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August 17.2025

2 Minutes Read

Trump's Deal with Nvidia and AMD: Unpacking Export Tax Challenges

Futuristic scene of tech trade negotiation, Nvidia and AMD theme.

Understanding Trump’s Unconventional Deal with Chip Makers

On August 11, President Donald Trump revealed his controversial negotiation with leading chip manufacturers Nvidia and AMD, aiming to allow them to sell their H20 AI chips to China. This deal, which started with a demand for a 20% cut of sales but settled at 15%, raises eyebrows not just for its nature, but also for its potential implications on U.S. constitutional laws regarding exports.

What Does the “Export Clause” Mean?

The U.S. Constitution contains an “export clause” which prohibits taxes on exports. This legal framework has been tested in past Supreme Court cases where attempts to impose export duties were struck down. Experts, such as law professors Erik Jensen and Eric Talley, have voiced concerns over whether Trump’s deal could be seen as an unconstitutional measure and a deviation from historical government practices.

The Impact on National Security

Despite Trump's assurances that this deal poses no national security threat, skepticism remains. The discussions between China's Cyberspace Administration and Nvidia over security concerns hint at deeper issues. The allowance of selling potentially outdated technology to China may raise questions about the U.S.'s stance on tech security and its long-term implications.

Was This Deal a One-Time Arrangement?

Treasury Secretary Scott Bessent’s remarks suggest that this unique arrangement could become a template for future deals across various industries. By referring to it as a “beta test,” Bessent raises anticipation about what other sectors may follow suit, potentially altering the landscape of business negotiations in the tech industry.

Broader Industry Ramifications

The uncertain legal and political backdrop of this deal serves as a wake-up call for professionals in the tech industry. As companies navigate complex regulations, understanding the nuances of such government engagements will be crucial for long-term strategy. The implications could also reverberate through Silicon Valley startups and the overall Bay Area economy.

For businesses, awareness and agility will be key in adapting to these rapidly changing dynamics. Are we entering a new phase of government-business interaction, and what might that mean for the future?

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Trump's Deal with Nvidia and AMD: Unpacking Export Tax Challenges

Understanding Trump’s Unconventional Deal with Chip Makers

What Does the “Export Clause” Mean?

The Impact on National Security

Was This Deal a One-Time Arrangement?

Broader Industry Ramifications

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