Trump Imposes 25% Tariff on Advanced AI Chips to Safeguard National Security

On January 14, 2026, President Donald Trump signed a significant Proclamation that imposes an immediate 25% customs duty on the importation of specific advanced microchips and associated technology products into the United States. This decisive action was taken under the authority of Section 232 of the Trade Expansion Act of 1962, which grants the head of state the power to adjust imports if they are found to jeopardize national security.

The implementation of these tariffs follows a detailed investigation led by Secretary of Commerce Howard Lutnick. The inquiry determined that the current reliance on semiconductor imports constitutes a threat to national security, primarily due to insufficient domestic manufacturing capacity in vital sectors, including advanced lithography and etching tools. These tools are essential for the production of the next generation of computing hardware.

Data provided by the White House highlights a concerning imbalance in the technology sector: the United States currently accounts for nearly one-quarter of global semiconductor consumption but produces only about 10% of the world's supply. This heavy dependence on foreign supply chains is viewed as a major strategic and economic risk, affecting the defense industry and 16 critical infrastructure sectors across the country.

The new 25% levy is specifically targeted at a select group of high-end computing chips, most notably the Nvidia H200 and AMD MI325X models, which are indispensable for the advancement of artificial intelligence. To balance this move, the Trump administration has outlined several critical exemptions to the policy to ensure continued domestic innovation and growth.

Specifically, the 25% duty will not be applied to microchips imported for the purpose of expanding domestic production capabilities, nor will it affect those used in American data centers, by emerging startups, or for research and development (R&D) initiatives. This approach is intended to protect the American tech ecosystem while encouraging the reshoring of vital manufacturing processes.

In conjunction with the tariffs, Secretary Howard Lutnick has proposed a compensation program for international companies that choose to invest in semiconductor manufacturing facilities on American soil. This initiative is part of a comprehensive two-stage plan designed to shift the global semiconductor landscape in favor of the United States.

The policy also involves a unique diplomatic and commercial arrangement regarding Nvidia's international sales. Under the terms of the proclamation, Nvidia is permitted to export its H200 chips from Taiwanese manufacturing sites to mainland China, provided the U.S. government receives 25% of the revenue from these transactions. President Trump has confirmed that the federal government will secure this 25% share from the sales of these highly sought-after chips.

The Trade Expansion Act of 1962, originally enacted under President John F. Kennedy, has been utilized sparingly in the past, with notable applications in 1979 and 1982. President Trump previously invoked this law in 2018 to implement tariffs on imported steel and aluminum, demonstrating his administration's willingness to use executive authority to protect domestic industries.

To ensure the effectiveness of these measures, President Trump has directed the Secretary of Commerce and the U.S. Trade Representative to provide a formal report on the progress of trade negotiations within 90 days. This upcoming review could serve as a catalyst for the introduction of even more extensive tariffs depending on the geopolitical and economic climate at that time.