Washington announced a 25% export tariff on all Nvidia and AMD chips shipped to China. The levy, applied by the White House, will shave a quarter off the value of each sale, directly targeting the two biggest U.S. AI‑processor makers. Officials say the move enforces a prior trade understanding.

The tariff fulfills a deal struck under Donald Trump, which let chipmakers export advanced AI processors in exchange for a future revenue share. At the time, the administration sought to keep American firms competitive while extracting compensation from Chinese buyers. Today, the policy resurfaces amid escalating U.S.–China tech rivalry.

Industry analysts warn the 25% cut could tighten profit margins for Nvidia and AMD, prompting them to shift production to other markets or raise prices for domestic customers. Watch for possible legal challenges and for Beijing’s response, which may include retaliatory measures on U.S. semiconductor imports or accelerated development of homegrown alternatives.