Imposing a 15% "Export Tariff" on Advanced AI Chips from Major Tech Companies Sent to China by Trump
The tech industry has been shaken up by an unconventional export tax agreement between Nvidia, AMD, and the U.S. government. This deal, struck in August 2025, marks a unique revenue-sharing arrangement where the companies will pay the U.S. government 15% of their revenue from AI chip sales to China in exchange for export licenses permitting those sales [1][3].
Background
Negotiated during a White House meeting on August 6, 2025, between Nvidia CEO Jensen Huang and then-President Donald Trump, the deal followed intense discussions about export control restrictions on AI semiconductor sales to China [1][3]. Initially, Trump sought a 20% cut but agreed to 15% after negotiation with Nvidia's CEO [1][2]. The deal repealed prior export bans that halted Nvidia’s H20 and AMD’s MI308 chips from entering the Chinese market, reflecting a strategic balancing act to maintain U.S. economic interests in China amid geopolitical tensions and supply chain concerns [3][1].
Implications
The arrangement raises several questions, including legal and constitutional ones. Legal experts question whether this constitutes an unconstitutional export tax since the U.S. Constitution prohibits duties on exports (the "export clause"). Experts note no precedent for such a revenue-sharing or "export tax" deal, warning it might be struck down if legally challenged [2]. The arrangement creates a direct revenue stream for the U.S. government from private companies’ international sales, an unusual industrial policy tool seen by some critics as a form of government leverage or "blackmail" over private firms [3].
The deal also has implications for trade and technology relations. The agreement ensures continued American chip supply in China while maintaining U.S. control and revenue collection from sales critical to the AI industry. However, Chinese regulators have raised security concerns about these chips possibly being tracked or remotely disabled, adding a layer of geopolitical complexity [1][2].
Future Effects
This revenue-sharing model might set a precedent for similar agreements with other strategic sectors or companies, blending export control with revenue generation. Legal scrutiny could lead to adjustments or repeal if found unconstitutional, but it might also prompt Congress or courts to clarify authority over export revenues. The deal could influence U.S.-China tech trade dynamics, potentially easing some tensions while preserving U.S. interests in the advanced semiconductor market [1][2][3][4].
In summary, this groundbreaking agreement between Nvidia, AMD, and the U.S. government is an unprecedented blend of export permission linked to a revenue-sharing "export tax" that is politically and legally contentious, with significant potential to transform U.S. export policy and tech industry-government relations going forward [1][2][3][4].
[1] New York Times, "U.S. Strikes Unprecedented Deal with Nvidia and AMD to Gain Revenue from AI Chip Sales to China," August 7, 2025. [2] Washington Post, "Legal Experts Question Constitutionality of U.S.-Nvidia-AMD Revenue-Sharing Deal," August 10, 2025. [3] Bloomberg, "Nvidia and AMD Agree to Pay U.S. Government 15% of Revenue from China AI Chip Sales," August 9, 2025. [4] CNBC, "Nvidia and AMD Strike Deal with U.S. Government to Sell AI Chips to China," August 8, 2025.
- The unique revenue-sharing arrangement between Nvidia, AMD, and the U.S. government over AI chip sales to China, as reported by Gizmodo, could set a precedent for other strategic sectors or companies in the tech industry.
- The future of artificial-intelligence development in the tech industry may be influenced by the political and legal implications of this revenue-sharing deal, as some critics view it as government leverage or "blackmail" over private firms.
- This deal could have far-reaching effects on the general news landscape, with many news outlets discussing its potential impact on U.S.-China tech trade dynamics and the constitutionality of such revenue-sharing agreements.
- There are fears that Finance ministries around the world might take note of this arrangement and seek similar revenue streams from tech companies, potentially leading to a shift in the balance of power between government and industry.
- The tech industry is closely watching the developments surrounding this export tax agreement, as its future could hinge on the outcome of any legal challenges or adjustments made to the agreement, which could in turn impact the future growth of artificial-intelligence and other advanced technologies.
