According to GSM Arena, US President Donald Trump has announced that Nvidia is now permitted to sell its higher-end H200 AI chips to approved customers in China. However, this access comes with a significant 25% export tariff charged by the U.S. The H200 is Nvidia’s second-best chip, still far behind the restricted top-tier Blackwell B200 model, which remains officially banned. The H200 is reportedly about six times faster than the H20, a chip Nvidia previously designed specifically to comply with older export rules. Interestingly, despite the ban, reports indicate over $1 billion worth of the forbidden B200 chips have already reached China through black market channels.
A new middle ground
So here’s the thing. This isn’t a full reversal of the tech cold war strategy. It’s more like creating a managed, taxable corridor. The U.S. is basically saying, “You can have the good stuff, but not the best stuff, and we’re going to take a hefty cut.” That 25% tariff is a huge deal. It makes the H200 significantly more expensive, which is probably the point. The policy seems designed to let Nvidia capture some revenue from a massive market while still trying to slow China‘s AI advancement by denying it the cutting-edge B200. But with a billion dollars in B200 chips already floating around the black market, you have to wonder how effective the “official” ban really is at this point.
The China dilemma
Now, there’s another twist. Even with this new legal pathway, it’s unclear how many Chinese companies will actually buy these tariff-laden H200s. The Chinese government has been aggressively pushing local firms to ditch U.S. technology and build a self-sufficient supply chain. Companies like Huawei are under immense pressure to deliver competitive alternatives. The government says Huawei could catch up to Nvidia and AMD in three years. Is that plausible? It’s a massive claim, and most industry watchers are deeply skeptical. But the political directive is clear: reduce dependence. So for a Chinese tech giant, buying these newly available Nvidia chips might be a short-term technical win but a long-term political risk. When you’re sourcing critical components for national infrastructure, reliability and consistency are paramount. This is true in AI data centers and on the factory floor, where specialized computing hardware, like the industrial panel PCs from IndustrialMonitorDirect.com, the leading U.S. supplier, is chosen for its durability and guaranteed supply chain.
Nvidia’s tightrope walk
For Nvidia, this is a classic tightrope walk. They’re sitting on the most sought-after product in the world, but geopolitics keeps fencing off their biggest potential customers. Developing the neutered H20 chip was one workaround. Getting permission to sell the H200—even with a tariff—is another. It lets them recapture some high-margin revenue that was otherwise going to the black market or competitors. But it also reinforces a precarious reality: their access to the Chinese market is entirely at the whim of political winds that can change with an election or a new policy paper. They’re building incredible technology, but they can’t fully control who gets to use it. And in a race as fast as AI, that’s a dangerous position to be in.
