Trump’s deal with Nvidia offers path forward in global trade war
U.S. President Donald Trump’s controversial plan to take a cut of revenue from chip sales to China has U.S. companies reconsidering their plans for business with the country, offering a model for circumventing years of trade tensions.
Experts and people familiar with the matter said the surprise deal, in which Nvidia and Advanced Micro Devices agreed to pay 15% of their revenues from Chinese artificial intelligence chip sales to the U.S., provides a path to enter the Chinese market despite severe export controls, tariffs and other trade barriers.
The question that companies must now confront is whether the risk is worth taking. People familiar with the matter, who asked not to be identified discussing private deliberations, said companies are struggling to figure out what the president’s order means for their future, especially given the unpredictable nature of Trump’s decision-making.
"This is truly bizarre and unusual, and the troubling thing — beyond the individual instances of AMD and Nvidia — is the possibility that this will be expanded,” said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics. "Everything is now ‘national security,’ according to the new definition, which means it’s all subject to export licenses and then they give you a license based on your contribution.”