US president Donald Trump said on Wednesday that his administration will impose a 25% tariff on certain advanced computer chips, including Nvidia’s H200 AI processors and a similar chip made by AMD, called the MI325X. These are the chips Nvidia plans to sell in China.
The move is part of a larger deal where the US government will earn revenue while allowing Nvidia to resume some chip sales to China, which were earlier blocked.
Trump announces 25% tariff on select AI chips
According to the White House, the decision is linked to national security concerns. According to a fact sheet released on Wednesday, the tariff targets only specific high-end chips and does not apply to most foreign-made semiconductors, for now. However, the administration made it clear that bigger tariffs could come later. The fact sheet warned that Trump may decide to impose wider restrictions on semiconductor imports “in the near future.”
“The United States currently fully manufactures only approximately 10 percent of the chips it requires, making it heavily reliant on foreign supply chains. This dependence on foreign supply chains is a significant economic and national security risk,” the proclamation released by the White House said.
What the tariff covers, and what it doesn’t
The tariff applies to advanced chips like the Nvidia H200, which is made in Taiwan, and the AMD MI325X. This means Nvidia will have to pay a 25% tariff before selling these chips to approved customers in China.
At the same time, the tariff will not apply to chips imported to support the growth of the US technology supply chain or to strengthen domestic manufacturing of semiconductor-related products.
The White House also said the tariff will not cover chips meant for US data centres, startups, non–data centre consumer uses, civil industrial purposes, or US public-sector applications.
Nvidia welcomes the decision
Nvidia welcomed the administration’s move, especially the decision to allow Commerce Department–approved H200 chips to be sold to certain Chinese customers. “The Administration’s critics are unintentionally promoting the interests of foreign competitors on US entity lists. America should always want its industry to compete for vetted and approved commercial business, supporting real jobs for real Americans,” an Nvidia spokesperson said in an email.
This announcement follows a key policy change made a day earlier. On Tuesday, the Commerce Department’s Bureau of Industry and Security (BIS) revised its rules on chip exports to China. Under the new system, license applications for chips like the H200 and MI325X will be reviewed on a case-by-case basis, as long as certain security conditions are met.
Companies must prove that selling chips to China will not hurt US customers and that Chinese buyers have cleared government screenings.
Trump has been warning about tough semiconductor tariffs for months. Late last year, he said he could impose “fairly substantial” duties and at one point even floated tariffs as high as 100% for companies that failed to move production to the US.
Wednesday’s action, however, is more targeted. Rather than a blanket ban, it sets conditions that allow Nvidia to sell its chips to China while paying the tariff.
While US companies like Nvidia, AMD, and Intel design many of the world’s most advanced chips, most of them are produced abroad. A large share is manufactured by Taiwan Semiconductor Manufacturing Company (TSMC).