Export Tariff This Time?…"NVIDIA·AMD to Remit 15% of China Chip Export Revenue to U.S. Government"

Bloomberg: "An unprecedented export tax in modern corporate history"

Experts: "Trading national security for Treasury revenue"

It appears that the Trump administration's efforts to secure fiscal revenue have now extended to export tariffs. NVIDIA and AMD have agreed to pay 15% of the revenue from AI chips sold in China to the U.S. government in exchange for permission to export artificial intelligence (AI) chips to China. On the 11th (local time), international media outlets such as the Financial Times and Reuters reported that NVIDIA will remit 15% of its export revenue from the H20 AI accelerator and AMD from the MI308 accelerator to the U.S. government, according to anonymous sources. Another U.S. official stated that as of last Friday, the Department of Commerce had begun issuing licenses for H20 chip exports to China. Bloomberg pointed out that such a targeted and selective export tax is almost unprecedented in modern corporate history.

According to the Financial Times, which first reported on the issue, the Trump administration has yet to decide how these funds will be used. However, U.S. analysts responded with widespread criticism. Joseph Gertz, a senior fellow at the Center for a New American Security in Washington, D.C., questioned, "If selling H20 chips to China is a national security risk, then they prohibit exports, but if not, do they impose 'fines' on the exports?" He also criticized the policy as being "truly remarkable."

Howard Lutnick, the U.S. Secretary of Commerce, stated in July that the resumption of AI chip sales was part of negotiations with China to secure rare earth elements. In an interview with CNBC, he described the H20 as "NVIDIA's fourth best chip." Lutnick said that allowing Chinese companies to use American technology ensures continued reliance on the U.S. technology stack, which serves American interests. Other U.S. officials affirmed that the Trump administration does not consider the sale of H20 or equivalent chips to China as a national security threat.

Alastair Phillips-Robins, who served as an advisor in the Commerce Department during the Biden administration, criticized the report by stating, "If this is true, it suggests the Trump administration is trading national security for Treasury revenue."

Herbert Chen, an analyst at Melbourne Vantage Market interviewed by Bloomberg, pointed out, "Ultimately, barriers like this to entering China are likely to force NVIDIA and AMD to abandon efforts to expand their businesses in the Chinese market."

According to Reuters, NVIDIA recorded $17 billion in revenue from China in its fiscal year ended January 26, accounting for 13% of its total revenue. AMD's revenue share from China was even higher, reporting $6.2 billion in sales in 2024, representing 24% of its total revenue.

Even if the U.S. government imposes export tariffs on NVIDIA and AMD's exports to China, the fiscal gain is expected to be limited. Based on pre-suspension H20 exports to China, quarterly sales reached up to $7 billion, which could translate into as much as $1 billion (approx. ₩1,390 trillion) per quarter in government revenue.

Both NVIDIA and AMD stated it will take time to resume production of products specifically for the Chinese market.

Morgan Stanley estimated that if exports to China resume, AMD could generate an additional $3 billion to $5 billion in revenue in 2025. Morgan Stanley also estimated that Chinese alternatives such as Huawei's Ascend chips already account for 20–30% of local demand in China.

Bay Sen Ling, Managing Director of Union Bancaire Privée in Singapore, commented, "Given the U.S. government's large fiscal deficit and its desire to collect tariffs, it is clear that they are in need of funds."

Guest reporter Jung-Ah Kim kja@hankyung.com