Mint Quick Edit |Trump’s chip export levy: Statism’s gain is America’s loss

5 months ago 9

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US President Donald Trump's latest give-and-take arrangement has taken state interference in business to an all new level. (Economist)

Summary

A bizarre deal with AI chipmakers AMD and Nvidia on chips shipped to China reveals a White House in extractive mode, never mind what it does to business liberty or means for the US.

Donald Trump’s transactional approach is known all too well, but his latest give-and-take arrangement has taken state interference in business to an all new level. The US government has reportedly got Nvidia and AMD to agree to parting with 15% of their revenue from the sale of certain chips to China.

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These chips—Nvidia’s H20 AI accelerator and AMD’s MI308 chips—required an export licence under Trump’s policy of denying China access to high-end semiconductors, aimed at keeping the US ahead in the AI race.

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US-China talks reportedly got Washington to soften its stance in lieu of Beijing easing mineral export clamps. Today, the White House seems less bothered by Chinese AI players making good use of those chips. That chipmakers should end up paying a kind of tax for shipping these to China points to an extractive fiscal approach with few parallels in policymaking.

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This is unusual, to put it mildly, and the US judiciary ought to look into its legality. The worst part of it, though, is what it does to the idea of America being a free country with high ideals of liberty lacing everything from movies to markets. This move could damage the US in ways that are hard to foresee.

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