The White House's attempts to secure revenue-sharing deals with two semiconductor companies, Nvidia and AMD, have not generated any income nearly a year later. Experts suggest legal challenges or strategic decisions may be the cause, rather than explicit constitutional prohibitions.
The White House's inability to secure revenue from its proposed revenue-sharing deals with major chip companies highlights the complexities and potential legal hurdles in its strategy to exert control and generate income from strategic industries, potentially impacting future industrial policy and investment.
The White House's initiative to generate revenue from semiconductor giants Nvidia and AMD through revenue-sharing agreements has yielded no financial returns nearly a year after its inception. Experts suggest that potential legal challenges, stemming from constitutional prohibitions against taxing exports, or strategic decisions by the administration may be contributing to the delay. A trade lawyer indicated that the lack of a 15% charge might reflect a strategic judgment that other revenue-generating tools are more effective.
In February, the Trump administration implemented a different strategy by imposing a 25% tariff on specific high-end semiconductors manufactured in Taiwan by U.S. firms like Nvidia and AMD, which are then brought to the U.S. for testing before sale to Chinese companies. As of early May, AMD remained uncertain about whether these chips would be permitted entry into China, and Chinese companies had not placed orders for Nvidia products containing the approved chips subject to the same tariff. The Commerce Department, Nvidia, and AMD did not respond to requests for comment.
These efforts are part of a broader push by the president and Commerce Secretary Howard Lutnick to assert control over American manufacturing, a departure from traditional Republican policies. While the U.S. has historically taken ownership stakes in companies during crises, such as railroads during the Civil War or automakers during the 2008 recession, the current administration has expanded this approach to private companies and strategic industries, citing national security and profit motives. This strategy aims to attract private investment for critical manufacturing while also seeking direct financial returns.