New National Security Order: Trump Imposes 25% Tariff on Nvidia AI Chips and AMD Rivals

In a significant move to reshape the American semiconductor landscape, Donald Trump signed a proclamation on Wednesday levying a 25% tariff on high-performance AI chips. The order specifically targets advanced processors such as the Nvidia H200 and AMD’s MI325X. This decision comes after a nine-month investigation under Section 232 of the Trade Expansion Act of 1962, which determined that the current reliance on foreign-made chips poses a threat to national security.
The White House emphasized that the United States currently manufactures only about 10 percent of the chips it needs. Officials described this dependency on foreign supply chains as a “significant economic and national security risk.” By imposing these duties, the administration aims to pressure chipmakers to move production to U.S. soil, thereby reducing reliance on overseas manufacturers, particularly those in Taiwan.
Despite the aggressive headline number, the administration has carved out substantial exemptions to mitigate immediate economic damage. The tariffs will not apply to chips imported for use in U.S. datacenters, which are the primary consumers of these high-end processors. Additionally, startups, non-datacenter consumer applications, and public sector projects are currently exempt from the levy.
The enforcement of these tariffs also intersects with complex geopolitical maneuvers regarding China. Recent rules require that chips destined for China must detour from their manufacturing hubs in Taiwan to the U.S. for third-party testing. Once these chips enter U.S. territory for this mandatory stopover, they become subject to the new 25% tariff, effectively taxing the transit of technology to rival nations.
Market reaction was swift but relatively muted, with shares of Nvidia, AMD, and Qualcomm trading slightly lower following the announcement. Commerce Secretary Howard Lutnick holds broad discretion to grant further exemptions, suggesting the administration is maintaining flexibility. This action follows a broader pattern of tariffs on goods ranging from pharmaceuticals to heavy trucks, signaling a continued aggressive trade policy.