termOn the sidelines, the first leader-level Quad meeting of the Trump administration would generate headlines too. A closed-door huddle between Trump and the prime ministers of Australia, Japan and India would telegraph strength in Washington’s regional partnerships even as Trump heads into his fourth meeting with Xi since he began his second term.“The first Quad leader-level summit of the second Trump administration will be big on pomp and show,” said Aparna Pande, a senior fellow at Hudson Institute where her work focuses on India and South Asia.The main aim will be to argue that Quad is still a key minilateral partnership which has the attention of this American administration, she said.“As with every leader-level summit, it is possible that announcements will be made about some projects and activities being undertaken by all four countries,” she added. Such projects could include collaboration on maritime surveillance and a joint mechanism to map semiconductor and AI supply chain bottlenecks.During the first two years of Trump’s administration, the Quad meetings and activities have been primarily operational and tactical and have lacked a strategic overhang, said Pande.“This administration has the opportunity, especially with an incoming Democratic Congress, to refocus on the Indo-Pacific and the Quad,” she added.A separate meeting with Japanese Prime Minister Sanae Takaichi would offer reassurance to Washington’s closest Asian ally that is being tested by Beijing.Apec, as well as the summit between Trump, Xi and PutinUntil the Nvidia affair unsettled everything, the Apec meet in Shenzhen (Nov 18-19) was expected to be a relatively low key affair. It still could be, given the incongruity between APEC, essentially a trade liberalisation engine, and the torrent of Trump’s tariffs.The summit between Trump and Xi, however, retains an ability to startle. Most analysts in Washington had written off that encounter as low-yield given that the real payoff is likely to arrive a month later in Miami at the G-20 leaders meeting.The extension of a US-China trade truce - which expires on Jan 10 - will be talked about, but initialled only on home ground, when Trump hosts G-20 leaders at his Doral property. The US will also press Beijing to deliver on its previous rare earth commitments, expressing frustration over delayed shipments and slow implementation from their Busan trade agreement, struck on Oct 30, 2025, in South Korea’s Busan, on the sidelines of an APEC Summit.In Congress, there are are renewed calls for more restrictions on chip exports to China which may force Trump to go along even if he holds the veto power.“I do think the Nvidia scandal will complicate President Trump’s upcoming meeting with Xi Jinping,” said Chris Miller, an economic historian and the author of the 2022 bestseller “Chip War”.“It comes as the US government was already frustrated with China’s ongoing restrictions on rare earth exports to the US and Japan. The tentative truce between the two countries looks increasingly shaky,” he said,But even the chip dispute could be overshadowed by the real showstopper of the tour: the Nov 19 summit between Trump, Xi and Russian President Vladimir Putin.The leaders will talk about the Iran war and nuclear non-proliferation, the White House said. But Trump will steer away from discussing Ukraine, a senior US official told US media on the condition of anonymity.Trump believes it could yield a new agreement between the world’s biggest nuclear-armed states. But Xi would have his own calculations. China has little reason to adopt Trump’s arms control priorities merely to help him claim a diplomatic victory. Hosting the three-leader meeting, however, would be a prize in itself. Beijing could present China as the place where the world’s most consequential disputes must come to be settled.“It’s a bold step and many in the United States, in Japan, in Australia, in Europe will criticise President Trump for doing that,” said Kurt Tong, a former US ambassador to APEC who is now with The Asia Group, a geopolitical consulting firm based in Washington DC.“His response will be that ‘I know what I’m doing. I’m bringing my adversaries to the table and talking to them with respect, and that’s better for the planet.’ It’s going to be highly controversial,” Tong said.“For China, this is great because President Xi looks good. He’s the convener, this could only happen in China,” he said.“The big winner in that meeting is Putin because it legitimises him as someone with a standing equivalent to the two much more powerful countries,” he added.Postures and picturesThe photographs might outlast anything the leaders agree on. That would suit a host intent on advertising China’s status and a visiting American president hungry for history-making takeaways.Less likely is a Trump-Kim Jong Un meeting. Trump will not cede what Kim seeks - an acknowledgement of Pyongyang as a nuclear power. Diplomats note that no “slack” has been created in Trump’s schedule to allow for this to happen.But Trump’s desire to normalise ties with North Korea has long been on his agenda. It presents a legacy-making opportunity that no other US president has come close to.Devoid of grand spectacles, Trump may find that a trip that was meant to showcase the power of the US president to make his mark in foreign policy - even after an election drubbing - will expose the limits of that power.