The Trump administration has announced a 25% tariff on imports of high-end computing chips critical to the artificial intelligence industry, specifically targeting hardware that powers the AI boom. According to a White House fact sheet released Wednesday, the tariff applies to “certain advanced computing chips,” including Nvidia’s H200 processor and AMD’s MI325X—two of the most powerful AI accelerators currently available.
The new tariff includes exemptions designed to encourage domestic technology manufacturing. Chips imported to support the buildout of the US technology supply chain would be excluded, though the administration has not yet detailed the qualification process for companies seeking this exemption. The proclamation also broadly targets “imports of semiconductors, semiconductor manufacturing equipment, and their derivative products from any country,” though clarification on the full scope remains pending.
President Trump invoked Section 232 of the Trade Expansion Act of 1962, citing national security concerns as justification for the trade restrictions. This legal mechanism allows presidents to impose tariffs after determining that imports pose a security risk to the United States.
The White House indicated this could be just the beginning, signaling that the Trump administration may expand tariffs to a wider range of semiconductors and related products in the future. The move aligns with Trump’s broader agenda to reshore advanced manufacturing and maintain US leadership in the AI race.
Nvidia, whose chips power the majority of data centers behind AI services like ChatGPT and other generative AI applications, has been a focal point of Trump’s technology policy. The president has previously stated that Nvidia would be allowed to sell certain advanced chips to China, particularly the H200, under the condition that the US government receives 25% of the proceeds.
Neither AMD nor Nvidia immediately responded to requests for comment on the new tariff policy. This is not Trump’s first attempt to use tariff exemptions as leverage—last year, he floated tariffs as high as 100% on chips and semiconductors, while suggesting that companies investing in US production facilities could avoid them entirely. The strategy appears designed to incentivize major chip manufacturers to establish or expand manufacturing operations within American borders.
Key Quotes
The tariff applies to ‘certain advanced computing chips,’ including Nvidia’s H200 processor and AMD’s MI325X.
From the White House fact sheet, this quote identifies the specific AI chips targeted by the new 25% tariff, representing the most powerful processors currently used for training and running large-scale AI models.
Trump has previously said the company would be allowed to sell certain advanced chips to China, especially the H200, under the condition that the US government gets 25% of the proceeds.
This statement reveals Trump’s broader strategy of using regulatory leverage to extract financial benefits from AI chip sales, particularly to strategic competitors like China, while maintaining some level of trade.
Our Take
This tariff policy represents a bold but risky gambit in the global AI competition. While the intention to build domestic chip manufacturing capacity is strategically sound, the immediate effect will likely be increased costs for US companies developing AI systems—potentially giving international competitors a temporary advantage. The exemption mechanism will be crucial: if it’s too restrictive, it could stifle innovation; if too permissive, it defeats the policy’s purpose. What’s particularly notable is the explicit linking of AI chips to national security, which suggests we’re entering an era where AI capabilities are viewed similarly to nuclear technology or military hardware. The 25% revenue-sharing proposal for China sales is unprecedented and raises questions about how such arrangements would be enforced and whether they comply with international trade law. This move will likely accelerate the bifurcation of global AI development into competing technological spheres.
Why This Matters
This tariff represents a significant intervention in the global AI supply chain at a critical moment when demand for advanced computing chips has reached unprecedented levels. The policy directly impacts the two dominant players in AI chip manufacturing—Nvidia and AMD—whose processors are essential for training and deploying large language models and other AI systems.
The move signals that AI infrastructure has become a matter of national security in the eyes of the US government, not just a commercial concern. By using tariffs to encourage domestic chip production, the administration is attempting to reduce dependence on foreign manufacturing while potentially slowing competitors’ access to cutting-edge AI capabilities.
For businesses building AI systems, this could mean higher costs for essential hardware unless they can qualify for exemptions, potentially affecting the pace of AI development and deployment. The policy also creates uncertainty in global tech supply chains and may prompt retaliatory measures from other nations. Long-term, this could accelerate the fragmentation of the global semiconductor industry into regional blocs, fundamentally reshaping how AI technology is developed and distributed worldwide.
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Source: https://www.businessinsider.com/trump-tariff-high-end-computing-chip-imports-nvidia-amd-2026-1