On January 14, 2026, the U.S. government announced a 25 % tariff on select AI chips, including Nvidia’s H200, exported to China. The tariff applies to chips manufactured outside the United States—specifically in Taiwan—that are routed through U.S. facilities for third‑party testing before shipment.
The regulation targets high‑end chips built on advanced nodes. While the rule does not specify exact process nodes, it covers the H200, which is fabricated on the Hopper architecture and incorporates 141 GB of HBM3e memory. The rule requires that any such chip be subject to the duty regardless of the manufacturing node, as long as it is routed through U.S. testing facilities.
Nvidia’s exposure to the tariff is significant because China accounts for roughly 5 % of its FY2026 revenue, or $2.8 B, after a sharp decline from prior periods. The 25 % duty will raise the landed cost for Chinese buyers, potentially dampening demand for the H200 and reducing Nvidia’s projected revenue from that market. The company had previously secured a special arrangement that allowed H200 shipments to China, but the new duty adds a cost layer that could delay or shrink orders.
Nvidia’s CFO, Colette Kress, has publicly acknowledged the tariff’s impact, noting that the company appreciates the Trump administration’s decision to allow controlled sales while maintaining national‑security safeguards. Nvidia has also lobbied the U.S. government to prevent a loss of market share to competitors, arguing that overly restrictive controls would hand the advantage to domestic Chinese chip makers.
The tariff is part of a broader U.S.–China trade conflict that has escalated since 2018, driven by national‑security concerns and a desire to reduce reliance on foreign supply chains. China’s own initiatives to develop domestic AI chips add competitive pressure. While the tariff introduces a short‑term regulatory headwind, Nvidia’s robust data‑center segment, high gross margins, and strong order backlog provide resilience, suggesting that the company can absorb the cost increase while continuing to grow its global AI platform.
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