Trump says Nvidia to give US cut of China chip sales
He said that to lift the restrictions, he had agreed to a 15-percent cut from Nvidia: "If I'm going to do that, I want you to pay us as a country something, because I'm giving you a release. I released them only from the H20."
The California-based company produces some of the world's most advanced semiconductors but cannot ship its most cutting-edge chips to China due to concerns that Beijing could use them to enhance military capabilities.
Nvidia developed the H20 -- a less powerful version of its AI processing units -- specifically for export to China.
That plan stalled when the Trump administration tightened export licensing requirements in April.
Nvidia CEO Jensen Huang met with Trump at the White House last week and agreed to give the federal government the cut from its revenues, a highly unusual arrangement in the international tech trade, according to reports in the Financial Times, Bloomberg and New York Times.
"While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," a Nvidia spokesperson told AFP.
The company spokesperson added: "America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race."
Investors are betting that AI will transform the global economy, and last month Nvidia -- the world's most valuable company and a leading designer of high-end AI chips -- became the first company ever to hit $4 trillion in market value.
The firm has, however, become entangled in trade tensions between China and the United States, which are waging a heated battle for dominance to produce the chips that power AI.
'Political tariff'
The United States has been restricting which chips Nvidia can export to China on national security grounds.
After Huang's meeting with Trump, the Commerce Department on Friday started granting the licenses for chip sales, according to media reports.
Silicon Valley-based AMD will also pay 15 percent of revenue on Chinese sales of its MI308 chips, which it was previously barred from exporting to the country.
AMD did not respond to requests for comment.
The move comes as the Trump administration has been imposing stiff tariffs, with goals varying from addressing US trade imbalances, wanting to reshore manufacturing, and pressuring foreign governments to change policies.
A 100 percent tariff on many semiconductor imports came into effect last week, with exceptions for tech companies that announce major investments in the United States.
"It's a political tariff in everything but name, brokered in the shadow of heightened US-China tech tensions," Stephen Innes of SPI Asset Management said.
© 2025 AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Fashion Network
4 hours ago
- Fashion Network
Modi's trade dilemma: protect textiles or cotton
With two weeks to avoid US President Donald Trump 's punitive 50% tariffs, Prime Minister Narendra Modi has drawn a red line. India, he says, 'will never compromise on the interests of its farmers, livestock producers, and fisherfolk.' That commitment is partly dictated by realpolitik. Nearly half of India's workforce relies on agriculture, a degree of dependence that has increased since the pandemic. It is very hard for a leader to make any concession that appears to let down the very people who have, starting in the 1960s, made the world's most-populous nation self-sufficient in food and dairy — in the face of tremendous constraints. But paeans to the farmer do nothing to alter the harsh economic reality. Even if New Delhi says that a trade war with the US is the price it would pay for shielding growers from a deluge of American corn, soy, and cotton, it isn't clear that local farmers will be grateful for the protection. For the most vulnerable among them won't benefit from it. Already, international apparel buyers are canceling or suspending orders, thanks to Trump's 50% tariff threat. How would India deliver decent returns to farmers on their cotton crop if demand swoons in its biggest overseas market for shirts, trousers and T-shirts? Modi wants his fellow citizens to buy things made with the 'sweat of our people.' But with a belligerent Washington threatening to upend a vast swathe of local factory jobs, there will be less money at home to buy domestically produced goods. Tamil Nadu's garment-exports hub in southern India alone is responsible for 1.25 million paychecks. Losing access to the US consumer may hurt India's farm economy more than slashing its 39% average tariff on imported produce. In fact, Pakistan may have played Trump better. It has a significant cotton-growing population as well. But last year it became the world's largest buyer of US cotton, which it imports duty-free. It might take in more now to appease the White House. India's textile industry, too, has asked the government to let go of the 11% duty on short-staple fiber if it helps sell more of locally manufactured garments at Walmart and Target. After all, this tariff isn't really helping the farmer. Domestic cotton production is languishing at a 15-year low even though 44% of the output hitting the market is being scooped up by a state agency at government-assured minimum prices. The crop in neighboring Pakistan has fared even worse. But at least with a competitive 19% tariff, the apparel industry there can hope to expand its market share in the US. Indian exporters, meanwhile, are staring at a much higher tax — after paying nearly 13% more for the main raw material than the prevailing international price. Cotton is just one example. Domestic