Latest news with #AaronBartnick
Wall Street Journal
6 days ago
- Business
- Wall Street Journal
Is Trump's Plan to Take 15% of AI Chip Sales to China Legal?
The Constitution prohibits the federal government from imposing taxes or duties on items exported from the U.S. But many chips are manufactured overseas, so one option is for the Commerce Department's Bureau of Industry and Security to create new requirements for foreign-made items that need export licenses, industry experts said. Or U.S. officials could come up with a general purpose for the fee, such as helping U.S. leadership in science and technology. 'There isn't an existing mechanism to do this,' said Aaron Bartnick, who worked in the Office of Science and Technology Policy during the Biden administration.
Mint
12-08-2025
- Business
- Mint
What to know about Trump's plan to take 15% of AI chip sales to China
The decision by the Trump administration to charge Nvidia and Advanced Micro Devices a portion of the sales from their artificial-intelligence chips to China opens up several legal and national-security concerns. Here's what to know: The administration will have to come up with a new structure for export licenses being approved by the Commerce Department's Bureau of Industry and Security, part of its bid to reshape exports of chips critical for training artificial-intelligence models. They will need a creative approach because the Export Control Reform Act, which gives BIS authority to enact export controls, says no fee can be imposed in connection with license applications. And the Constitution prohibits the federal government from imposing taxes or duties on items exported from the U.S. But many chips are manufactured overseas, so one option is for BIS to create new requirements for foreign-made items that need export licenses, industry experts said. Or U.S. officials could come up with a general purpose for the fee, such as helping U.S. leadership in science and technology. 'There isn't an existing mechanism to do this," said Aaron Bartnick, who worked in the Office of Science and Technology Policy during the Biden administration. Neither side has released details of the agreements. People close to them say many of the details and the financial structure still need to be worked out. Bernstein analysts estimate that Chinese demand for Nvidia's H20 AI chip in 2025 before an April export ban was roughly 1.5 million chips, or more than $20 billion in sales. That means the administration could bring in billions of dollars from the new agreement, depending on Nvidia's export volumes. The administration could face opposition to the deal from national-security hawks who have worried that sending U.S. technology to China will boost the country's AI capabilities and military. Many have opposed the chip exports and worry that this type of activity as part of U.S.-China trade talks gives priority to business interests rather than security concerns as intended. 'Export controls exist to protect America, not to generate revenue," said Rep. Raja Krishnamoorthi, (D., Ill.), the top Democrat on the House Select Committee on China. With the agreement, the administration is signaling that security priorities can take a backset for the right price, some experts said. 'A 15% fee won't buy back the national security we lose selling AI chips to China," said Jimmy Goodrich, a senior adviser to the think tank Rand who focuses on tech issues. Trump defended the framework at a Monday news conference, saying that the H20 is obsolete and that he wants to let Nvidia Chief Executive Jensen Huang compete with Chinese technology companies. 'He's selling an old chip," Trump said. The agreements illustrate how AI chips have become strategic commodities and taken center stage in trade talks between the U.S. and China. The Trump administration has said it is comfortable exporting Nvidia's H20 because it isn't a top performing chip. The company specially designed it for the Chinese market to comply with export controls. Security hawks say it is still effective enough at certain tasks to boost China's AI industry. Write to Amrith Ramkumar at
The Hill
05-08-2025
- Business
- The Hill
Trump hones in on energy in trade talks, but specifics are scarce
President Trump is seeking to promote U.S. energy in his trade negotiations, but announcements about agreements so far have been light on details, and actual outcomes are largely mysterious. Recently, the Trump administration and the European Union announced a trade deal under which the EU will buy '$750 billion in U.S. energy' by 2028. An EU webpage said that the deal 'includes the intention to procure more US liquified natural gas (LNG), oil, and nuclear fuels and cutting-edge technologies and investments over the next three years.' On Wednesday, the administration announced another deal with South Korea that included the purchase of '$100 Billion Dollars of LNG, or other Energy products' Trump said on social media. The latest agreements come after one with Japan last month. That deal amounted to $550 billion in Japanese investments in U.S. industries, including energy infrastructure and production, semiconductors and mining. Reuters reported Monday that the administration also reached a trade deal with Malaysia that included an agreement under which state energy company Petroliam Nasional Berhad will buy $3.4 billion a year of U.S. LNG. While there appears to be a focus on energy in these deals, in many of them it's not clear exactly what kind of energy will be purchased in what quantities, who will supply it or who will buy it. 'There are a lot of still open questions,' said Aaron Bartnick, who served as an economic security official in the Biden White House. Clara Gillispie, a senior fellow for climate and energy at the Council on Foreign Relations, said, 'There's still a lot we don't know about what these deals look like, including in terms of how ambitious these actually are.' She said part of the issue is that it's not clear what even counts as 'energy.' 'You have in some of the detail deals references to energy products. Some say energy exports from the U.S. LNG is often referenced as part of a suggestive, but not necessarily all inclusive list.' Bartnick, who is now a fellow at Columbia University's Center on Global Energy Policy, said that the deals would be expected to result in the purchase of more U.S. energy 'if the terms as outlined, are executed.' But that's a big if. 'I'll be very interested to see how these foreign governments work with the private companies in their respective countries in order to coordinate these investments,' he said. On the U.S. side as well, decisions are made by private companies, rather than anything run by the state, and in many cases, if deals were economic, it's possible they would have already been made with or without a trade deal. However, Gillispie noted that 'there are things that governments can do to more positively influence the competitiveness of U.S. energy supplies in their own markets.' 'You could, for example, see governments look at waiving of certain import taxes or other fees that might be levied against energy imports, specific to waiving them in the U.S. case,' she said. Olympe Mattei-d'Ornano, a European gas analyst at BNEF, said in a statement shared with The Hill that the EU deal in particular may be difficult to actually achieve. 'Total energy imports from the US accounted for less than $80 billion last year vs $250 billion promised. The pledge is not legally binding but could spur a gesture from the EU's side to provide incentives/guidelines to increase EU buyers' contracts with US LNG projects,' said Mattei-d'Ornano. She indicated that at least some of the purchases may have happened anyway, 'given the pivot away from Russia in recent years.' However, the U.S. energy industry has appeared supportive of the Trump administration's efforts. 'We welcome President Trump's announcement of new trade frameworks that will expand new export market opportunities and support American energy development,' said Rob Jennings, vice president of natural gas markets at the American Petroleum Institute, a major oil and gas lobbying organization, in a statement to The Hill. Jennings, however, also called for a faster infrastructure buildout in the U.S., saying 'we can provide even more of that supply to our allies with more infrastructure.'
