President Donald Trump on Wednesday signed a proclamation charging a 25% tariff on specific advanced AI semiconductors, including Nvidia’s H200 and AMD’s MI325X. This new levy targets certain chips that manufacturers produce outside the U.S. and pass through the country before exporting to foreign customers.This executive action standardizes the recent decision by the U.S. Department of Commerce to approve shipments of Nvidia’s H200 to vetted buyers in China. It allows these exports while assuring the U.S. government receives a share of the revenue.Nvidia publicly defended the decision. A spokesperson for the company stated, “We applaud President Trump’s decision to allow America’s chip industry to compete,” emphasizing that the policy supports high-paying American jobs. The company assured that it strikes a “thoughtful balance” by offering the H200 to authorized commercial customers.The high demand for these chips is driving the market, and reports suggest that Nvidia may increase production to fulfill early orders from Chinese companies. However, there are regulatory hurdles to navigate in Beijing. China is currently drafting its own rules to limit the volume of foreign semiconductor purchases, aiming to balance its immediate technological needs with the goal of boosting domestic chip production.The proclamation mentions national security concerns, noting that the U.S. currently manufactures only about 10% of its required chips. “This dependence on foreign supply chains is a significant economic and national security risk,” the document states.The order specifically targets chips being exported after passing through the U.S., crucially exempting those imported for domestic U.S. use in research, defense, or commercial sectors.