US President Donald Trump has announced new tariffs on Nvidia and AMD, with the aim of securing a 25% cut in sales of their AI processors to China. The US government will impose a tariff of up to 25% on certain chips imported into the US and then transshipped to other countries.
As part of a broader national security probe launched by Trump last year, the White House has allowed Nvidia to start shipping its H200 chips to China, reversing an earlier policy that prohibited the export of advanced AI hardware. However, the government demands a 25% cut in sales as a condition for this move.
The new tariffs were designed to implement these payments and protect the unusual arrangement from legal challenges, according to industry executives. Trump said he believes it's a "very good deal" for the US, with the country getting 25% of the dollar value of chip sales.
Nvidia relies on Taiwan Semiconductor Manufacturing Company (TSMC) to manufacture its chips, which are then shipped to other countries to be used in servers and devices. The company has committed to spending $500 billion over four years on manufacturing its products in the US, with TSMC building a new facility in Arizona as part of a $165 billion investment project.
However, it's unclear whether China will grant access to the H200 chips. Beijing is pushing tech companies to use domestic chips in a bid to achieve self-sufficiency in semiconductor production. Chinese customs officials have recently told logistics companies not to submit clearing requests for H200 chips, though it's unclear whether this directive is temporary.
Nvidia has welcomed the US move, saying Trump's policy "strikes a thoughtful balance that is great for America." AMD said it complied with all US export laws and policies. The White House on Wednesday also unveiled the results of an investigation into critical minerals, concluding that US dependence on imports posed a national security threat.
The new tariffs are part of a broader effort to address the risks associated with China's dominance in the market for critical minerals, including rare earths. The White House said the president might take other action to address these risks if deals were not done within 180 days.
As part of a broader national security probe launched by Trump last year, the White House has allowed Nvidia to start shipping its H200 chips to China, reversing an earlier policy that prohibited the export of advanced AI hardware. However, the government demands a 25% cut in sales as a condition for this move.
The new tariffs were designed to implement these payments and protect the unusual arrangement from legal challenges, according to industry executives. Trump said he believes it's a "very good deal" for the US, with the country getting 25% of the dollar value of chip sales.
Nvidia relies on Taiwan Semiconductor Manufacturing Company (TSMC) to manufacture its chips, which are then shipped to other countries to be used in servers and devices. The company has committed to spending $500 billion over four years on manufacturing its products in the US, with TSMC building a new facility in Arizona as part of a $165 billion investment project.
However, it's unclear whether China will grant access to the H200 chips. Beijing is pushing tech companies to use domestic chips in a bid to achieve self-sufficiency in semiconductor production. Chinese customs officials have recently told logistics companies not to submit clearing requests for H200 chips, though it's unclear whether this directive is temporary.
Nvidia has welcomed the US move, saying Trump's policy "strikes a thoughtful balance that is great for America." AMD said it complied with all US export laws and policies. The White House on Wednesday also unveiled the results of an investigation into critical minerals, concluding that US dependence on imports posed a national security threat.
The new tariffs are part of a broader effort to address the risks associated with China's dominance in the market for critical minerals, including rare earths. The White House said the president might take other action to address these risks if deals were not done within 180 days.
just did some crazy research and it turns out, Nvidia's H200 chip sales to China are already at a 20% reduction since they started shipping to Beijing 
. And the US is like "nope, you gotta cut that number in half" 
. Meanwhile, AMD's share price dropped by 10% after this announcement 
. I also found out that the Chinese government is looking at replacing Nvidia with domestic chip makers and it could cost them around $200 billion 
. Also, have you seen the graph on the US trade deficit with China? It's been increasing steadily since 2018 
. The White House says this new tariff will bring in an extra $5 billion a year 
, this is just another example of how Trump is gonna mess things up . He thinks he's a genius but really he's just creating more problems for himself and Nvidia 
Newsflash: Beijing isn't afraid of Trump or his tariffs. They're gonna find a way around it, mark my words 
.
Still, it feels a bit extreme to slap tariffs on these companies just for trying to be more diplomatic. Maybe it'll push them into doing business with Taiwan instead? 
china's tryin to be more self sufficent w/ their chips n stuff which is cool i guess 
. But seriously, this is getting out of hand. The US is basically trying to control every chip that goes into China. What's next, putting a GPS tracker on all their noodles? 
but then Nvidia is all "yeah thats a good idea for us" 
anyway its gonna be interesting to see how china reacts 
! So now Nvidia and AMD are going to have to pay a 25% tariff just because they're selling their chips to China? It's like the US is trying to strangle the entire tech industry 
.
.
. The US needs to get its priorities straight and stop trying to stifle innovation with these kinds of policies 
.