After months of rumors, the Trump administration has announced tariffs on some semiconductors. The new tariff applies specifically to certain advanced chips, including the Nvidia H200 AI chips destined for China.
President Donald Trump signed a proclamation on Wednesday instituting a 25% tariff on advanced AI semiconductors produced outside the United States that pass through the U.S. before being exported to other countries.
This action formalizes a key part of a prior U.S. Department of Commerce decision that allowed Nvidia to begin shipping its H200 advanced AI chips to vetted customers in China starting in December. The tariff also covers chips from other companies, such as the AMD MI325X.
Despite the new tariff, Nvidia publicly supported the move, as it permits the company to sell the chips to approved customers. An Nvidia spokesperson stated that the company applauds President Trump’s decision, which allows America’s chip industry to compete and supports high-paying jobs. The spokesperson added that offering the H200 to vetted commercial customers strikes a thoughtful balance that is beneficial for America.
There is significant demand for these H200 semiconductors. Nvidia was reportedly considering increasing production due to a surge of early orders from Chinese companies.
However, demand is only one factor. Another is how the Chinese government decides to regulate these imports. China finds itself in a situation similar, yet different, to the U.S. in the global AI race. The country aims to boost its domestic semiconductor industry but also does not want to fall behind while its local technology develops.
The Chinese central government is reportedly drafting rules to guide how many semiconductors Chinese companies can purchase from overseas. This would allow for some purchasing of Nvidia’s chips, marking a reversal from the country’s current restrictions on such imports.
Wednesday’s executive order does not apply to chips imported into the U.S. for domestic use in research, defense, or commercial purposes. The proclamation noted that the United States currently manufactures only about 10% of the chips it requires, creating a heavy reliance on foreign supply chains that poses a significant economic and national security risk.