US President Donald Trump on Wednesday imposed a 25% tariff on certain advanced computing chips, including Nvidia’s H200 AI processor and AMD’s MI325X semiconductor, according to a fact sheet released by the White House. The move is aimed at reducing US dependence on foreign chip manufacturing and strengthening domestic semiconductor production.
The move allows the US government to earn tariff revenue while permitting Nvidia to restart select chip sales to China that had earlier been halted.
The proclamation said the decision was driven by national security considerations and forms part of a broader strategy to encourage chipmakers to manufacture more semiconductors within the United States, particularly as most advanced chips are currently produced overseas.
“The United States currently fully manufactures only approximately 10 percent of the chips it requires, making it heavily reliant on foreign supply chains. This dependence on foreign supply chains is a significant economic and national security risk,” the proclamation said.
Targeted tariffs, broader measures may follow
The White House clarified that the tariff is narrowly focused and currently applies only to specific high-end chips, rather than all foreign-made semiconductors. However, the administration warned that wider tariffs on semiconductors and derivative products could be introduced in the near future to further incentivise domestic manufacturing.
Trump has repeatedly signalled a tough stance on semiconductor imports. Last year, he floated the idea of imposing tariffs as high as 100% on companies that fail to shift production to the US.
In April, the administration also launched investigations into semiconductor and pharmaceutical imports, arguing that excessive reliance on foreign manufacturing in these sectors poses a national security threat.
What the tariff covers and what it excludes
The 25% tariff applies to advanced chips such as Nvidia’s H200, which is manufactured in Taiwan, and AMD’s MI325X. These chips are among those Nvidia plans to sell to approved customers in China, meaning companies will need to pay the tariff before completing such sales.
However, the White House said the tariff will not apply to chips imported for:
The administration also said imports that support the expansion of the US technology supply chain or strengthen domestic semiconductor manufacturing will be exempt.
Link to revised US chip export rules for China
The announcement follows a policy shift by the Commerce Department’s Bureau of Industry and Security (BIS) a day earlier. Under the revised framework, export licence applications for chips like the H200 and MI325X will be reviewed on a case-by-case basis, provided certain security conditions are met.
Companies must demonstrate that such sales will not harm US customers and that Chinese buyers have cleared government security screenings.
The tariff approach marks a shift from outright restrictions to a more conditional system that allows limited sales while generating revenue for the US government.
NVIDIA responds to the decision
Nvidia welcomed the administration’s move, particularly the decision to allow Commerce Department-approved H200 chips to be sold to select Chinese customers.
“The Administration’s critics are unintentionally promoting the interests of foreign competitors on US entity lists. America should always want its industry to compete for vetted and approved commercial business, supporting real jobs for real Americans,” an Nvidia spokesperson said in an email.
Heavy reliance on overseas chip manufacturing
While US companies such as Nvidia, AMD, and Intel design many of the world’s most advanced semiconductors, most production takes place abroad. A significant share of these chips is manufactured by Taiwan Semiconductor Manufacturing Company (TSMC), which did not immediately respond to a request for comment.
Trump has used tariffs as a central tool to push companies toward US-based manufacturing. In recent months, his administration announced sweeping import duties, including 100% tariffs on branded drugs and 25% levies on heavy-duty trucks, reigniting global trade uncertainty.
Wednesday’s move, however, remains limited in scope, for now, focusing on high-end AI chips while signalling that broader action could still be on the horizon.
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