Shares in Nvidia (NVDA) took a tumble as the markets closed on Wednesday after new US tariffs were announced targeting select semiconductors. US President Donald Trump revealed the 25% tariff plan, which impacts Nvidia, AMD, and other advanced computing chips. The proclamation, which cited national security as a justification, is part of a broader effort to create incentives for chipmakers to produce more semiconductors in the U.S. and decrease reliance on chip manufacturers in places like Taiwan.
The move comes after the Trump White House faced criticism from Democratic and Republican officials after deciding to allow for the sale of Nvidia’s H200 semiconductors to China. Several officials on both sides felt would give Beijing a way to catch up to the US lead in AI, which has been a tight race over the past two years.
“The [Commerce] Secretary found that the United States’ capacity to manufacture semiconductors is too low to meet projected national defence needs and to match the requirements of a growing commercial industry,” the White House said, announcing the semiconductor policy tweak. “The United States currently fully manufactures only approximately 10 percent of the chips it requires, making it heavily reliant on foreign supply chains. This dependence on foreign supply chains is a significant economic and national security risk,” the proclamation added.
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The tariffs in the order apply to chips imported to the U.S. that aren’t used domestically for artificial intelligence purposes but are then exported to another country. The order instead applies to a “very narrow category of semiconductors that are an important element of my Administration’s AI and technology policies,” per Trump’s order. Furthermore, Trump may also impose broader tariffs on imports of semiconductors and their derivative products to incentivize domestic manufacturing in the near future, according to the White House fact sheet.
NVIDIA (NVDA) stock fell just over 1% on Wednesday, and another half a percent after trading hours. AMD shares also took a hit. Meanwhile, Intel (INTC) continues to gain ground in the chip stock race, rallying another 3% Wednesday, continuing its 153% rally since January 2025.