After months of rumors that the Trump administration was going to impose tariffs on semiconductors, a tariff on certain chips has been announced. The tariff only applies to certain semiconductors, including Nvidia H200 advanced AI chips that are to be shipped to China.
President Donald Trump signed a proclamation on Wednesday, that involved 25% tariffs on advanced artificial intelligence semiconductors that have been manufactured outside the US and then pass through the US before being exported to customers in other countries.
This news formalizes a key element of the US Commerce Department’s decision to give Nvidia the green light to begin shipping its advanced AI H200 chips to verified customers in China in December. It also includes chips from other companies, including the AMD MI325X.
Despite the tariffs, Nvidia publicly cheered the move, which allows it to sell the chip to approved customers.
“We applaud President Trump’s decision to allow America’s chip industry to compete to support high-paying jobs and manufacturing in America. Offering the H200 to approved commercial customers, vetted by the Commerce Department, strikes a thoughtful balance that’s great for America,” an Nvidia spokesperson emailed TechCrunch.
There is a demand for these H200 semiconductors. Nvidia has reportedly been considering ramping up production on these chips due to a rush of early orders from Chinese companies.
However, demand is only one factor. The other is how the Chinese government decides to regulate these imports.
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China is in a similar but different situation to the US when it comes to chip production and the global AI race. China wants to boost its domestic semiconductor industry, but the country also doesn’t want to be left behind while it waits for its domestic technology to catch up with its international rivals.
China’s central government is working to draft rules and guidelines on how many semiconductors Chinese companies can buy from abroad, according to report from Nikkei Asia. This would allow some buying of Nvidia’s chips and would be a reversal of the the country’s current adversities towards chip imports.
Wednesday’s executive order does not apply to chips that are imported into the US and then used in the country for research, defense or commercial purposes.
“The United States currently fully manufactures only about 10% of the chips it requires, making it highly dependent on foreign supply chains. This dependence on foreign supply chains poses a significant economic and national security risk,” the proclamation said.
