Donald Trump imposes a 25% tariff on Nvidia AI chips, a move that has sent ripples through the global technology sector. The executive order, signed Wednesday, targets high-end semiconductors like the Nvidia H200 and AMD MI325X, following a nine-month investigation into the national security implications of chip imports.
The policy is defined by its strategic exemptions. While the tariff is 25%, it does not apply to chips imported for U.S. data centers, startups, or public sector use. This safeguards the core of the American digital economy from rising costs. The administration’s fact sheet describes the reliance on foreign chips—90% of the supply—as a critical risk that necessitates government intervention.
The tariff functions partly as a geopolitical maneuver against China. Under the new rules, chips made in Taiwan and sold to China must pass through the U.S. for testing. This detour allows the U.S. to levy the 25% import duty on goods that are ultimately destined for a foreign rival, raising their costs and complicating their logistics.
This action is part of a suite of tariffs aimed at bolstering U.S. manufacturing. The administration hopes that by making imports more expensive and logistically complex, chipmakers will be motivated to relocate production to the U.S. The order clarifies that these tariffs are distinct from other duties on materials like steel and aluminum, simplifying the compliance landscape.
Stocks for Nvidia and AMD fell slightly as the market digested the news. While the immediate economic impact is mitigated by exemptions, the threat of future expansion looms. The administration has stated that broader tariffs could be imposed in the near future, keeping pressure on the industry to align with U.S. strategic goals.