⁠Trump Has Announced New Tariffs On Nvidia And AMD, What Does This Mean?

The White House confirmed that President Donald Trump signed a proclamation placing a 25% tariff on selected advanced computing chips imported into the United States. The measure covers products such as Nvidia’s H200 AI processor and AMD’s MI325X chip. The announcement followed the release of a national security order on Wednesday, January 14, according to Reuters.

The proclamation came after a 9 month investigation carried out under Section 232 of the Trade Expansion Act of 1962. The inquiry examined how imports of high performance semiconductors affect national security. The White House said the findings supported import duties on chips that meet certain performance thresholds, along with devices that contain them.

Reuters reported that the order links the tariff to concerns about supply chains. The proclamation said the United States currently makes about 10% of the chips it needs. That figure, quoted directly from the order, came from the White House and underlined the scale of reliance on overseas production.

The measure applies only to a defined group of advanced chips. Shares in Nvidia, AMD and Qualcomm traded slightly lower in after hours trading after the news, according to Reuters, showing how closely financial markets followed the decision.

Which Products Are Excluded From The Tariff?

The White House said the tariff would not apply to chips imported for use in US data centres. Data centres are among the largest buyers of AI processors and the exclusion limits direct cost pressure on that area of computing. Startups also fall outside the tariff when importing these chips, the fact sheet said.

Consumer products that don’t link to data centres also are outside the scope. The same applies to non data centre civil industrial uses and applications tied to the US public sector. The White House described the tariff as narrow in scope, with clear boundaries around where it applies.

The proclamation gives the Commerce Secretary, Howard Lutnick, discretion to approve further exemptions. Reuters reported that this power allows flexibility if specific cases arise where imports serve domestic manufacturing needs.

An annex to the order clarified that the 25% duty would not stack on top of other Section 232 tariffs. Semiconductors covered by this action would not face duties linked to copper, aluminium, steel, autos or truck parts, according to the fact sheet.

Why Does The Administration Link Chips To National Security?

The proclamation described heavy reliance on foreign chip supply chains as an economic and national security risk. It said semiconductors support economic strength, industrial capacity and military capability in the United States.

The White House explained that domestic production of semiconductors and equipment such as advanced lithography and etching tools does not meet demand. This gap has left the country dependent on overseas sources to supply core technologies.

Reuters mentioned that many US designed chips are made abroad, often in Taiwan by Taiwan Semiconductor Manufacturing Co. That reliance featured prominently in the reasoning behind the tariff, even though TSMC did not comment on the order.

The administration said that encouraging domestic chip production would lower exposure to disruption. The Section 232 investigation concluded that current import patterns threaten to impair national security, according to the proclamation text.

What Will Happen For Chip Imports And Trade Policy?

The fact sheet said President Trump may place some more tariffs on semiconductors and related products in the near future. It also mentioned a possible tariff offset programme tied to domestic manufacturing incentives, echoing earlier announcements.

Reuters reported that in December Trump spoke about tariffs on Chinese semiconductor imports linked to older technology chips, following a Section 301 investigation launched under the previous administration. That action was delayed until June 2027.

This week, the administration also required chips bound for China to pass through the United States for third party testing. When those chips enter the country, they fall under the new 25% tariff, Reuters said.

AMD said it complies with all US export control laws and policies. Nvidia did not respond to a request for comment, according to Reuters. The White House framed the latest order as building on earlier trade actions covering steel, aluminium, copper, autos and lumber, all justified on national security grounds.

Tom Fairbairn, Distinguished Engineer at Solace commented on the matter, saying: “Recent political uncertainty and volatility in global trading, specifically the Trump administration’s rapidly changing tariffs, have thrown a spotlight on global supply chains: how fast can your supply chain react? The current pace of policy U-turns and brinkmanship make clear that businesses need to move faster than the disruption.

“There are numerous mitigations, from alternative and diversified sourcing arrangements to third party or near-shored manufacturing. If these mitigations cannot be evaluated, simulated and implemented quickly, they risk being applied too late or perhaps even counter-productively.

“Supply chain IT systems and data must be up-to-date, fast acting, agile and flexible. Traditional batch or even API based approaches often don’t provide this level of agility and flexibility. Businesses that have used Event Based Integration are able to simulate the effect of policy changes as they occur and support supply chain changes as soon as they need to be applied. Intelligent meshes of multiple AI Models and Agents can adjust sourcing, logistics, and compliance strategies in real time, without disrupting core systems. Can your supply chain IT support an adaptive supply chain?”