President Donald Trump signed a proclamation imposing a 25% tariff on advanced AI semiconductors produced outside the United States that pass through the country before being exported to other nations, formalising a key component of the U.S. Department of Commerce's December decision to permit Nvidia to ship its H200 advanced AI chips to vetted customers in China. The tariff applies to certain semiconductors, including the Nvidia H200 advanced AI chips set to ship to China and chips from other companies, including the AMD MI325X.
In January 2025, the outgoing Biden administration placed the H200 under export restrictions as part of the AI Diffusion Rule, threatening to cut Nvidia off from significant revenue in the world's second-largest economy, but the U.S. Department of Commerce's Bureau of Industry and Security announced on Tuesday that Nvidia H200 chip sales to China would be permitted under specific conditions, representing the culmination of a sustained industry advocacy effort that included direct engagement between Nvidia CEO Jensen Huang and President Donald Trump. The approval stipulates that Nvidia H200 chip shipments to China cannot exceed 50% of the volume sold domestically in the United States, whilst every China-bound shipment must undergo verification by a U.S.-headquartered third-party laboratory, with the Trump administration mandating that China-bound chips make a detour from Taiwan for this testing, subjecting them to the newly announced 25% tariff upon entering U.S. territory. Nvidia was reportedly considering ramping up production on these chips due to a rush of early orders from Chinese companies, though according to a report by The Information, the Chinese government has informed technology companies that it will approve H200 chip purchases only under exceptional circumstances, such as for university research and development laboratories.
The levy ensures the U.S. government captures revenue from every advanced processor sold to Chinese firms, representing a significant shift in U.S. export policy that balances commercial interests with national security concerns. The approval effectively reverses the blanket export ban implemented by the Biden administration just one year ago, demonstrating how industry lobbying can reshape trade restrictions even for strategically sensitive technologies.
Sources:
1. https://techcrunch.com/2026/01/15/the-us-imposes-25-tariff-on-nvidias-h200-ai-chips-headed-to-china/
2. https://www.crnasia.com/news/2026/components-and-peripherals/trump-greenlights-nvidia-h200-chip-sales-to-china-after-mont
3. https://www.mobileappdaily.com/news/us-tariffs-nvidia-h200-china-gpu-shortage
