U.S. Approves Limited Nvidia Chip Exports to China with 25% Fee
The United States will permit the export of Nvidia’s H200 artificial intelligence processors to China, subject to a 25% government fee, President Donald Trump announced on Monday. The decision marks a significant policy shift, balancing national security concerns with the goal of maintaining U.S. leadership in advanced chip technology.
A Compromise on AI Chip Exports
The move ends months of internal debate in Washington over whether Nvidia and other chipmakers should continue limited exports to China. The H200 chips, Nvidia’s second-most advanced AI processors, fall below the firm’s flagship Blackwell series, which remains restricted.
Trump said he informed Chinese President Xi Jinping about the decision, adding that Xi “responded positively.” The Commerce Department will finalise export conditions, which will also apply to Advanced Micro Devices (AMD) and Intel. Trump emphasised that the arrangement would “protect national security, create American jobs, and keep America’s lead in AI.”
Nvidia’s shares rose 2% in after-hours trading following the announcement, building on a 3% rise earlier in the day after a report by Semafor.
How the Fee Will Work
A White House official said the 25% fee would function as an import tax collected in the United States after chips are shipped from Taiwan, where they are manufactured. The processors will undergo a national security review before being exported to approved commercial customers in China.
Nvidia described the decision as a “thoughtful balance,” saying it allows continued cooperation under strict oversight. Intel declined to comment, while the Commerce Department and AMD did not respond to requests for comment.
Strategic and Security Reactions
The decision has sparked a mixed reaction in Washington. Critics warned that the move risks strengthening China’s technological and military capabilities. Former Commerce Department official Eric Hirschhorn called the approval “a terrible mistake” that undermines long-standing bipartisan policies restricting technology that could enhance China’s military.
Democratic senators issued a joint statement labelling the decision a “colossal economic and national security failure.” Republican Representative John Moolenaar, who chairs the House China Select Committee, echoed those concerns, arguing that China would replicate Nvidia’s technology and undermine U.S. competitiveness.
Beijing’s Response and Market Outlook
China’s foreign ministry offered a measured response, saying the country believes in cooperation that delivers “mutual benefits.” Analysts expect Beijing to adopt a more conciliatory tone toward Nvidia, especially following Trump’s communication with Xi.
“The H200 is far more valuable to China than the downgraded H20 chips,” said George Chen, partner at The Asia Group consultancy. “I expect Chinese regulators and state media to take a softer stance toward Nvidia.”
However, experts caution that any easing may be temporary. “China will stay focused on developing its own advanced chip-making capabilities,” said Bo Zhengyuan of Plenum consultancy.
According to the Institute for Progress, the H200 is nearly six times more powerful than the H20 chips currently allowed for export. Nvidia’s Blackwell chips, used domestically, are roughly 1.5 times faster for AI training and up to 10 times faster for some applications.
The approval marks a strategic middle ground—allowing limited trade while ensuring U.S. oversight—though it is likely to remain a flashpoint in the evolving technology rivalry between Washington and Beijing.
with inputs from Reuters
