President Donald Trump formalized a high-stakes "tax-and-trade" strategy for the semiconductor industry on Wednesday, signing a proclamation that imposes a 25% ad valorem tariff on high-performance AI chips produced abroad that transit through the U.S. before being exported to international customers.
The order specifically names Nvidia’s H200 and AMD’s MI325X as "covered products."
This decision marks the official implementation of a deal teased in late 2025: the U.S. will lift the blanket ban on selling these advanced processors to China, provided they are sold to "vetted" customers and the U.S. Treasury collects a 25% cut on every shipment.
The administration is using Section 232 of the Trade Expansion Act of 1962 to justify the move, citing that heavy reliance on foreign-made chips is a "national security risk."
Currently, the U.S. manufactures only 10% of the chips it requires.
To avoid harming the domestic tech boom, the proclamation includes broad exemptions for chips used within U.S. borders.
Despite the new levy, Nvidia (NASDAQ:NVDA) signaled strong support for the policy.
The company had previously warned that total bans would simply hand market share to Chinese state-backed competitors like Huawei.