Magic Trackpad Lagging When Video Plays in Browser (MacBook Pro 13-inch 2018)

My new Magic Trackpad (2021) lags when I play video on any site in both Chrome and Safari. I have tried the following

• turning off / on Bluetooth
• turning off / on Magic Trackpad power
• restarting computer
• resetting the NVRAM
• checked Ignore Built-In Trackpad ( System Pref / Accessibility / Pointer Control )

It is very strange. As long as video is playing it is practically impossible to aim the curser. When video is paused it works perfectly.

Does anyone have any clues on how to fix this?