- Tariff targets high-end processors while allowing limited sales to China
- White House flags national security risks in chip supply chains
- Wider semiconductor duties still on the table
US president Donald Trump said on Wednesday that his administration will impose a 25 per cent tariff on certain advanced computer chips, including Nvidia’s H200 artificial intelligence processor and a comparable chip from AMD, the MI325X.
The tariff applies to chips that Nvidia plans to sell to approved customers in China and forms part of a broader arrangement that allows limited exports to resume after earlier restrictions. The White House said the move is tied to national security concerns, while also creating a revenue stream for the US government.
According to a fact sheet released on Wednesday, the measure is narrowly focused on specific high-end chips and does not, for now, apply to most foreign-made semiconductors. The administration, however, warned that wider tariffs could follow. Trump may decide to impose broader restrictions on semiconductor imports “in the near future," the document said.
Taxed and spared
The tariff covers advanced processors such as the Nvidia H200, which is manufactured in Taiwan, and the MI325X made by AMD. This means Nvidia will have to pay the 25 per cent levy before selling these chips to customers in China who receive government approval.
At the same time, the White House said the tariff will not apply to chips imported to support the growth of the US technology supply chain or to strengthen domestic semiconductor manufacturing. It also excludes chips destined for US data centres, startups, consumer devices outside data centres, civil industrial uses and US public-sector applications.
In its proclamation, the administration pointed to structural weaknesses in domestic production. “The United States currently fully manufactures only approximately 10 per cent of the chips it requires, making it heavily reliant on foreign supply chains,” the White House said, as quoted in a fact sheet, warning that this dependence poses economic and national security risks.
Industry reaction
Nvidia welcomed the decision, particularly the approval for certain H200 chips to be sold to Chinese customers. An Nvidia spokesperson reportedly said critics of the move were “unintentionally promoting the interests of foreign competitors on US entity lists”, adding that US companies should be able to compete for vetted commercial business that supports American jobs.
The announcement follows a policy shift a day earlier by the Commerce Department’s Bureau of Industry and Security, which revised export rules for China. Under the updated framework, licence applications for chips such as the H200 and MI325X will be reviewed on a case-by-case basis, provided certain security conditions are met. Companies must show that sales will not harm US customers and that Chinese buyers have cleared government screening.
Trump has spoken for months about imposing tough semiconductor tariffs and previously floated duties as high as 100 per cent for firms that failed to move production to the US. Wednesday’s step is more targeted, stopping short of a blanket ban while setting clear financial and regulatory conditions.
While US firms design many of the world’s most advanced chips, much of the manufacturing is carried out overseas, with a large share produced by Taiwan Semiconductor Manufacturing Company. How far Washington goes next on tariffs could shape not just trade with China, but the future of the global chip supply chain.
