The government isn’t even receiving its desired share of the sales revenue.
Dan Foster writes about how the president’s possibly extortionate “deal” with Nvidia has allowed ostensibly commercial Chinese firms to acquire the company’s advanced AI chips. Spoiler alert: These ghost firms are almost certainly fronts for the Chinese military and its contractors.
Trump’s agreement, which I fully lambasted last year, allows Nvidia to sell its H200 semiconductor to companies in China — circumventing U.S. export controls also imposed by the Trump administration — in exchange for the federal government’s receiving 15 percent of the sales revenue. Sounds like a horrible deal to me, but at least we’re getting something out of it, right?
Except maybe we aren’t. While the formal regulations needed to green-light Nvidia’s exports have been finalized, no regulation implementing the revenue-sharing agreement has been codified — probably because it’s so unheard of that no one knows how to write such a rule that could withstand scrutiny. So the government has not been receiving 15 percent of Nvidia’s China sales after all.
Instead, the administration has imposed a 25 percent tariff on advanced AI chips, and mandated that Nvidia’s H200 chips be routed from Taiwan to the United States to pay the duty before going to China. Whether this tariff revenue equates to 15 percent of eventual sales is unclear.
Here’s what we do know: A “policy” that needs to jump through such ridiculous hoops to be implemented is one that mocks itself.