prices of most agricultural produce are higher than internationally. While lavish farm subsidies in rich nations make their surpluses globally competitive, New Delhi's elaborate apparatus of state intervention largely channels the difference between local and international prices toward middlemen. Crop yields are abysmal, and climate change is making farm incomes increasingly erratic even behind high trade barriers. The poultry industry is struggling with feed costs, yet tariffs of 45%-56.5% make US soy meal too expensive. If India allows its farmers to grow genetically modified food, they may be able to hold their own against American corn and soybean. At $32 billion, agricultural imports are low for a country of 1.4 billion people; and even this figure is padded by palm oil brought in from Indonesia and Malaysia. The US accounts for less than $2 billion of the total. Why not switch sourcing to US soybean oil and make it duty-free to give Trump a win? More broadly, why not exploit Trump's tariff shock to rewire unproductive agriculture and lift stagnant manufacturing? India has 126 million people answering to the description of farmers even though their landholding is less than five acres.(1) As a 2023 survey of marginal producers showed, their 60,000 rupees ($700) average annual income from selling crops is often less than what they earn from a second occupation as daily-wage labor. They're stuck on the land because of food security — and because the urban economy has nothing for them. Just about one in 10 families has someone in a salaried job, and only a third of these farmers take advantage of state procurement at pre-announced prices. Others sell to private traders. The most popular government support program for this group is straight-up cash in bank accounts; it would stop if they were no longer holding on to the land. Yet the taxpayer is picking up the bills for keeping the land cultivated when imports would be cheaper; and for shielding urban workers from the high costs of locally grown produce. Lest expensive food crush the country's dream of industrialisation, the government gives free rice and wheat to 800 million people so that their employers don't have to pay them high wages. Throw everything into the mix, and the annual cost was in excess of $100 billion during the pandemic. If the tariff-related disruption turns out to be worse than Covid-19, as some exporters fear, then the fiscal drag might only become heavier. Four years ago, Modi was forced to withdraw legislation whose basic premise was to give farmers more freedom to discover free-market prices. If that was a poorly designed makeover, striking a defiant note against a mercurial US president in the name of agricultural interests is also ill-conceived. But with the prime minister's political opponents stepping up their campaign against his 11-year-old rule, it's irrational to expect meaningful reforms. Politics will triumph over economics.
Fashion Network
4 hours ago
- Fashion Network
Modi's trade dilemma: protect textiles or cotton
With two weeks to avoid US President Donald Trump 's punitive 50% tariffs, Prime Minister Narendra Modi has drawn a red line. India, he says, 'will never compromise on the interests of its farmers, livestock producers, and fisherfolk.' That commitment is partly dictated by realpolitik. Nearly half of India's workforce relies on agriculture, a degree of dependence that has increased since the pandemic. It is very hard for a leader to make any concession that appears to let down the very people who have, starting in the 1960s, made the world's most-populous nation self-sufficient in food and dairy — in the face of tremendous constraints. But paeans to the farmer do nothing to alter the harsh economic reality. Even if New Delhi says that a trade war with the US is the price it would pay for shielding growers from a deluge of American corn, soy, and cotton, it isn't clear that local farmers will be grateful for the protection. For the most vulnerable among them won't benefit from it. Already, international apparel buyers are canceling or suspending orders, thanks to Trump's 50% tariff threat. How would India deliver decent returns to farmers on their cotton crop if demand swoons in its biggest overseas market for shirts, trousers and T-shirts? Modi wants his fellow citizens to buy things made with the 'sweat of our people.' But with a belligerent Washington threatening to upend a vast swathe of local factory jobs, there will be less money at home to buy domestically produced goods. Tamil Nadu's garment-exports hub in southern India alone is responsible for 1.25 million paychecks. Losing access to the US consumer may hurt India's farm economy more than slashing its 39% average tariff on imported produce. In fact, Pakistan may have played Trump better. It has a significant cotton-growing population as well. But last year it became the world's largest buyer of US cotton, which it imports duty-free. It might take in more now to appease the White House. India's textile industry, too, has asked the government to let go of the 11% duty on short-staple fiber if it helps sell more of locally manufactured garments at Walmart and Target. After all, this tariff isn't really helping the farmer. Domestic cotton production is languishing at a 15-year low even though 44% of the output hitting the market is being scooped up by a state agency at government-assured minimum prices. The crop in neighboring Pakistan has fared even worse. But at least with a