Trump Targets Taiwan, China Supply Chains: President Slaps 25% Tariffs On Nvidia, AMD AI Chips Under National Security Order

On Wednesday, President Donald Trump imposed a 25% tariff on select high-end artificial intelligence chips from companies like Nvidia Corp (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD).

Tariffs Target Advanced AI Chips After Lengthy Probe

The White House said the tariffs apply to certain high-performance semiconductors, like Nvidia's H200 AI processor and AMD's MI325X, following a nine-month investigation under Section 232 of the Trade Expansion Act of 1962.

The probe concluded that U.S. dependence on foreign-made chips poses economic and security risks.

"The United States currently fully manufactures only approximately 10 percent of the chips it requires, making it heavily reliant on foreign supply chains," the proclamation read, calling that reliance a "significant economic and national security risk."

The move is aimed at encouraging chipmakers to expand domestic production and reduce reliance on manufacturing hubs such as Taiwan.

In November 2025, it was reported that the Trump administration is pressing Taiwan to increase semiconductor investments in the U.S. and expand training programs for U.S. chipmaking workers.

White House Emphasizes Narrow Scope, Key Exemptions

In a fact sheet shared by the White House, it stressed the tariffs are narrowly targeted and will not disrupt the broader U.S. AI ecosystem.

The duties will not apply to chips or devices imported for U.S. data centers, startups, non-data-center consumer products, civil industrial uses or public sector applications.

Commerce Secretary Howard Lutnick has broad authority to grant additional exemptions, giving the administration flexibility in how the tariffs are applied.

China Policy Adds Another Layer Of Complexity

The announcement follows Trump's December pledge to impose tariffs on Chinese semiconductor imports over Beijing's "unreasonable" efforts to dominate the chip industry, though those measures were delayed until June 2027.

The administration now also requires China-bound chips made in Taiwan to pass through the U.S. for third-party testing. Once they enter the U.S., they become subject to the new 25% tariff.

Trump has also said he would allow Nvidia to sell certain advanced chips to China in exchange for a share of the proceeds, a proposal legal experts have questioned.

Price Action: Nvidia shares fell 0.21% after hours and AMD slipped 0.20%, according to Benzinga Pro.

Benzinga Edge Stock Rankings place Nvidia in the 94th percentile for growth and the 97th percentile for quality. Click here to compare its performance with peers such as AMD, TSMC and others.

Photo: dee karen / Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.