The Trump administration has agreed to a unique deal with chip makers Nvidia and AMD, allowing them to sell their H20 chips to China in exchange for a 15% cut of revenue. This move marks a departure from the US Constitution’s prohibition on export taxes, which could have implications for national security, trade policy, and corporate profits.
The arrangement, which lifted an export ban on Nvidia’s H20 AI chips and AMD’s MI308, was described as “unusual” and still theoretical by legal experts. The deal was struck after heated negotiations with the US Department of Commerce, which has never claimed a percentage of corporate revenue from export sales before.
While officials claim there are no national security concerns, some critics argue that the arrangement is unprecedented and could set a precedent for similar deals in other industries. Julia Powles, director of UCLA’s Institute for Technology, Law & Policy, warned that if replicated, this template could pressure other firms into similar arrangements with the government.
The move comes as part of a broader trend of businesses negotiating unique deals with the Trump administration, including a “golden share” in U.S. Steel and discussions of buying a stake in chipmaker Intel. However, experts stress that such arrangements are rare and often subject to global trade rules and later modifications.
Legal scholars have questioned whether the eventual deal would constitute an unconstitutional export tax, citing the US Constitution’s prohibition on duties on exports. Erik Jensen, a law professor at Case Western Reserve University, said: “I don’t see what else it could be characterized as.” He added that such arrangements are often seen in other countries, but rarely imposed across all exporters.
The arrangement has sparked debate about the role of government in business and trade policy, with some arguing that it is a creative solution to balance national security concerns with corporate profits. Others have compared the deal to “protection rackets,” where businesses must pay a cut of their revenues to access markets or avoid harm.
As the US continues to grapple with its stance on export taxes, one thing remains clear: this unique arrangement has set a new precedent for trade policy and corporate negotiations, raising questions about the limits of government intervention in business.
Source: https://fortune.com/2025/08/16/is-trump-deal-amd-nvidia-china-chips-constitutional