- Donald Trump announced a 25% tariff on select semiconductors, citing national security and aiming to boost U.S. chip production.
- The order targets chips imported to the U.S. that are not used domestically for AI and are then exported, and may be expanded to broader semiconductor imports.
- The proclamation noted the U.S. currently manufactures only about 10% of the chips it needs, creating supply-chain and security risks.
- NVIDIA shares fell just over 1% during Wednesday trading and another 0.5% after hours; AMD also declined while Intel rose 3%.
- The move followed criticism of a decision to allow the sale of NVIDIA’s H200 chips to China and aims to reduce reliance on foreign manufacturers such as those in Taiwan.
On Wednesday, U.S. President Donald Trump announced a 25% tariff on selected semiconductors in a proclamation that cited national security and sought to encourage chip production inside the United States to reduce reliance on foreign suppliers. The policy targets specific advanced computing chips from companies including NVIDIA and AMD, and it follows controversy over approval to sell NVIDIA’s H200 chips to China.
The White House explained that the action responds to low domestic manufacturing capacity. “The [Commerce] Secretary found that the United States’ capacity to manufacture semiconductors is too low to meet projected national defence needs and to match the requirements of a growing commercial industry,” the proclamation said, adding that “The United States currently fully manufactures only approximately 10 percent of the chips it requires, making it heavily reliant on foreign supply chains.”
The tariff applies specifically to chips imported into the U.S. that are not used domestically for Artificial Intelligence tasks but are later exported to other countries. The order covers a “very narrow category of semiconductors that are an important element of my Administration’s AI and technology policies,” and the White House said broader tariffs on semiconductors and derivative products could follow to further incentivize domestic production.
Financial markets reacted quickly: NVIDIA stock slipped just over 1% at the close on Wednesday and fell an additional 0.5% in after-hours trading, while AMD also declined. Meanwhile, Intel gained about 3% on Wednesday, continuing a rally of roughly 153% since January 2025.
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