Trump Allows Nvidia to Sell Faster Chips to China, But There's a Costly Catch

The United States had a surprising detour in its policy on chip exports, as President Donald Trump said Nvidia can indeed sell some more high-end chips to approved customers in China. However, it comes under very strict conditions and a hefty 25% export tariff.

Nvidia H200 Chips Cleared for China With Heavy Restrictions

Under the new rule, Nvidia can supply its H200 chips in China. These chips represent the company's second most powerful processors, which give a huge performance jump from the previous export-compliant models.

For context, H200 chips run up to six times faster than the downgraded H20 models previously allowed, according to Reuters.

The Blackwell B200 chips remain prohibited as they represent Nvidia's most advanced AI hardware. The approved Chinese customers must absorb a 25% export tariff on each purchase of H200.

That move expanded China's legal access to more powerful AI computing power, but the real industry leader, the B200, remains off-limits.

Black Market Chips Still Challenge Export Control Goals

Despite official restrictions, reports indicate that more than $1 billion worth of B200 chips have already entered China through black-market channels. This would raise questions about the efficiency of the export controls in the US and suggest that demand for cutting-edge AI chips in China is unstoppable.

The legal introduction of the H200 may quell some of this underground activity, but tariff and political pressure may yet hobble widespread adoption.

Will Chinese Companies Actually Buy the H200?

While Nvidia is now cleared to ship more sophisticated chips, it is not yet obvious whether Chinese firms will seek them out. The Chinese government has told local firms again to steer clear of US technology in favor of homegrown independence regarding AI hardware.

In response, Huawei has accelerated efforts to match Nvidia and AMD in three years, per GSM Arena. Although analysts debate this aggressively ambitious timeline, it indicates a strategic focus by China on homegrown AI acceleration and reduced reliance on US semiconductor giants.