The United States has introduced a 25% tariff on certain high-performance AI chips, including the Nvidia H200 processor and AMD’s MI325X, as part of a national security directive aimed at strengthening domestic semiconductor production. The measure, announced Wednesday by the White House, follows a nine-month review under Section 232 of the Trade Expansion Act of 1962.

 

The tariffs target a specific range of advanced semiconductors and devices containing them, marking a strategic effort to reduce U.S. dependence on overseas chip manufacturing, particularly from regions like Taiwan. “The United States currently produces only around 10% of the chips it needs, creating both economic and national security vulnerabilities,” the proclamation stated.

 

Despite the tariffs, the administration emphasized that exemptions will apply to chips imported for U.S. data centers, startups, civil industrial applications outside data centers, and public sector uses. Commerce Secretary Howard Lutnick is granted discretion to apply additional exemptions as needed.

 

Shares of major chipmakers, including Nvidia, AMD, and Qualcomm, showed slight declines in after-hours trading following the announcement.

 

This action aligns with broader U.S. trade and manufacturing strategies. In December, the administration announced planned tariffs on Chinese semiconductor exports but delayed enforcement until mid-2027. Recent requirements also mandate that China-bound chips first pass through U.S. testing facilities before import, subjecting them to the 25% tariff.

 

The move forms part of a larger “tariff blitz” by the Trump administration, which in recent months introduced significant duties on sectors ranging from pharmaceuticals to heavy-duty trucks, reflecting an ongoing push to strengthen domestic production and secure critical supply chains.

 

While U.S. companies design many leading semiconductors, most manufacturing occurs overseas. The White House signals that broader tariffs on semiconductors and related products could follow to incentivize domestic production further. Importantly, these tariffs will not overlap with previous duties on copper, aluminum, steel, or automotive parts, avoiding compounded levies on affected trade sectors.

 

#ITCNewsUpdates #BreakingNews #GlobalTrade #Semiconductors #USTariffs #AIChips #SupplyChainSecurity