Trump administration clears way for Nvidia H200 chip sales to China with a 25% surcharge

In a notable move, President Donald Trump announced that his administration has granted permission for the sale of Nvidia's H200 artificial intelligence chip to China, with a substantial 25% tariff on the sales. This decision comes just a day after new regulations were published by the U.S. government. The H200 chip, part of Nvidia's Hopper generation, differs from its predecessor, the H20, as it is not specifically designed to be slowed down for export. Trump highlighted that the H200's capabilities have been outpaced by two newer chip generations, specifically mentioning Nvidia's Blackwell and Rubin AI chips. "While it’s not the most advanced, it’s still a solid chip, and there’s demand for it in China and elsewhere. We’ll be earning a quarter of the sales from these chips," Trump stated. Nvidia had previously estimated that the Chinese market for their products could potentially reach $50 billion annually. "We’re allowing these sales, but the U.S. will retain 25% of the revenue from these chips," Trump reiterated. According to a recent filing from the Department of Commerce, the new rule includes requirements such as the exporter confirming adequate supply of H200 chips within the U.S., ensuring that global foundry capacity is preserved for more advanced AI chips intended for the U.S., and establishing that customers have sufficient security protocols in place. Additionally, the chips must undergo independent testing in the U.S. to validate their specifications prior to shipment. Furthermore, the shipment of H200 chips to China will be restricted to 50% of the total volume shipped to U.S. customers. The filing also referenced AMD's MI325X chip. An Nvidia spokesperson expressed approval of Trump’s decision, stating, "We commend the President’s choice to allow America’s chip industry to thrive, fostering high-paying jobs and manufacturing in the country. Offering the H200 to vetted commercial customers aligns well with America’s interests." Critics of the administration, however, argue that such policies inadvertently benefit foreign competitors on established U.S. entity lists, emphasizing that the U.S. should support its domestic industries in competing for legitimate and approved commercial opportunities. Nvidia’s CEO, Jensen Huang, mentioned that there is strong interest in the H200 chip from Chinese clients and confirmed that production has resumed. "Our supply chain is operational again, and H200s are being produced," he remarked during a press conference at the CES event in Las Vegas. However, the future of these chips in China remains uncertain, as the nation aims to bolster its domestic chip production while facing challenges from inferior alternatives. Huang indicated that he does not anticipate any formal announcements from Chinese regulators, stating, "We’re not expecting press releases or big declarations—just purchase orders." Looking ahead, Huang projected that sales of AI chips could reach $500 billion worldwide by the end of 2026, with any sales of the H200 chips to China contributing to this forecast. On the same day, the White House announced a 25% tariff on imports of chips like the H200 that must be tested in the U.S. before being shipped to China.