Utilizing trade taxes to compel foreign nations into economic investments within the U.S.
In a surprising turn of events, tech giants Nvidia and AMD have struck an unprecedented deal with the U.S. Government, as reported by journalist Tomás Delfim. This deal, discussed on the daily podcast "Economia dia a dia" from Expresso, involves securing export licenses for Nvidia's H20 and AMD's MI308 AI chips, allowing them to export these chips to China.
Under the terms of the agreement, the companies will pay 15% of their sales revenue from these exports to the U.S. Commerce Department. This marks a new model where the U.S. government financially participates in profits from strategic chip exports.
The deal represents a significant shift in semiconductor export policy, potentially reshaping international chip supply chains and trade dynamics. It is a reversal from earlier stringent export controls aimed at restricting China’s access to advanced semiconductor technology for national security reasons.
The globally interconnected semiconductor manufacturing ecosystem is under pressure as a result. Although Nvidia and AMD are U.S. firms, their chips are produced by Taiwan’s TSMC using equipment from suppliers in Europe and Asia. The export license deal creates new precedent pressures on these allied countries and intermediary trading hubs (such as Singapore and UAE) to monitor shipments closely to comply with U.S. policy while maintaining supply chain continuity.
The arrangement may prompt other semiconductor producers worldwide to attempt similar negotiations to access the lucrative Chinese market under controlled terms, potentially altering the competitive landscape and chip supply chain flows.
However, the deal raises legal and ethical questions about government overreach and crony capitalism. The Export Control Reform Act prohibits charging fees for export license applications, yet the revenue-sharing deal imposes a financial levy on Nvidia and AMD’s China sales. Such precedents could influence future U.S. trade policy and international business relations.
Industry voices have criticized other recent export controls as harmful to global competitiveness and innovation. This deal partially mitigates these concerns by reopening controlled exports under new terms.
The impact of this decision on global trade is yet to be determined. The podcast "Economia dia a dia", hosted by Juliana Simões, provides listeners with insightful discussions about such developments, making it a valuable resource for those interested in staying informed about global trade dynamics.
- The revenue-sharing deal between Nvidia, AMD, and the U.S. Commerce Department marks a departure from traditional business practices, as other semiconductor producers might now attempt similar negotiations to access lucrative markets under controlled terms.
- The U.S. government's financial participation in the profits from strategic chip exports, as seen in the deal with Nvidia and AMD, could influence future business deals and relations, raising ethical and legal questions about government intervention and manipulation of international trade.
