China is the US' target, but Trump's chip policies miss the mark
its H20 chips to China. The chipmaker's shares jumped about 4 per cent on the news. Nvidia recently became the first public company to be worth US$4 trillion; one analyst sees its market capitalisation increasing to US$5 trillion. Advanced Micro Devices expects to ship to China soon, as well.
These are major wins in the torrent of constantly
changing tariffs , fraught negotiations and
shifting deadlines as Trump weaponises trade to prevent China from dominating AI technologies while pressuring allies to help contain Beijing's global ambitions. However, his approach misses the mark and endangers growth.
Trump is transactional, erratic, theatrical, contradictory and fiercely political. Economic considerations are swept aside unless the markets drop sharply and force his hand, as
they did in April after his 'Liberation Day' announcement. In a personal way, he sees China and others as nasty wrongdoers. He claims China has '
ripped us off for years ' and has been
stealing intellectual property , rhetoric that rallies his political base. At the same time, he has praised Chinese President Xi Jinping as 'a smart guy' and said 'we'll end up making a very good deal'.
Huang has to walk a tightrope between Beijing and Washington to avoid retribution in arguing that the US can only secure world tech leadership by setting the 'global standard'. He also needs to keep investors happy. In managing those conflicting interests, he says, 'we have to be in search of all the AI developers in the world'. That includes China, where he says half of them are. He dismisses concerns that
China's military will benefit , saying that 'they don't need Nvidia's chips, certainly, or American tech stacks in order to build their military'.
Huang knows that the first to lead in a particular technology is likely to retain dominance because of inertia, ecosystem lock-in and high switching costs that deter rivals from catching up. Early leaders benefit from established infrastructure, talent concentration and network effects, creating a self-reinforcing advantage that compounds over time. Hence, the urgency to have American AI planted everywhere.
Two other important markets for Huang, Malaysia and Thailand,
are under threat from the Trump administration for allegedly smuggling Nvidia chips into China to bypass trade bans. Huang previously said he saw '
no evidence ' of AI chip diversion. Malaysia is emerging as
an increasingly important hub in the global AI supply chain.
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