The 15% federal levy on Nvidia’s exports to China, a new sign of Donald Trump’s interference in economic life.
Nvidia to Export Chips to China with Royalty Agreement
In an unprecedented move, confirmed by Donald Trump at the White House on Monday, August 11th, microchip firm Nvidia, a leader in artificial intelligence (AI) and the world’s largest company by market capitalization, will be authorized to export H20 chips to China. In exchange, Nvidia will pay 15% royalties to the U.S. Treasury. Trump recounted his negotiation with Nvidia CEO Jensen Huang.
“The H20 is obsolete but still has a market. So I said, ‘Look, I want 20%… for our country, for the United States, not for me…’ And [Jensen Huang] asked, ‘Would you go as far as 15%?’ So we negotiated a little deal,” the President stated.
The deal, first reported by the *Financial Times*, has generated significant buzz. Donald Trump is pursuing a microchip-based diplomacy with Beijing. The H20 AI chips were developed by Nvidia for the Chinese market after the U.S. imposed export restrictions on advanced AI chips in late 2023. The Trump administration initially banned their sale in April during the height of the trade war with China but reversed the ban in July. The agreement also applies to AMD’s (Advanced Micro Devices) MI308 chips.
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