US President Donald Trump on Wednesday announced a 25% tariff on select AI chips, including Nvidia’s H200 processor and AMD’s MI325X, citing national security concerns. The new tariffs follow a nine-month investigation under Section 232 of the Trade Expansion Act of 1962.
The proclamation targets high-end semiconductors that meet specific performance benchmarks, as well as devices containing them. The move is part of a broader effort to encourage semiconductor production in the US and reduce dependence on foreign suppliers, especially in Taiwan.
“The United States currently fully manufactures only about 10 percent of the chips it needs,” the White House said. “This heavy reliance on foreign supply chains poses a significant economic and national security risk.”
According to a White House fact sheet, the 25% tariff will be narrowly applied. Imports for US data centers, startups, non-data center consumer applications, civil industrial uses, and public sector projects will be exempt. Commerce Secretary Howard Lutnick also has discretion to grant additional exemptions.
The announcement affected shares of Nvidia, AMD, and Qualcomm, which traded slightly lower in after-hours markets.
In December, Trump had planned tariffs on Chinese semiconductor imports due to Beijing’s pursuit of chip industry dominance. Those tariffs were postponed until June 2027. The administration previously conducted a Section 301 investigation into China’s exports of older technology chips, which informed the current strategy.
The administration now requires China-bound chips to pass through the US for third-party testing. These shipments will face the newly imposed 25% tariff when they enter the country. Nvidia and AMD have confirmed compliance with US export laws, though Nvidia has not commented directly on the new tariff.
This latest tariff is part of a wider push by Trump to strengthen American manufacturing. Past measures included tariffs on pharmaceuticals, trucks, steel, and aluminum. Officials indicate that broader semiconductor tariffs may follow to further incentivize domestic production.
The order clarifies that the 25% tariff on semiconductors will not overlap with other Section 232 tariffs, such as those on copper, aluminum, steel, or vehicle parts.
The administration emphasizes that the measure is targeted, aiming to secure US technology supply chains while minimizing disruption to critical sectors.
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