Trump imposes 25% tariff on advanced AI chips
What's the story
The Donald Trump administration in the US has imposed a 25% tariff on advanced artificial intelligence (AI) chips, including NVIDIA's H200 and AMD's MI325X. The decision comes as part of a broader strategy to reduce US dependence on foreign chip manufacturing and boost domestic semiconductor production. The move is also seen as an effort to address national security concerns related to the reliance on overseas supply chains for high-tech components.
Revenue generation
Tariff revenue and restricted NVIDIA sales to China
The new tariff will help the US government earn revenue while allowing NVIDIA to resume limited sales of certain chips to China. The decision is part of a broader strategy aimed at encouraging chipmakers to produce more semiconductors in the United States. Currently, most advanced chips are manufactured overseas, making the US heavily reliant on foreign supply chains for its semiconductor needs.
Industry impact
Tariff's impact on semiconductor industry and potential future measures
The White House has clarified that the tariff is targeted and only applies to certain high-end chips, not all foreign-made semiconductors. However, wider tariffs on semiconductors and their derivatives could be imposed in the future to further promote domestic manufacturing. This move comes as Trump has been vocal about his tough stance on semiconductor imports, even suggesting last year that he could impose tariffs as high as 100% on companies refusing to shift production to the US.
Exemptions
Tariff exemptions and revised US chip export rules for China
The 25% tariff applies to advanced chips such as NVIDIA's H200 and AMD's MI325X. These are among the chips NVIDIA plans to sell to approved customers in China, meaning companies will have to pay the tariff before completing such sales. However, the White House has said that chips imported for US data centers, start-ups, non-data-center consumer applications, civil industrial uses, and public-sector applications will be exempt from this new tariff regime.
Company response
NVIDIA welcomes tariff decision
NVIDIA has welcomed the administration's decision, especially its move to allow Commerce Department-approved H200 chips to be sold to select Chinese customers. "The Administration's critics are unintentionally promoting the interests of foreign competitors on US entity lists. America should always want its industry to compete for vetted and approved commercial business, supporting real jobs for real Americans," an NVIDIA spokesperson said in an email.