Trump imposes a 25% tariff on semiconductors — but with an exception

Semiconductor Tariffs Announced by President Trump

President Donald Trump has introduced a new 25% tariff targeting select advanced computing chips, as detailed in a recent White House fact sheet. This measure affects products such as Nvidia’s H200 and AMD’s MI325X chips. However, chips brought into the country to help strengthen the U.S. technology supply chain may be exempt from this tariff.

At this time, the specific requirements for qualifying for these exemptions remain unclear, and the White House has not yet provided clarification. The fact sheet also indicated that the administration is considering the possibility of expanding tariffs to cover a wider range of semiconductor imports and related products in the near future.

Strengthening U.S. Tech Manufacturing

This policy is part of Trump’s broader initiative to increase domestic technology production and reinforce the United States’ leadership in artificial intelligence. Nvidia, a key supplier of chips essential for powering AI data centers, has played a central role in the recent AI surge, bringing CEO Jensen Huang into closer contact with the administration.

The president cited national security concerns and invoked Section 232 of the Trade Expansion Act of 1962, which grants the authority to impose tariffs on certain goods to address such issues.

Industry Reactions and International Trade

Trump has previously stated that Nvidia would be allowed to sell its H200 chip in China, but the U.S. would claim a 25% share of those sales. In response to the new tariffs, Nvidia expressed support for the decision, emphasizing that it enables the American chip industry to compete and sustain high-quality jobs and manufacturing within the country.

“Providing the H200 to approved commercial clients, who have been vetted by the Department of Commerce, achieves a balanced approach that benefits the United States,” Nvidia said in a statement.

AMD also commented, affirming its commitment to adhering to all U.S. export regulations and policies.

Tariff Exemptions and Ongoing Trade Tensions

This is not the first time President Trump has discussed tariff exemptions as a way to encourage domestic manufacturing. In August, he threatened to impose tariffs as high as 100% on chips and semiconductors, but noted that companies investing in U.S.-based production would be spared from these charges.

Artificial intelligence has become a major focus of Trump’s second term, with several executive orders and an AI action plan aimed at reducing regulations and promoting AI development. However, some industry leaders, including Nvidia’s Jensen Huang, have criticized strict export controls to China, arguing that such measures have only accelerated technological advancements in China.

These policies have placed major chipmakers, especially Nvidia, at the center of ongoing trade disputes between the U.S. and China. In August, both Nvidia and AMD agreed to pay 15% of their chip sales in China to the U.S. government, although this arrangement appeared to apply to older chip models.

Background and Updates

Trump first announced his intention to introduce a 25% tariff on chips last February, with plans to implement it by April. However, the formal investigation into chip imports, a necessary step before enacting Section 232 tariffs, did not begin until several months later. These tariffs are distinct from others currently being reviewed by the Supreme Court.

This article has been updated to include new information and recent developments.