After months of speculation regarding potential trade barriers, President Trump signed a proclamation on Wednesday establishing a 25% tariff on advanced AI semiconductors. This new levy specifically targets chips that are manufactured outside the United States and then pass through U.S. borders before being exported to foreign customers. The policy impacts high-profile hardware, including the AMD MI325X and the Nvidia H200, which has already seen a rush of early orders from Chinese companies. Crucially, the order distinguishes between export and domestic use; the tariffs do not apply to semiconductors imported into the U.S. for internal research, defense, or commercial purposes.
This executive action serves to formalize a recent decision by the U.S. Department of Commerce that grants Nvidia permission to ship its advanced H200 AI chips to vetted clients in China. Despite the imposition of new costs, Nvidia has publicly embraced the move, viewing the policy as a necessary framework that allows it to legally sell its technology to approved customers in a previously restricted market. An Nvidia spokesperson applauded the decision, stating that offering the H200 to vetted commercial customers “strikes a thoughtful balance that is great for America” and supports the domestic chip industry’s ability to compete.
On the receiving end, China faces a complex strategic dilemma regarding these imports. While the Chinese government is eager to bolster its own domestic semiconductor capabilities, it is simultaneously wary of falling behind international rivals in the global AI race while waiting for its local technology to catch up. According to reporting from Nikkei Asia, Beijing is currently working to draft guidelines and quotas that would allow Chinese companies to purchase a regulated number of these overseas chips. This marks a shift away from strict adversity toward imports, mirroring the U.S. administration’s goal to mitigate the risks of relying on foreign supply chains when the U.S. currently manufactures only about 10% of the chips it requires.
