When it comes to trade, Trump makes rules, then waits for business and nations to beg for an exception to be made in their case. Two American high-tech companies, Nvidia and AMD, have just agreed to pay the federal government 15% of their revenues on certain chip sales to China. The companies will be “sharing” revenues from their H20 and MI308 chips, in order to get export licenses to sell these otherwise export-prohibited products.
According to the Constitution, exports from the United States cannot be taxed. Article I, Section 9, Clause 5 reads: “No Tax or Duty shall be laid on Articles exported from any State.”
In this case, the Trump administration seems to be arguing that it’s not exactly a tax, but rather a voluntary agreement in order to get the license.
Nvidia and AMD are both headed by Taiwanese-Americans.
The agreement by the two chip makers comes just days after Apple’s Tim Cook came to the White House to grovel for tariff exemptions on its imported products. Although Trump is imposing a 100% tariff on chips and semiconductor imports into the U.S. “But, if you’ve made a commitment to build, or if you’re in the process of building, there is no tariff,” said Trump. On the basis of Cook’s claims that his company will invest at least $100 billion in U.S. manufacturing, Apple will get an exemption on the import tariffs.
The real path to building up American productivity is not just to move production, it is to increase it! An infrastructure renaissance—high speed rail, nuclear power plant, water treatment, and more—will make demands on industry and supply that can drive national production.
