Trump’s Nvidia Deal and Semiconductor Tariffs Signal New Trade Strategy

US President Donald Trump, like the presidents known for him, began to revitalize the American conductor industry. The fact that it revolves around it in a way that will release the opposite results that it seems to not disturb it at all.

In an attempt to re -make chips to the United States, Trump has seen the idea of high definitions like 100 percent Based on the imports of critical ingredients, most of which come from US allies in Asia, unless companies pledge to invest in local American manufacturing.

The continuous investigation of the administration in the dangers of national security from importing the goals of the target chips is wider, which is likely to target everything that is imported and which includes chips, from gangs to smartphones. But it becomes greater: that Section 232 Investigation It also targets semiconductor machines, making it difficult to rebuild manufacturing. The investigation can be concluded this month and opens the door to official definitions, in the wake of the other 232 cases of critical national security threats such as steel, copperAnd Car parts.

But the Trump administration does not just want to make it more expensive for us to buy semiconductors that affects them. His last step – which seems to be Illegal– It will make American companies more expensive for American companies to sell advanced chips for geopolitical enemies such as China by shipping 15 percent export fees for previously banned US technology shipments by companies such as NVIDIA and AMD. The immediate goal of the administration with this unprecedented measure was to ensure the continuation of a trade truce with China.

The result: Trump’s approach to what has become the decisive industry of the modern information economy will be able to weaken American companies at the same time While strengthening One of its competitors in Washington.

“The issue we play now is that Trump has explicitly led to the restrictions of these national security restrictions, which until recently were traditional in a separate bucket,” said Lisa Topin, the former director of China at the National Security Council under both Biden departments and the first Trump.

“If this is an emergency of national security, at least do this well,” said Philip Lak, who was a deputy economist in the Ministry of Foreign Affairs in the Biden administration, who is wrestling with similar dilemmas.

When it comes to chips, Commercial necessities have occupied a rear seat for national security concerns over the past eight years. Topin, the administrative director of the research company that focuses on China Garnaut Global. “The commission is 15 percent of the explicit strikes of water.”

Amd did not respond to a request for comment. A NVIDIA spokesman said in a statement sent via the company that the company “”Follow the rules determined by the US government for our participation in global markets. “

In the case is Nvidia’s H20 Chip, which was created to comply with the export control items by the Biden administration but then it was subject to additional export controls themselves. Trump administration initially I keep these restrictions in place Before reversing the sudden course this week.

Trump justified his decision on Monday by calling H20 “Outdated“Chip that China already has alternatives through its local hero, Huawei.

“China has a large number of local chips to meet its needs,” Nafidia said in a statement. “The ban on the sale of H20 in China will not only harm the economic and technological leadership with the national security port.”

This is one argument: that keeping China on American chips will ensure American technological excellence.

“When the Biden Administration witnessed the promise of humiliating capabilities through control, this White House appears to have been purchased more than the idea that the best way to maintain dominance is exactly by controlling the foreign market,” said Emily Benson, head of the Biden strategy.

But China has spent a decade in the race to achieve it in China, a local domination plan for all emerging technologies, including chips. Some, like Topin, are concerned that contentment with our elements in export will not make its way to equal semiconductor with the United States.

““China wants to mimic this, and they are working to do so, so the more pressure on it from NVIDIA on how to do these things and build this ecosystem, the more they can remove NVIDIA,” said Topin.

Then there is the one in the coming side From the United States manufacturing equation. The Biden Administration, just like the Trump administration before it, sought to rebuild the American semiconductor industry that was previously dominant but, as in many manufacturing sectors, has gave up driving in recent decades of low -cost producers in Asia.

Based on the basis of the Trump administration, Biden fell into the chips and science chips law in 2022, which provided subsidies to enhance investment in the American chips industry, among a group of other incentives. The idea was to restore the critical parts of what the heights became the leaders of the digital economy, that is, the ability to control the supply of the components that Artificial intelligence leadership And many advanced defense techniques.

The companies answered the call enthusiastically, and the investment Hundreds of billions of dollars During the Biden Administration to build chips factories – known as manufacturing factories or the “Burundian Armed Forces” – in the United States, was driven by more than $ 30 billion in the chips law suit.

Although Trump is asking congress earlier this year Canceling the legislationThere was no follow -up. In fact, the Global Mosques Manufacturing Company Taiwan Industrialization (TSMC) announced an additional investment of $ 100 billion in its American operations in March, with Trump proudly Promotion This investment is from the White House minutes.

While Trump is hardly suffering from allergies State capitalismThe definitions of subsidies are preferred, although the evidence is that the unexplored import taxes imposed on American companies and consumers Do a little To pay the capital investment.

“In the Biden Administration”, we were trying not to do so because the customs tariff is not the best tool. It will simply increase the cost of everything. “

Not only is Trump officials, former Biden, economists, or commercial experts who also say this. He told almost all participants in the chips work, from manufacturers to industry associations to the governments of large countries such as Taiwan and South Korea, the Trump administration that the proposed definitions were a terrible and fair idea in General comments During Section 232, the investigation.

“We note that the imposition of definitions on some critical display inputs and some chips carries a great danger of unintended but dangerous damage to the American semiconductor industry and estuary sectors”, “The Association of Semiconductor Makers books.

“A wide tariff or import restrictions on semiconductors, [semiconductor-making equipment]It is possible that its derivative products, instead of strengthening them, will undermine local production and US local capabilities. ” Girl Computer and Communications Industry Association.

It was the Korean Semiconductor Industry Association The most lucid: “Ultimately, imposing an additional tariff on the materials and equipment of critical conductors will slow progress towards the goals of the United States to enhance industrial competitiveness and technological leadership, while reducing the global competitiveness of American companies within the global supply chain and delaying incentives for long -term investments.”

The problem is not only that the customs tariff for semiconductors will make most of the products more expensive and do not do much to rebuild manufacturing. The problem with the Trump administration approach, including the tariff points for companies, such as Apple, which pledges to invest in American factories, or Fallen fees For chip makers who want to continue selling abroad, it increases the basis for the administration already Summoning national security Every time you seek to interfere in the economy.

American allies in Asia, such as South Korea and Japan, or European allies such as the Netherlands, the home of the critical ASML maker, can be brought to a major alliance to deal with real security threats from anti -critical technologies through the coordination of export controls. However, this logical security basis is undermined every time the Trump administration makes an exception that puts national security behind making the deal in the short term.

“Export controls only work when you are multilateral. If national security concerns can be overcome by 15 percent, you have lost all your partners. This is destroyed by our control of multilateral exports like anything I can imagine.”