The continuing effects of Donald Trump’s tariffs are still being felt, with reverberations around the global economy particularly damaging to the world’s largest semiconductor companies. As we’ve seen recently, the White House can be persuaded to make exceptions. This opens the door for Nvidia and AMD to again export their chips to China, but only if certain stringent conditions are met.
Under this clever new arrangement, Nvidia and AMD will continue getting export licenses, but only for their respective H20 and MI308 chips. In return for requiring the companies to pay 15% of their revenues from chip sales, that payment doesn’t even come to OPM – it’s transferred directly to the U.S. government. This decision follows Trump’s previous assertion that a 100% tariff would be imposed on semiconductor imports unless a company committed to building operations within the United States.
Donald Trump’s trade leadership has been heavily focused on breaking down symmetric trade relationships, particularly with regards to imports of technology. The potential for a 100% tariff on semiconductors and chips had raised concerns among companies looking to operate in global markets. In fact, the White House is now in the business of passing out export licenses. Yet at the same time, it asks for revenue neutralities to offset these draconian trade policies with a desire to keep relations competitive overseas.
Nvidia simultaneously announced the release of its H20 chips there, as AMD is releasing its MI308 chips. This new opening increases their competitive market access, despite significant tariffs still planned. The role of these two tech heavyweights further underscores the confusing, complicated world of international trade with Trump at the helm.
“We follow rules the U.S. government sets for our participation in worldwide markets.” – Nvidia
While companies continue to and will always grapple with these new regulations, the risks posed to semiconductor supply chains are profound. The deal demonstrates the continuing effect of U.S. tariffs. It underscores the need for these firms to shift and scale with government investments and policies that increasingly set the parameters around their business.