competitive 19% tariff, the apparel industry there can hope to expand its market share in the US. Indian exporters, meanwhile, are staring at a much higher tax — after paying nearly 13% more for the main raw material than the prevailing international price. Cotton is just one example. Domestic prices of most agricultural produce are higher than internationally. While lavish farm subsidies in rich nations make their surpluses globally competitive, New Delhi's elaborate apparatus of state intervention largely channels the difference between local and international prices toward middlemen. Crop yields are abysmal, and climate change is making farm incomes increasingly erratic even behind high trade barriers. The poultry industry is struggling with feed costs, yet tariffs of 45%-56.5% make US soy meal too expensive. If India allows its farmers to grow genetically modified food, they may be able to hold their own against American corn and soybean. At $32 billion, agricultural imports are low for a country of 1.4 billion people; and even this figure is padded by palm oil brought in from Indonesia and Malaysia. The US accounts for less than $2 billion of the total. Why not switch sourcing to US soybean oil and make it duty-free to give Trump a win? More broadly, why not exploit Trump's tariff shock to rewire unproductive agriculture and lift stagnant manufacturing? India has 126 million people answering to the description of farmers even though their landholding is less than five acres.(1) As a 2023 survey of marginal producers showed, their 60,000 rupees ($700) average annual income from selling crops is often less than what they earn from a second occupation as daily-wage labor. They're stuck on the land because of food security — and because the urban economy has nothing for them. Just about one in 10 families has someone in a salaried job, and only a third of these farmers take advantage of state procurement at pre-announced prices. Others sell to private traders. The most popular government support program for this group is straight-up cash in bank accounts; it would stop if they were no longer holding on to the land. Yet the taxpayer is picking up the bills for keeping the land cultivated when imports would be cheaper; and for shielding urban workers from the high costs of locally grown produce. Lest expensive food crush the country's dream of industrialisation, the government gives free rice and wheat to 800 million people so that their employers don't have to pay them high wages. Throw everything into the mix, and the annual cost was in excess of $100 billion during the pandemic. If the tariff-related disruption turns out to be worse than Covid-19, as some exporters fear, then the fiscal drag might only become heavier. Four years ago, Modi was forced to withdraw legislation whose basic premise was to give farmers more freedom to discover free-market prices. If that was a poorly designed makeover, striking a defiant note against a mercurial US president in the name of agricultural interests is also ill-conceived. But with the prime minister's political opponents stepping up their campaign against his 11-year-old rule, it's irrational to expect meaningful reforms. Politics will triumph over economics.
Euronews
5 hours ago
- Euronews
'Tiger economy': Vietnam's 2045 get rich quick plan
Beneath red banners and a gold bust of revolutionary leader Ho Chi Minh in Hanoi's central party school, Communist Party chief To Lam declared the arrival of 'a new era of development' late last year. The speech was more than symbolic—it signalled the launch of what could be Vietnam's most ambitious economic overhaul in decades. Vietnam aims to get rich by 2045 and become Asia's next 'tiger economy'—a term used to describe the earlier ascent of countries like South Korea and Taiwan. The challenge ahead is steep: Reconciling growth with overdue reforms, an ageing population, climate risks and outdated institutions. There's added pressure from President Donald Trump over Vietnam's trade surplus with the US, a reflection of its astounding economic trajectory. In 1990, the average Vietnamese could afford about $1,200 (€1,025) worth of goods and services a year, adjusted for local prices. Today, that figure has risen by more than 13 times to $16,385 (€13,995). Vietnam's transformation into a global manufacturing hub with shiny new highways, high-rise skylines and a booming middle class has lifted millions of its people from poverty, similar to China. But its low-cost, export-led boom is slowing and it faces a growing obstacle to its proposed reforms—expanding private industries, strengthening social protections and investing in technology and green energy—from climate change. 'It's all hands on deck. . . . We can't waste time anymore," said Mimi Vu of the consultancy Raise Partners. The export boom can't carry Vietnam forever Investment has soared, driven partly by US-China trade tensions, and the US is now Vietnam's biggest export market. Once-quiet suburbs have been replaced with industrial parks where trucks rumble through sprawling logistics hubs that serve global brands. Vietnam ran a $123.5 billion (€105bn) trade surplus with the US trade in 2024, angering Trump, who threatened a 46% US import tax on Vietnamese goods. The two sides appear to have settled on a 20% levy, and twice that for goods suspected of being transshipped, or routed through Vietnam to avoid US trade restrictions. During negotiations with the Trump administration, Vietnam's focus was on its tariffs compared to those of its neighbours and competitors, said Daniel Kritenbrink, a former US ambassador to Vietnam. 