US government will use 15% sales tax on NVIDIA and AMD AI GPUs to China to pay down debt

The US government will be charging NVIDIA and AMD a 15% sales tax on AI chips sent to China, with reports suggesting they'll use that 15% sales tax to pay down US debt.

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During a recent interview with US Treasury Secretary Scott Bessent, he was asked about where the agreement with NVIDIA came from. Bessent discussed that Trump came up with the deal, adding that "the President is one of the most open-minded people I know. He does everything at first principles. Why did we do things this way? Why shouldn't we do it the other way?"

Bessent believes that the new deal would be beneficial to NVIDIA and other chip makers, providing them with a path to "expand into China that can make NVIDIA chips the bellwether for Chinese technology and then the US taxpayer gets a share of that". He also remained open to the agreement being applied outside of the technology industry, but reiterated that right now in its current form, it is unique to NVIDIA and AMD.

The Treasury Secretary was asked if the US government was compromising national security concerns, or putting a "price" on them, to which he said that there are no security concerns as the NVIDIA H20 AI GPUs aren't the bleeding-edge AI semiconductors. Bessent said: "there are no national security concerns here. We would not sell any of the advanced chips. So the H20s, I don't know whether you'd say they are four, five, six levels down the chip stack". He added: "What we do not want here... is more Huawei to have a digital Belt and Road. So we do not want the standard to become Chinese across the world or even in China".

It was just a couple of hours ago that reports hit that the Trump administration is looking at taking a stake in Intel in order to improve US domestic semiconductor manufacturing, mixed with a 15% sales tax on NVIDIA and AMD AI chips sold in China. The Trump administration is moving fast with some industry-wide changes, that's for sure.

The US Treasury Secretary continued, where after NVIDIA received its H20 export licenses, multiple reports surfaced that the Chinese government was worried about backdoors and tracking systems in products sent to China, and has been advising Chinese companies to not rely on NVIDIA products. Bessent takes the concern as a sign that China worried "about the NVIDIA chips becoming the standard in China".

He said that he agrees with the assessment that the Chinese are stealing US technology, with Bessent adding: "Look, NVIDIA's an incredible product. A lot of the technology is in China, you know, they're piggybacking, and I would use piggybacking as kind of a word for acquiring our technology".