Trump Administration Greenlights Nvidia H200 Chip Sales to China—With a 25% Fee and New Testing Hurdles

Washington gives a conditional nod to advanced AI chip exports, but the price of entry just got steeper.

The Gatekeepers' Toll

A fresh 25% tariff now sits atop every H200 unit destined for Chinese buyers. That's not a suggestion—it's the new cost of doing cutting-edge business across the Pacific. The move reshuffles the entire value proposition for Chinese tech firms scrambling for next-gen compute power.

Prove It Works

Beyond the financial hit, a new testing mandate lands on the table. Each chip shipment must now pass a gauntlet of performance and compliance checks before it ever leaves the dock. It adds layers of delay and uncertainty to supply chains already stretched thin by geopolitical tension.

Silicon Diplomacy in Action

This isn't a ban; it's a throttling. By allowing sales but attaching significant strings, the administration walks a tightrope—aiming to curb China's AI advancement without completely crippling a lucrative market for U.S. semiconductor giants. The industry gets to keep a revenue stream, just a more expensive and complicated one to manage.

The bottom line? Advanced technology now has a clear political price tag. For finance watchers, it's another reminder that in the high-stakes chip game, regulatory risk can be a heavier drag on margins than any production flaw. The market hates uncertainty more than it hates taxes, and this move delivers a double dose of both.

Massive Chinese demand exceeds supply

Chinese technology firms have already ordered more than 2 million H200 chips, which cost about $27,000 each, according to a report from last month. This number is much higher than Nvidia’s current stock of 700,000 chips.

At the Consumer Electronics Show in Las Vegas last week, Nvidia’s CEO Jensen Huang told reporters the company was increasing production of H200 chips. He said strong demand from China and other countries was pushing up rental prices for H200 chips already running in cloud computing centers.

Saif Khan, who worked as director of technology and national security on the White House National Security Council during Joe Biden’s presidency, warned the new rule WOULD give China’s AI programs a major boost.

“The rule would allow about two million advanced AI chips like the H200 to China, an amount equal to the compute owned today by a typical U.S. frontier AI company,” Khan stated. “The Administration will also face challenges enforcing the rule’s know-your-customer requirements that restrict Chinese cloud providers from supporting nefarious uses.”

Policy reversal from Biden Era

These worries had led the Biden administration to block sales of advanced AI chips to China completely. However, the Trump administration, guided by White House AI director David Sacks, believes selling advanced AI chips to China will discourage Chinese rivals like the heavily penalized Huawei from working harder to match the top chip designs from Nvidia and AMD.

When Trump announced the sales last month, he promised they would ship to China “under conditions that allow for continued strong National Security.”

Questions remain about whether the administration will actually enforce any restrictions on chip shipments, or even if Beijing will permit these sales inside China. Given past smuggling operations worth $160 million, enforcement challenges loom large. Last month, reports indicated the U.S. had started a review that could lead to the first chip shipments to China.

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