'As long as they're in the same zone, in the same ballpark, I think Vietnam can live with that outcome," he said. But he added that questions remain over how much Chinese content in those exports might be too much and how such goods will be taxed. Vietnam was preparing to shift its economic policies even before Trump's tariffs threatened its model of churning out low-cost exports for the world, aware of what economists call the 'middle-income trap,' when economies tend to plateau without major reforms. To move beyond that, South Korea bet on electronics, Taiwan on semiconductors, and Singapore on finance, said Richard McClellan, founder of the consultancy RMAC Advisory. But Vietnam's economy today is more diverse and complex than those countries were at the time and it can't rely on just one winning sector to drive long-term growth and stay competitive as wages rise and cheap labour is no longer its main advantage. It needs to make 'multiple big bets,' McClellan said. Vietnam's game plan Following China's lead, Vietnam is counting on high-tech sectors like computer chips, artificial intelligence and renewable energy, providing strategic tax breaks and research support in cities like Hanoi, Ho Chi Minh City, and Danang. It's also investing heavily in infrastructure, including civilian nuclear plants and a $67 billion (€57bn) North–South high-speed railway, that will cut travel time from Hanoi to Ho Chi Minh City to eight hours. Vietnam also aspires to become a global financial center. The government plans two special financial centres in bustling Ho Chi Minh City and in the seaside resort city of Danang, with simplified rules to attract foreign investors, tax breaks, support for financial tech startups, and easier ways to settle business disputes. Underpinning all of this is institutional reform. Ministries are being merged, low-level bureaucracies have been eliminated and Vietnam's 63 provinces will be consolidated into 34 to build regional centres with deeper talent pools. Private business to take the lead Vietnam is counting on private businesses to lead its new economic push—a seismic shift from the past. In May, the Communist Party passed Resolution 68. It calls private businesses the 'most important force' in the economy, pledging to break away from domination by state-owned and foreign companies. So far, large multinationals have powered Vietnam's exports, using imported materials and parts and low cost local labour. Local companies are stuck at the low-end of supply chains, struggling to access loans and markets that favoured the 700-odd state-owned giants, from colonial-era beer factories with arched windows to unfashionable state-run shops that few customers bother to enter. 'The private sector remains heavily constrained," said Nguyen Khac Giang of Singapore's ISEAS–Yusof Ishak Institute. Again emulating China, Vietnam wants 'national champions' to drive innovation and compete globally, not by picking winners, but by letting markets decide. The policy includes easier loans for companies investing in new technology, priority in government contracts for those meeting innovation goals, and help for firms looking to expand overseas. Even mega-projects like the North-South High-Speed Rail, once reserved for state-run giants, are now open to private bidding. By 2030, Vietnam hopes to elevate at least 20 private firms to a global scale. But Giang warned that there will be pushback from conservatives in the Communist Party and from those who benefit from state-owned firms. A Closing Window from climate change Even as political resistance threatens to stall reforms, climate threats require urgent action. After losing a major investor over flood risks, Bruno Jaspaert knew something had to change. His firm, DEEP C Industrial Zones, houses more than 150 factories across northern Vietnam. So it hired a consultancy to redesign flood resilience plans. Climate risk is becoming its own kind of market regulation, forcing businesses to plan better, build smarter, and adapt faster. 'If the whole world will decide it's a can go very fast,' said Jaspaert. When Typhoon Yagi hit last year, causing $1.6 billion (€1.4bn) in damage, knocking 0.15% off Vietnam's GDP and battering factories that produce nearly half the country's economic output, roads in DEEP C industrial parks stayed dry. Climate risks are no longer theoretical: If Vietnam doesn't take strong action to adapt to and reduce climate change, the country could lose 12–14.5% of its GDP each year by 2050, and up to one million people could fall into extreme poverty by 2030, according to the World Bank. Meanwhile, Vietnam is growing old before it gets rich. The country's 'golden population' window—when working-age people outnumber dependents—will close by 2039 and the labour force is projected to peak just three years later. That could shrink productivity and strain social services, especially since families—and women in particular—are the default caregivers, said Teerawichitchainan Bussarawan of the Centre for Family and Population Research at the National University of Singapore. Vietnam is racing to pre-empt the fallout by expanding access to preventive healthcare so older adults remain healthier and more independent. Gradually raising the retirement age and drawing more women into the formal workforce would help offset labour gaps and promote "healthy ageing,' Bussarawan said.
