US puts lower levies on foreign chips

Govt will take cut of Nvidia sales to China

- ANA SWANSON TRIPP MICKLE

A chip after it has been packaged at Promex Industries in Santa Clara, California. Much of the chip industry relies on materials from overseas.

(NYT)

President Donald Trump signed a proclamation on Wednesday to impose a 25% tariff on a narrow list of foreign semiconductors, providing a way for the government to earn revenue off the sale of lucrative chips used in artificial intelligence.

The tariff, which was to take effect yesterday, is far more limited than what the president initially threatened. Last year, the administration began an investigation aimed at encouraging tech companies and chip makers to buy semiconductors made in America. But instead of approving sweeping tariffs that would affect the industry, the administration settled on Wednesday for narrower levies that allow it to take a cut of artificial intelligence chips sold to China.

A document released by the White House said a 25% tariff would be put on AI chips made by companies like Nvidia and AMD that are imported into the United States and then reexported to other countries. The tariff would not apply to semiconductors that are brought into the country to be used domestically in data centres or in products for American consumers, industry or the government. But it would allow the US government to collect revenue from the sale of Al chips to China, an idea Trump proposed last year.

The president may still impose broader tariffs on semiconductor imports and products containing them in the near future, the White House said, including a measure that would provide tariff relief for companies that manufacture chips domestically.