Nvidia (NVDA) Stock: Trump's 25% China Deal Faces Red Light at Chinese Customs

TLDR

Table of Contents

Trump administration authorized Nvidia H200 chip sales to China with a 25% government fee on revenue.
Chinese customs blocked H200 imports this week despite U.S. approval, creating market confusion.
China is developing regulations to cap foreign AI chip purchases from companies like Nvidia.
Commerce Department requires independent testing and caps China shipments at 50% of U.S. volumes.
U.S. lawmakers oppose the move, claiming it weakens America’s AI leadership position.

Nvidia got approval to sell H200 chips to China. But there’s a catch. Actually, several catches.

President Trump confirmed Tuesday the administration will allow H200 sales with one condition. The U.S. government takes 25% of the revenue. Trump first floated this idea a month ago.

NVIDIA Corporation, NVDA

The H200 represents a full-power chip, unlike previous China-specific models. It’s the same version sold domestically and in other markets. Nvidia didn’t slow it down for export purposes.

Trump pointed out the H200 isn’t even Nvidia’s top performer anymore. Blackwell and Rubin chips have already surpassed it. “It’s not the highest level, but it’s a pretty good level,” Trump said Wednesday.

Here’s where things get messy. Chinese customs told agents this week that H200 chips cannot enter the country, Reuters reported. This happened just days after the formal U.S. approval.

Commerce Department Sets Strict Rules

The Tuesday filing outlined specific requirements. Exporters must prove adequate H200 supply exists for U.S. customers first.

The chips can’t consume foundry capacity needed for more advanced chips heading to America. Buyers need robust security procedures in place.

Third-party testing in the U.S. must verify specifications before any shipment leaves. China orders are limited to 50% of total U.S. customer shipments.

The White House also slapped a 25% tariff on H200 imports. These chips must come back to the U.S. for testing before reaching China.

Nvidia praised the decision. The company said it allows American chip makers to compete globally while supporting domestic jobs. “Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance,” a spokesperson stated.

China Preparing Its Own Restrictions

Beijing isn’t sitting idle. China is drafting regulations to limit how many advanced AI chips domestic companies can buy from foreign suppliers, Nikkei Asia reported Thursday.

Two sources confirmed the central government is working on volume caps. This approach allows some purchases rather than complete bans.

The Chinese government called in tech companies this week. Sources told Reuters these firms were instructed to avoid purchasing the chips unless absolutely necessary.

CEO Jensen Huang told reporters last week that Chinese customer interest in H200 chips runs “very high.” Production has restarted. “We’ve fired up our supply chain, and H200s are flowing through the line,” Huang said at CES.

Huang isn’t waiting for official Chinese announcements. “It’s just going to be purchase orders,” he said.

The Chinese market could generate $50 billion annually for Nvidia, the company previously stated. Last year, Huang projected $500 billion in total AI chip sales through 2026’s end. Chinese H200 sales would come on top of that forecast.

U.S. lawmakers criticized the approval Wednesday. They argue it compromises America’s AI advantage and could strengthen Beijing’s military capabilities. Whether China actually permits imports remains uncertain as the country pushes domestic chip development.

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