Even in a government that has repeatedly exceeded the legal limits on the use of economic measures to reshape the global business scenario, a new deal with two technology giants is lighting alerts among international trade experts.
Nvidia (BDR:) and AMD (). The chips in question – NVIDIA’s H20 Ai Accelerator and AMD’s M308 – had previously been banned by the Trump administration and require export licenses to be sold.
“Calling this unusual or unprecedented would be a shocking euphemism,” said Stephen Olson, former US commercial negotiation and now member of Iseas-Yusof Ishak Institute in Singapore. “What we are seeing is, in practice, the monetization of American trade policy, in which US companies need to pay the government to be allowed to export. If this is the case, we enter a new and dangerous world.”
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The revenue sharing agreement is the latest aggressive and legally questionable government intervention since Donald Trump returned to the White House in January. In addition to a chaotic tariff campaign and persistent criticism of the Federal Reserve President, Trump has been using his platform on the social Truth for everything, from asking the waiver of CEOs to commenting on corporate advertising campaigns.
The president’s transactional approach had already been seen when he approved the sale of United States Steel Corp. For Japanese Nippon Steel Corp., in a $ 14.1 billion business that included conditions such as adherence to national security rules and a Golden Share concession to the US government. Japan, South Korea and the European Union have promised to invest billions of dollars in the US in exchange for 15%limited rates, while companies such as Apple Inc. escaped tariffs by committing to invest hundreds of billions in the country.
According to Deborah Elms, head of trade policy at Hinrich Foundation in Singapore, agreements with Nvidia and AMD can lead the White House to aim at other sectors and products.
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“The sky is the limit,” she said. “You can imagine all kinds of specific combination per company or by country, saying, ‘No one else can sell, but if you pay us directly, then you can.”
Although Nvidia and AMD have accepted the terms, there are doubts about the legality of the arrangement, which resembles an export tax – something prohibited by the US Constitution.
The Trump government already faces a process related to the use of the International Emergency Economic Powers Law to impose what has called “reciprocal” tariffs on the world. On Friday, Trump warned of a “great depression” if the courts consider their tariffs illegal.
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The chips are at the center of the US and China dispute over the domain of future industries such as artificial intelligence and automation. The Biden government had restricted the sale of advanced chips to China, leading Nvidia to create the H20 to circumvent these barriers. In April, Trump authorities hardened the controls, prohibiting the sale without license.
Last month, however, the White House decided to allow Nvidia and AMD to resume sales of chip designed specifically for the Chinese market – less advanced models than the cutting -edge AI accelerators. Trade Secretary Howard Lutnick said the intention was to make Chinese developers “addicted” in American technology.
China, however, reacted badly, especially after the US required chips to be equipped with tracking technology to reinforce export controls. On Sunday, the Yuyuantantian account, linked to the CCTV state network and used to signal Beijing’s positioning, publicly criticized the alleged safety failures and the inefficiency of the H20.
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Still, Chinese companies can resort to H20, as local production is not enough to meet demand – which can benefit Nvidia and AMD and now generate extra revenue for the US government.
Trump has not yet extended the 90 -day commercial truce between US and China, which expires on August 12. Lutnick said last week that the ceasefire “probably” will be kept while the world’s biggest economies are negotiating, with the possibility of a meeting between Trump and Xi Jinping later this year.
“It is clear that there is a change in government to adopt a milder national security stance while negotiations advance,” said Drew Delong, leader of practice in geopolitical dynamics at Kearney consultancy.
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Although the US has been intervening earlier – including taking part in private companies after the 2008 crisis – an agreement similar to NVIDIA and AMD is difficult to remember and without proper supervision, it can lead to a state of Country Capitalism, ”warned Scott Kennedy of Center for Strategic and International Studies in Washington.
“This represents a huge change in the way the American economy should work,” said Kennedy. “It will not please anyone except perhaps the Chinese, who will receive their chips and watch the US political system squirm in the midst of internal tensions.”
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