Nvidia successfully lobbied the Trump administration to approve the export of its H200 AI chips to China, but faced a policy reversal the very next day – President Trump, citing a national security executive order, imposed a 25% tariff on the same chips, rendering the victory short-lived.
This tariff stemmed from a nine-month investigation under Section 232 of the Trade Expansion Act, targeting high-end AI chips such as Nvidia's H200 and AMD's MI325X. The initial intention was to promote domestic chip production, but this created a unique situation: while Nvidia obtained legal export rights, the mandatory third-party testing required by the US must be conducted within the US. Chips manufactured in Taiwan, bypassing US testing, would trigger tariffs, affecting every shipment to China.
The export approval announced by the US Department of Commerce's Bureau of Industry and Security (BIS) this Tuesday, effective January 16, 2026, effectively overturned the Biden administration's comprehensive export ban from a year ago. This was also the result of Nvidia's continued lobbying, during which CEO Jensen Huang communicated directly with President Trump.
Nvidia Lobbying Timeline: From Biden Restrictions to Trump's Easing
January 2025: The outgoing Biden administration included the H200 chip in the Artificial Intelligence Proliferation Rule's export restrictions. At that time, Chinese companies were ramping up their AI infrastructure investments, and Nvidia almost lost a huge amount of revenue from the world's second-largest economy.
July 2025: The lobbying efforts began to bear fruit. The US approved Nvidia's resumption of exports to China of the low-performance H20 chip, designed specifically for the Chinese market, signaling that the Trump administration was reconsidering the restrictions imposed during the Biden era.
December 2025: Jensen Huang met directly with Trump in Washington. A few days later, Trump publicly stated that he would allow Nvidia to sell H200 chips to approved customers in China. Industry lobbying successfully reached the highest levels of the US government.
Export Subject to Strict Conditions; Previous Special Proposal Shelved
The BIS approval stipulated two core conditions: first, H200 shipments to China could not exceed 50% of Nvidia's sales in the US; second, each shipment required verification of chip technical parameters and functions by a third-party laboratory at the US headquarters.
The Trump administration further demanded that chips shipped to China undergo testing via Taiwan through the United States, a transit requirement that became the key trigger for the 25% tariff. The White House also clarified that the tariffs do not apply to chips supplied to U.S. data centers, startups, consumer devices, or the public sector, and the Secretary of Commerce has broad authority to approve tariff exemptions.
This licensing framework changed from the "presumptive rejection" approach of the Biden era to a "case-by-case review" approach, giving Nvidia more room to maneuver, but each transaction remains subject to U.S. oversight. Notably, Trump's proposal last December to have 25% of chip sales remitted to the U.S. government was not included in the final announcement due to doubts about its feasibility and has been shelved in the policy-making process.
Double Obstacles: Limited Access to the Chinese Market, Tariffs Driving Up Costs
Behind Nvidia's successful lobbying lies a struggle between strong demand in the Chinese market and multiple real-world obstacles. Jensen Huang stated at last week's CES in Las Vegas that demand for H200 chips in the Chinese market is "very strong," and the company is expanding its supply chain to prepare for exports, demonstrating its high expectations for revenue opportunities.
However, Chinese authorities have erected multiple barriers: After Nvidia resumed H20 chip exports in July 2025, state media pointed out "security risks" and called for a boycott. The Cyberspace Administration of China also summoned Nvidia to inquire about the potential tracking and remote control risks associated with its chips. According to the Information website, the Chinese government only approves the purchase of H200 chips for special scenarios such as university research laboratories, highlighting the development direction of domestic semiconductor self-reliance.
The 25% tariff further exacerbates Nvidia's predicament: the Chinese market is already cautious about its chips, and the significant price premium brought by the import tariff makes it difficult for Nvidia to truly open up the market, even if it obtains legal export rights, due to economic infeasibility. Following the announcement of the tariff, Nvidia's stock fell slightly in after-hours trading. The company has not yet made a public comment on how to respond to the contradictory policy signals.
Industry Impact and Deep-seated Contradictions in US Semiconductor Policy
The Nvidia case highlights the influence of US tech companies on export control policies—when companies can demonstrate that excessive restrictions harm US competitiveness and fail to achieve national security goals, they can push for policy adjustments. However, the imposition of tariffs the day after the lifting of the ban also exposes the inherent contradictions in the Trump administration's semiconductor policy.
The core background to these tariffs is the insufficient domestic chip production capacity in the US. Currently, the US can only produce 10% of the chips needed domestically, which officials have identified as a "significant economic and national security risk." The US may soon introduce broader semiconductor tariffs. However, the semiconductor industry argues that excessive controls would force the development of China's domestic chip industry. Maintaining a certain level of market access allows US companies to obtain innovation funding while monitoring China's technological progress. National security advocates, on the other hand, believe that exporting high-end AI chips to China, even with restrictions, could still be used in military and surveillance fields, threatening US interests. The 50% shipment cap is precisely the US's compromise.
For Asia-Pacific technology companies, this event sends a clear signal: US export policy is not a fixed strategy, but rather influenced by industry influence and political negotiations. This precedent may encourage other US technology companies subject to export restrictions to adopt similar lobbying strategies.
Currently, the BIS's export policy took effect on January 16, and the tariffs were immediately implemented. Nvidia is facing an unprecedented predicament: the market access to China that it had secured after months of lobbying faces the real risk of losing its gains just 24 hours later due to US tariffs.
