President Donald Trump signed an order Wednesday imposing tariffs on imports of certain semiconductors, a necessary step in the White House’s decision to allow Nvidia to sell advanced AI chips to China.
The 25-percent tariff, effective Thursday, applies to chips that are “transshipped through the United States to other foreign countries,” White House staff secretary Will Scharf said at an event.
This covers technology like the Nvidia H200 chip and AMD’s MI325X, a government fact sheet added.
Trump said last month that he reached an agreement with Chinese President Xi Jinping to allow US chip giant Nvidia to export the H200s into China, with the US government getting a 25-percent cut of sales.
The deal was confirmed by the US Commerce Department on Tuesday.
The change will permit Nvidia to sell its powerful H200 chip to Chinese buyers if certain conditions are met — including proof of “sufficient” US supply — while sales of its most advanced processors would still be blocked.
“China wants them, and other people want them, and we’re going to be making 25 percent on the sale of those chips,” Trump said at an event on Wednesday.
However, uncertainty has grown over how much demand there will be from Chinese companies, as Beijing has reportedly been encouraging tech companies to use homegrown chips.
The move marked a significant shift in US export policy for advanced AI chips, which Joe Biden’s administration had heavily restricted over national security concerns about Chinese military applications.
Lawmakers on both sides of the political aisle in Congress have criticized the move as a mistake that will help China’s military and economy.
Separately, Wednesday’s order directed US trade officials to continue negotiations relating to the imports of semiconductors and chip-making equipment into the United States, as Washington tries to spur domestic manufacturing in the critical sector.
The order follows an investigation into imports of chips and chip-making equipment launched last year.
The probes were initiated under Section 232 of the Trade Expansion Act, the same legal mechanism that Trump previously used to impose other sector-specific duties.
