President Donald Trump signed a proclamation on Wednesday that entailed a 25% tariff on advanced AI semiconductors.

After months of rumors that the Trump administration was going to impose tariffs on semiconductors, a tariff has been announced for some chips. The tariff only applies to certain semiconductors, including the Nvidia H200 advanced AI chips set to ship to China. President Donald Trump signed a proclamation on Wednesday that entailed a 25% tariff on advanced AI semiconductors that have been produced outside the U.S. and then pass through the U.S. before being exported to customers in other countries. This news formalizes a key component of the U.S. Department of Commerce’s decision to give Nvidia the green light to start shipping its H200 advanced AI chips to vetted customers in China in December. It also includes chips from other companies, including the AMD MI325X. In spite of the tariffs, Nvidia publicly cheered the move, which allows it to sell the chip to approved customers. “We applaud President Trump’s decision to allow America’s chip industry to compete to support high-paying jobs and manufacturing in America. Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America,” an Nvidia spokesperson emailed TechCrunch. There is demand for these H200 semiconductors. Nvidia was reportedly considering ramping up production on these chips due to a rush of early orders from Chinese companies. Demand is just one factor, though. The other is how the Chinese government decides to regulate these imports. China finds itself in a similar, yet different situation to the U.S. when it comes to chip production and the global AI race. China wants to boost its domestic semiconductor industry, but the country also doesn’t want to fall behind while it waits for its domestic tech to catch up to international rivals. The Chinese central government is working to draft rules and guidelines of how many semiconductors Chinese companies can purchase from overseas, according to reporting from Nikkei Asia. This would allow for some purchasing of Nvidia’s chips and would be a reversal from the country’s current adversity toward the chip imports. Wednesday’s executive order does not apply to chips that are imported into the U.S. and then used in the country for research, defense, or commercial purposes. “The United States currently fully manufactures only approximately 10% of the chips it requires, making it heavily reliant on foreign supply chains. This dependence on foreign supply chains is a significant economic and national security risk,” the proclamation stated.

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