President Donald Trump capped a long-running investigation into American dependence on imported computer chips Wednesday by imposing a far narrower set of tariffs than the sweeping levies the White House threatened to introduce on the vital technology last year.
The move reflects the delicate line the administration has been walking on chips as it tries to stoke the booming domestic artificial intelligence sector that depends on chips manufactured abroad, mostly in Taiwan. In an order Wednesday putting the tariffs into place, Trump noted that the United States faces a national security risk in manufacturing so few chips at home. But the administration has opened the door to more advanced chips made abroad by U.S. companies Nvidia and AMD being sold to its chief AI rival, China.
In its announcement Wednesday, the government is imposing a new 25 percent tariff on what the White House called “a very narrow category of semiconductors,” including models made by Nvidia and AMD. The tax will apply only to chips imported into the United States but ultimately bound for customers overseas.
In December, the president said he would allow Nvidia, the leading AI chipmaker, to export some of its less powerful chips to China. The tariff order Trump signed Wednesday, along with rules governing those exports finalized this week, will enable the government to take a cut of those sales.
“We’re allowing them to do it, but the United States is getting 25 percent of the chips in terms of the dollar value, and I think it’s a very good deal,” Trump said Wednesday.
The president’s announcement establishes an unusual arrangement that distinguishes between imported semiconductors designed for domestic use and those set to be reexported to other nations, notably including China.
Paul Triolo, a partner at Albright Stonebridge Group in Washington, said it was unclear whether the administration’s approach would help with its ultimate goal of making more chips domestically.
“There is no precedent for this type of approach to tariffs and semiconductor policy,” he said. “This is a policy designed specifically for Nvidia and AMD to be able to ship advanced GPUs to China and for the U.S. government to attach a ‘chip tax’ to this process in a way that does not violate existing laws.”
Nvidia, which has become the world’s most valuable company on the strength of its AI chips, did not comment on the tariffs. But in an earlier statement, the company said this week’s exports rule “strikes a thoughtful balance that is great for America.”
AMD said it abides by export controls.
In 2025, the U.S. imported more than $100 billion worth of computer chips and related machinery, according to government statistics. China controls much of the production of lower-grade chips that are common in consumer goods and weapons alike.
Chris McGuire, a senior fellow at the Council on Foreign Relations, said Trump’s action Wednesday does not address China’s growing dominance in that segment of the industry and instead focuses on allowing Trump to claim a cut of advanced chip sales.
“There’s two completely different issues that are being conflated,” McGuire said.
Chips meant for U.S. artificial intelligence facilities or other domestic purposes will not be subject to the new 25 percent tariff. Advanced semiconductors such as Nvidia’s H200 and the AMD MI325X will be hit with the new import tax only if they are destined for customers in other nations.
The long-term aim is to spur development of a larger domestic chip industry, a goal shared by the Biden administration, which lavished multibillion-dollar subsidies on chipmakers. Trump has scorned those efforts, which enjoyed bipartisan support on Capitol Hill.
Amid concerns that Nvidia’s sophisticated chips would allow China to gain ground in the race to develop AI, Trump last year agreed to allow the company to ship them to Chinese buyers in return for giving the U.S. government one-quarter of the profits.
That unprecedented arrangement risked running afoul of a constitutional prohibition on export taxes, which may explain the plan announced Wednesday, analysts said. Under the setup, chips manufactured in Taiwan will travel to the U.S. before heading back across the Pacific Ocean to customers in China.
The new trade measures are also designed to head off tougher action by members of Congress, who are concerned about the risks involved in equipping Chinese AI developers, said Derek Scissors, a senior fellow at the American Enterprise Institute.
The new 25 percent tariff will be imposed starting at 12:01 a.m. Thursday under the president’s order. It will be applied in addition to some other applicable import taxes, though not Trump’s “reciprocal” tariffs dating to April.
Trump directed Jamieson Greer, his chief trade negotiator, and Commerce Secretary Howard Lutnick to negotiate unspecified agreements with foreign semiconductor powers “to adjust imports” and report on their progress within 90 days.
Depending on the outcome of those talks, Trump said he might impose “significant tariffs” beyond the 25 percent duties announced on Wednesday.
“Today’s announcement looks like the first step in using tariffs to incentivize more semiconductor investment in the U.S.,” said Wendy Cutler, senior vice president for the Asia Society Policy Institute. “The goal seems to be to provide the U.S. team with more leverage in ongoing negotiations with partners and semiconductor companies.”
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