US sets tariff on certain chips as part of Nvidia-China deal

NEW YORK

President Donald Trump has signed an order imposing tariffs on imports of certain semiconductors, a necessary step in the White House's decision to allow Nvidia to sell advanced AI chips to China.

The 25 percent tariff, effective yesterday, applies to chips that are "transshipped through the United States to other foreign countries," White House staff secretary Will Scharf said at an event.

This covers technology like the Nvidia H200 chip and AMD's MI325X, a government fact sheet added.

Trump said last month that he reached an agreement with Chinese President Xi Jinping to allow U.S. chip giant Nvidia to export the H200s into China, with the U.S. government getting a 25-percent cut of sales.

The deal was confirmed by the U.S. Commerce Department on Jan. 13.

The change will permit Nvidia to sell its powerful H200 chip to Chinese buyers if certain conditions are met -- including proof of "sufficient" US supply -- while sales of its most advanced processors would still be blocked.

"China wants them, and other people want them, and we're going to be making 25 percent on the sale of those chips," Trump said at an event on Jan. 14.

However, uncertainty has grown over how much demand there will be from Chinese companies, as Beijing has reportedly been encouraging tech companies to use homegrown chips.