Trump Imposes 25% Tariff on Nvidia AI Chips: Section 232 Action

Invoking national security powers, Donald Trump imposes a 25% tariff on Nvidia AI chips under Section 232 of the Trade Expansion Act. The order targets advanced semiconductors like the Nvidia H200 and AMD MI325X. It follows a determination that the U.S. is overly reliant on foreign chip production.
The administration has included broad exemptions to protect the U.S. economy. Chips imported for U.S. data centers, startups, and consumer electronics are not subject to the tariff. This ensures that the costs of the trade action do not fall on the American companies driving the AI boom.
The policy creates a new hurdle for the China trade. Chips made in Taiwan and sold to China must now pass through the U.S. for testing. This mandatory stopover triggers the 25% tariff, effectively taxing the export of these chips to a strategic rival. It is a way to use trade law to achieve geopolitical objectives.
The administration’s goal is to increase domestic manufacturing capacity. With the U.S. producing only 10% of its chips, the White House argues that national security is compromised. The tariffs are intended to incentivize chipmakers to relocate production to the U.S., securing the supply chain.
Tech stocks traded slightly lower following the announcement. The administration has warned that broader tariffs could be imposed if the industry does not respond. The Commerce Secretary’s ability to adjust exemptions adds a layer of flexibility to the policy.