The Trump administration has introduced a 15% fee on NVIDIA and AMD’s AI chip sales to China, with the goal of using the revenue to help reduce the US debt. Treasury Secretary Scott Bessent shared the news during a Bloomberg interview, revealing that the idea was proposed by President Trump. According to Bessent, the fee applies only to NVIDIA’s H20 product, which is the company’s AI GPU.
This move could eventually extend to other industries over time.
While some critics question whether this deal could hurt NVIDIA’s profitability, Bessent believes it will benefit the company by helping it expand into China. He argued that the fees would give the US a stake in NVIDIA’s success in China, potentially making NVIDIA’s chips the standard for Chinese technology. “The President is one of the most open-minded people I know,” Bessent said, emphasizing that Trump’s approach is rooted in first principles and asking why things are done a certain way.
When asked about national security concerns, Bessent asserted that there were no risks involved in selling NVIDIA’s H20 GPUs, as they are not the latest chips. The Trump administration’s focus is on “secure trade” rather than unfettered trade, ensuring that the highest-level chips are not sold to certain nations. He also mentioned that the Chinese government had raised concerns about potential backdoors in NVIDIA products, which he interpreted as a sign that China fears NVIDIA’s chips becoming the standard in their market. Bessent echoed claims that China has been “piggybacking” on US technology and that these concerns were indicative of China’s desire to steal US tech.
Despite these issues, Bessent emphasized that the Trump administration is not overstepping into private business but rather trying to shift trade from being unfettered to being “secure and fair.” The revenue from the 15% fee will be used to help pay down US debt, a plan Bessent is confident will benefit the nation. He also mentioned provisions in Trump’s “One Big Beautiful Bill,” including no taxes on tips or overtime, which he believes benefit lower-wage earners in America.