Trump enacts 25% tariff on chips — with a caveat
Semiconductor chips are seen on a circuit board of a computer.
By Elisabeth Buchwald, Lisa Eadicicco, CNN
(CNN) — President Donald Trump enacted a new 25% tariff on “certain advanced computing chips” on Wednesday, according to a White House fact sheet. That includes Nvidia’s H200 chip and AMD’s MI325X. However, chips imported to support building up the US technological supply chain would be exempt.
It’s unclear, though, what criteria would need to be met to qualify for the exemption. The White House did not immediately respond to CNN’s inquiry.
The White House fact sheet also warned that the president in the near future “may impose broader tariffs on imports of semiconductors and their derivative products.”
The move comes amid Trump’s broad push to boost technology manufacturing in the United States and cement the US as a leader in AI. Nvidia, whose chips are vital to powering the data centers fueling AI services, has been at the center of the AI boom, thrusting CEO Jensen Huang into Trump’s orbit.
In enacting the tariff, Trump cited national security concerns and Section 232 of the Trade Expansion Act of 1962, which allows presidents to address such concerns with tariffs on specific products.
Trump previously said Nvidia would be permitted to sell its H200 chip in China but that the US would take a 25% cut.
Nvidia said in an emailed statement that it applauds Trump’s “decision to allow America’s chip industry to compete to support high paying jobs and manufacturing in America.”
“Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America,” the statement read.
AMD said in a statement that it complies “with all U.S. export control laws and policies.”
It’s not the first time Trump has discussed tariff exemptions to incentivize building in the US. The president in August threatened 100% levies on chips and semiconductors but said companies that have committed to building domestically would avoid such a charge.
Trump has made AI a cornerstone of his second term, signing multiple executive orders related to the technology and introducing an AI action plan meant to peel back regulation and increase the adoption and development of AI. But some, including Huang, have been critical of tight export controls to China in the past, saying such restrictions have only boosted innovation in China.
That has put chip giants, especially Nvidia, in the middle of Trump’s trade scuffles with China. In August, Nvidia and AMD said they would pay 15% of chip sales made in China to the US government, although that agreement seemingly referred to older chips from both companies.
Trump initially said last February he planned to impose 25% chip tariffs by April. However, it wasn’t until months later that he formally initiated an investigation into chip imports, a precursor to Section 232 tariffs. These types of tariffs are separate from those being challenged in a case before the Supreme Court.
This story has been updated with additional context and developments.
The-CNN-Wire
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