United States to Continue Formalizing Additional Agreements After Nvidia's Lead
The U.S. government has announced a new policy to impose a 15% tariff on AI chip exports by Nvidia and AMD to China. This decision is part of a broader strategy to manage the global semiconductor landscape.
Initially, under President Donald Trump, the U.S. had banned the sale of most advanced AI chips to China, citing national security concerns. However, Trump has since lifted this ban, allowing sales to proceed with the condition that U.S. chipmakers must remit 15% of the revenue from these sales to the U.S. government.
This arrangement is seen as both an "export tax" and a form of state intervention in the semiconductor business. The decision reflects a realization that export controls may not effectively prevent China from accessing advanced technology.
Economic Impact
The U.S. government estimates that this arrangement could generate significant revenue, potentially up to $2 billion, which could be used to support strategic sectors in the U.S. electronics industry. However, this 15% tariff could squeeze the profits of Nvidia and AMD, as well as their suppliers like TSMC and Samsung.
Strategic and National Security Impact
Critics argue that lifting the export ban could help China catch up in the race for global economic and military dominance, potentially undermining U.S. national security interests. The policy may accelerate China's self-reliance in chip technology, as it could incentivize China to develop its own AI chips, similar to how Huawei developed 5G technology.
Global Trade Dynamics
The U.S.-EU deal on a 15% tariff cap for semiconductors highlights the broader trade dynamics at play, where tariffs are used as tools to manage trade relationships and protect strategic interests. These developments could reshape the global semiconductor industry, with implications for trade balances and technological advancements across various regions.
The agreement applies specifically to chipmakers Nvidia and AMD. Nvidia's H20 processor, the most powerful for Artificial Intelligence, is now allowed for export to China under the new deal. AMD's in-house chip MI308 also falls under the new deal for exports to China.
Nvidia has not shipped H20 chips to China for months due to earlier export restrictions. Nvidia's CEO, Jensen Huang, lobbied for the reversal of the export restrictions. Nvidia stated that it hopes the new export controls will allow America to remain competitive in China and globally.
The tariff revenue could potentially reach several billion dollars due to the high demand for powerful AI chips. The agreement is unique at the moment but could potentially be expanded to other industries, according to Treasury Secretary Steven Mnuchin.
The U.S. community policy now includes an export tax on AI chip exports by Nvidia and AMD to China, as part of a broader strategy in the business sector. This policy, also seen as a form of finance intervention in technology, could potentially generate significant revenue, up to $2 billion, which could be used to support strategic sectors in the U.S. electronics industry. However, this employment policy could squeeze the profits of Nvidia and AMD, thus impacting their suppliers like TSMC and Samsung.
