US President Donald Trump has announced new tariffs on Nvidia and AMD as part of a novel scheme to enact a deal with the technology giants to take a 25 percent cut of sales of their AI processors to China.
In December, the White House said it would allow Nvidia to start shipping its H200 chips to China, reversing a policy that prohibited the export of advanced AI hardware. However, it demanded a 25 percent cut of the sales.
The new US tariffs on certain chips, announced on Wednesday, were designed to implement these payments and protect the unusual arrangement from legal challenges, according to several industry executives.
The move enacts the latest element of Trump’s transactional trade policy and allows the government to profit from a change to its export controls.
“We’re going to be making 25 percent on the sale of those chips, basically. So we’re allowing them to do it, but the United States is getting 25 percent of the chips in terms of the dollar value. And I think it’s a very good deal,” Trump said in the Oval Office on Wednesday.
A White House factsheet said the new tariff would apply to chips such as the H200 and rival AMD’s MI325X that were first imported into the US and “transshipped” back to customers around the world. It would also cover other US companies seeking to send AI chips abroad.
Nvidia and most of its US peers rely on Taiwan Semiconductor Manufacturing Company to manufacture the chips they design, including the H200, an advanced AI processor that belongs to an older generation of Nvidia hardware.
Chips that are imported to the US to build out the country’s domestic AI infrastructure would not be subjected to a levy, according to a presidential proclamation released on Wednesday.
The new duties are part of a sweeping national security probe launched by the Trump administration last year as the president kicked off a trade war against major US partners, roiling global markets.
These so-called Section 232 tariffs rely on a different legal basis from the emergency powers invoked by Trump to impose other global levies, which face a looming Supreme Court challenge.