The White House has reached a preliminary revenue-sharing arrangement with Nvidia and AMD, requiring them to hand over 15 percent of their China AI chip sales in exchange for export licenses. However, officials concede that the deal’s legality and operational framework are still unsettled. Critics point to two major legal barriers: the U.S. Constitution’s Export Clause, which forbids taxes or duties on exports, and the Export Controls Reform Act of 2018, which explicitly bans fees for export licenses.
A Supreme Court ruling in 1998 struck down a similar export-related fee, reinforcing the potential vulnerability of the proposal. While the State Department does collect fixed fees from arms manufacturers under a separate law, the White House plan ties payments directly to export value, making it unprecedented and likely more controversial.
Supporters, including Trump, frame it as a way to raise government revenue while still allowing U.S. companies to sell advanced chips to China. Opponents warn it could be challenged in court by shareholders, state attorneys general, or other stakeholders, and that it sets a dangerous precedent for executive authority in trade policy. The Department of Commerce is still determining how to implement the arrangement, and officials have hinted it could be extended to other companies beyond Nvidia and AMD.