In a significant policy shift, the United States has implemented a 25 per cent tariff on imports of specific semiconductors. This move is a central component of an agreement, approved by President Donald Trump, that permits Nvidia Corp. to export its Taiwan-manufactured H200 artificial intelligence processors to the Chinese market.
A Strategic Tariff Condition
President Trump signed the directive on Wednesday, January 14, 2026. The tariff will be applied as the chips enter the United States for final shipment to customers in China and other foreign markets. This surcharge was a condition demanded by Trump in exchange for greenlighting Nvidia's sales to China. White House staff secretary Will Scharf clarified that the duty applies to chips "transshipped through the United States to other foreign countries" and not those destined for domestic use.
The decision represents a notable victory for Nvidia, which has actively lobbied U.S. officials to relax export controls that have blocked its access to the massive Chinese semiconductor market. Nvidia CEO Jensen Huang, who has cultivated a close relationship with Trump, successfully argued that stringent restrictions primarily empower Chinese domestic competitors like Huawei Technologies Co.
Details of the Deal and Remaining Hurdles
The chips in question, including the advanced H200 AI processors, are designed by Nvidia but produced by Taiwan Semiconductor Manufacturing Co. (TSMC). While the tariff condition has been met and the Commerce Department's Bureau of Industry and Security has eased its licensing criteria, Nvidia still requires final export license approvals from BIS before shipments to China can commence. This final administrative process could take weeks or months.
During a signing ceremony, President Trump highlighted the value of the arrangement, stating, "It's not the highest level, but it's a very good level. And China wants them, and other people want them, and we're going to be making 25 per cent of the sale of those chips, basically." He specifically referenced Nvidia's Blackwell and Rubin platforms as top-tier chips.
A Turn in U.S. Technology Export Policy
This development marks a stark reversal from years of U.S. policy aimed at limiting Beijing's access to cutting-edge American technology. The turnabout has drawn criticism from some Democrats and national security advocates in Washington, who warn it could strengthen a strategic adversary in the critical global artificial intelligence race.
The action occurs alongside broader trade negotiations. Top Taiwanese officials were reportedly en route to Washington to discuss a deal that would lower Taiwan's overall U.S. tariff rate to 15 per cent and expand TSMC's production footprint in America. While Taiwanese products generally face a 20 per cent tariff, semiconductors had been exempt pending a national security review.
