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NVIDIA is now allowed to sell its second-best H200 processors to China, rather than just the sanction-approved H20 model that China had previously declined to buy, President Trump wrote on Truth Social. The United States will collect a 25 percent tariff on those sales, the Commerce Department confirmed yesterday.
Trump said that he informed China's President Xi Jinping of the decision and that he "responded positively." The Commerce Department is finalizing details and the administration will take the same approach with AMD, Intel and other US companies. He added that the administration would "protect National Security," so the latest Blackwell and upcoming Rubin chips are not part of the deal. The 25 percent tariff would be higher than the 15 percent the White House suggested in August.
Though the administration won't allow NVIDIA to send its latest high-end chips, it was reportedly concerned that the company would lose business to Huawei if it was completely shut out of China's market, according to Reuters. No details about the number of H200 chips or which companies would be eligible to buy them were released. "Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America," NVIDIA said in a statement.
The decision is not without controversy, though. Several Democratic US senators
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The Southern District of Texas announced the seizure of more than $50 million in NVIDIA GPUs bound for China in violation of US export laws. Authorities arrested two businessmen, one of them the owner of a Houston company, accused of smuggling the chips used to train and run AI models.
"Operation Gatekeeper has exposed a sophisticated smuggling network that threatens our Nation's security by funneling cutting-edge AI technology to those who would use it against American interests," said US Attorney Nicholas J. Ganjei. The investigation had been ongoing since at least last year and centers on the illicit export or attempted export of at least $160 million worth of NVIDIA H100 and H200 GPUs. The H200 chips are the very same that the Trump administration announced a revenue-sharing agreement for today, allowing NVIDIA to sell them to "approved customers" in China.
The smuggling operation used a combination of falsified paperwork, purposefully misclassified goods, straw purchasers and even removing the NVIDIA labels on GPUs to ship them to both mainland China and Hong Kong. The conspirators face between 10 and 20 years in prison if convicted.
The H200 chips in question are more powerful than the H20 chip specifically designed to comply with US export restrictions. Production of the H20, however, was reportedly halted shortly after the Trump administration struck a
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