Donald Trump has imposed a 25% tariff on certain advanced artificial intelligence chips, including Nvidia’s H200 processor and a comparable semiconductor from AMD, the MI325X, under a new national security order issued by the White House on Wednesday.
The move follows a nine-month investigation conducted under Section 232 of the Trade Expansion Act of 1962. The investigation concluded that reliance on foreign-made high-end semiconductors poses a risk to US economic and national security.
According to the proclamation, the tariffs apply to a defined group of high-performance semiconductors that meet specific technical benchmarks, as well as devices containing them. The measure is intended to encourage chipmakers to expand manufacturing within the United States and reduce dependence on overseas production, particularly in Taiwan.
“The United States currently fully manufactures only approximately 10 per cent of the chips it requires, making it heavily reliant on foreign supply chains,” the proclamation said, describing this dependence as a significant security risk.
The White House said the tariffs would be narrowly targeted. Chips and related devices imported for US data centres, start-ups, non-datacentre consumer uses, non-datacentre industrial applications and public sector use would be exempt.
The proclamation gives the US commerce secretary, Howard Lutnick, broad authority to grant further exemptions if deemed necessary.
Shares of Nvidia, AMD and Qualcomm edged lower in after-hours trading following the announcement.
Trump had said in December that he planned to impose tariffs on Chinese semiconductor imports, citing what he described as Beijing’s “unreasonable” efforts to dominate the global chip industry. That action was delayed until June 2027.
The December announcement followed a year-long Section 301 investigation launched under former president Joe Biden into China’s exports of so-called legacy, or older-generation, chips to the United States.
Uncertainty had surrounded which products would be affected, how high the tariffs would be and whether exemptions would apply. Wednesday’s announcement, alongside the earlier decision, suggests a cautious approach to chip tariffs for now.
Last year, Trump said he would allow Nvidia to sell H200 chips to China in exchange for a share of the sales revenue. Legal experts questioned whether such an arrangement would breach the US constitution’s prohibition on export taxes.
This week, the Trump administration also introduced a requirement that chips destined for China be routed through the United States from Taiwan for testing by a third-party laboratory. Upon entering the US, those chips become subject to the new 25% tariff.
Nvidia did not immediately respond to a request for comment. AMD said it complies with all US export control laws and policies.
The tariffs form part of a broader push by Trump to bolster domestic manufacturing. In September, he announced wide-ranging import duties, including 100% tariffs on branded pharmaceuticals and 25% levies on heavy-duty trucks, increasing uncertainty over global trade.
In April, the administration launched investigations into pharmaceutical and semiconductor imports, arguing that heavy reliance on foreign production in both sectors threatens national security.
Although US companies such as Nvidia, AMD and Intel design many of the world’s most widely used chips, most are manufactured abroad, with a significant share produced by Taiwan Semiconductor Manufacturing Company. TSMC and the Semiconductor Industry Association did not immediately respond to requests for comment.
The White House said Trump may impose broader tariffs on semiconductor imports and related products in the future to further incentivise domestic production.
An annex to the order states that the 25% semiconductor tariff will not be added on top of other duties imposed under separate Section 232 orders. Affected chips will be exempt from existing tariffs on steel, aluminium, copper, vehicles and vehicle parts.
