President Donald Trump announced 25% tariffs on Nvidia and AMD AI chip sales to China, effectively taking a revenue share from exports. The move applies to chips like Nvidia’s H200 and AMD’s MI325X, first imported to the US before being shipped abroad.

The policy is part of a broader national security probe and marks a shift in US export controls. While chips used domestically are exempt, those transshipped to China face steep levies. The administration frames this as a way to profit from relaxed restrictions on high-demand AI hardware.

Industry experts say the decision reflects Trump’s transactional trade stance and could pressure Beijing to retaliate. Taiwan Semiconductor Manufacturing Company still dominates advanced chip production, complicating US efforts to reshore supply chains despite recent investments by Nvidia and TSMC.

China’s response remains unclear. Though some access to H200 chips is under discussion, customs officials have signaled delays. Tech giants like Alibaba and ByteDance rely on these chips, but Beijing favors domestic alternatives for long-term semiconductor self-sufficiency.