US President Donald Trump on Wednesday announced a 25% Tariff on certain AI chips, including Nvidia’s H200 processor and AMD’s MI325X semiconductor. The decision comes under a national security order issued by the White House.
The 25% Tariff follows a nine-month investigation under Section 232 of the Trade Expansion Act of 1962. It targets high-performance semiconductors and devices containing them. The goal is to encourage more chip production in the US and reduce reliance on foreign suppliers, particularly from Taiwan.
According to the proclamation, the US currently manufactures only about 10% of the chips it needs, creating a significant economic and national security risk. The tariffs aim to address this gap and strengthen domestic supply chains.
The White House clarified that the 25% Tariff will not apply to chips imported for US data centers, startups, consumer applications outside data centers, civil industrial use, or public sector applications. Commerce Secretary Howard Lutnick has discretion to grant additional exemptions.
Shares of Nvidia, AMD, and Qualcomm saw slight declines in after-hours trading following the announcement.
The move follows Trump’s previous plans to impose tariffs on Chinese semiconductor imports. The administration also requires that China-bound chips pass through the US for third-party testing before export, after which the 25% Tariff applies.
Trump’s broader trade strategy includes measures to strengthen American manufacturing. Earlier initiatives imposed duties on drugs, trucks, and other critical imports. Most advanced chips used in the US are designed domestically but manufactured overseas by companies like Taiwan Semiconductor Manufacturing Co. (TSMC).
Legal experts have noted that some provisions, such as selling chips to China under certain conditions, may raise constitutional questions. The White House emphasized that the 25% Tariff is narrowly focused and not stacked on existing tariffs for other products.
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The new order signals a strategic push by the US to secure its semiconductor supply chain and encourage domestic production while balancing international trade concerns.
