Trump Administration Takes Several Trade Actions Targeting Advanced AI Semiconductors While Deferring Broader Tariff Actions on the Semiconductor Industry

Below we discuss the BIS final rule, the Section 232 action, and potential next steps for both AI export controls and import restrictions on semiconductors.

BIS Final Rule

On December 8, President Trump announced that the Administration would allow sales of NVIDIA H200 and AMD MI325X GPUs and ICs to China in exchange for a 25% fee for the U.S. government (“December 8 Announcement”). On January 15, 2026, BIS issued a final rule implementing this policy. The rule revised the export licensing review policy for certain advanced computing items exported to end users in China, including Macau, shifting from a presumption of denial to a case-by-case review. This case-by-case standard applies to devices with performance at or below NVIDIA H200 and AMD MI325X GPUs. Specifically, the policy covers commodities with a total processing performance below 21,000, as defined in Technical Note 2 to ECCNs 3A090.a and 3A090.b, and a total DRAM bandwidth below 6,500 gigabytes per second, meaning the aggregate memory bandwidth between the integrated circuit and dynamic random access memory (DRAM).

The revised licensing policy applies only to exports from the United States. Applications for reexports or in-country transfers remain subject to a presumption of denial. As a result, items fabricated outside the United States would need to be imported into the United States before they could be exported pursuant to an export license.

To qualify for the case-by-case review policy, the items must be commercially available in the United States and supported by extensive exporter certifications and documentation. Exporters must certify and provide supporting information addressing the following:

• Performance Criteria: Confirmation that the items operate below the performance criteria provided in the rule and information on the number of units of the AI devices that have been shipped to U.S. commercial customers for end use in the United States.
• U.S. Supply: There is enough domestic supply of the product so that exporting it would not delay the company’s ability to meet current or future orders from U.S. customers for end use in the United States. In addition, global foundry capacity used to produce similar or more advanced commodities for end-users in the United States will not be diverted to produce products authorized by the license for export to China.
• Testing Requirement: Prior to export, representative samples of the advanced computing commodities described in the export application have been reviewed by a qualified, U.S.-headquartered third-party testing laboratory to confirm the technical capabilities and functionality of the commodities. The testing must take place in the United States; the lab cannot be under the control of an entity headquartered in Country Group D:5 or Macau; and the lab must have relevant qualifications and meet conflict of interest requirements specified under the rule. The review can be performed by a representative sampling of a batch of semiconductors chosen by the lab, rather than every individual semiconductor.
• Volume Cap: The aggregate shipments of the product to China and Macau must not exceed 50% of the total product shipped to customers for end use in the United States.
• End-User Requirements: 

-  The physical security of the AI commodities and the Know Your Customer procedures adopted by the ultimate consignee to screen and prevent unauthorized remote access by unauthorized parties.

-  Identification of customers that use these items remotely in an Infrastructure as a Service (IaaS) context and that are located in Belarus, China, Cuba, Iran, Macau, North Korea, Russia or Venezuela, or that are headquartered, or whose ultimate parent company is headquartered, in any of those jurisdictions.

-  For ultimate consignees/end-users of the AI commodities that provide IaaS, verification of compliance with certain specified requirements intended to prevent unauthorized access.

-  Confirmation that the items are not for a military, military-intelligence, nuclear, missile, or chemical or biological weapons end use or end-user.

BIS also made conforming changes to the regional stability (RS) and end-use controls under section 744.23 of the EAR to account for this new case-by-case review carve-out.

Importantly, the revised licensing policies apply only to exports from the United States; they do not apply to reexports from abroad or to in-country transfers. For reexports and in-country transfers to D:5 countries (e.g., China) or Macau, the licensing policy remains a presumption of denial. Consistent with EAR jurisdiction, the same is true for exports to end users outside D:5 countries or Macau who are headquartered in, or have a parent company headquartered in, a D:5 country or Macau. In other words, corporate structure alone can disqualify a license application from the case-by-case review policy.

Section 232 Actions

On January 14, 2025, President Trump announced actions following Commerce’s investigation under Section 232 of imports of semiconductors, semiconductor manufacturing equipment, and derivative products. These actions dovetail with the January 15, 2026, final rule on AI chip exports in significant ways.

Effective January 15, 2025, the Proclamation imposes a narrow 25% tariff on certain semiconductor articles^[1] that are: (1) logic integrated circuits (ICs) or articles containing logic integrated circuits and (2) meet the technical parameters of having:

• TTP greater than 14,000 and less than 17,500, and a total DRAM bandwidth greater than 4,500 GB/s and less than 5,000 GB/s; or
• TTP greater than 20,800 and less than 21,100, and total DRAM bandwidth greater than 5,800 GB/s and less than 6,200 GB/s.

The accompanying White House fact sheet noted NVIDIA H200 and AMD MI325X devices as examples of items that would be covered by the action.

These tariffs are designed to broadly exclude the vast majority of domestic use cases—what the Administration refers to as the “buildout of the U.S. technology supply chain.” Such exclusions include:

• Data centers (as defined in the Proclamation and implementing instructions),
• Repairs or replacements in the United States,
• R&D (as defined in the Proclamation and implementing instructions) in the United States,
• Use by startups in the United States,
• Use in non-data center consumer electronics applications in the United States, including gaming, personal computing, professional visualization, workstation applications and automotive applications.
• Non-data center civil industrial applications, including factory robotics and industrial machinery.
• Use in U.S. public sector applications.

These exemptions are implemented under separate Chapter 99 HTS codes provided in the implementing instructions. Importers of semiconductor articles under the HTS codes covered by the action should confirm first whether their imports meet the technical requirements for logic ICs, and which, if any, of the broadly drafted exceptions apply, and notate the appropriate Chapter 99 HTS code on their entry summaries.

In addition, the Proclamation provides that the Secretary of Commerce may exempt other uses that the Secretary determines contribute to the strengthening of the United States technology supply chain or domestic manufacturing capacity for derivatives of semiconductors. The Proclamation does not address the details of how BIS will implement the catch-all exemptions.

The semiconductor supply chain relies almost exclusively on foreign-made integrated circuits, which are imported into the United States for testing and development by U.S. developers, and then re-exported to customers abroad. Given the breadth of the exemptions for nearly all domestic uses and the overlap between the products subject to the scope of the tariffs and the export control rule, as a practical matter, the 25% tariff seems to apply to imports of the AI commodities covered by the recent BIS export control rule and therefore intended ultimately for export to China. As a result, commentators have observed that the January 15, 2026, BIS final rule and the semiconductor section 232 Proclamation, taken together, may be intended to implement the Trump administration’s announcement in September 2025 that the U.S. government would collect a percentage of sales of advanced AI commodities to China.

While the Proclamation expressly prohibits duty drawback, there may be other duty mitigations options available for AI commodities that are imported and re-exported after testing and development. For example, temporary import bonds under HTS 9813.00.30 expressly provide for the duty-free entry of articles for testing, experimentation and review prior to re-export within a prescribed time period.

Finally, Commerce is required to provide to the President an update on the semiconductor market used in U.S. data centers by July 1, 2026. The President may then decide to modify and implement further tariffs under the semiconductor Proclamation.

Negotiations
The U.S. Trade Representative (USTR) and Commerce will pursue negotiations with other countries regarding underlying threats to national security and provide an update to the President within 90 days (or by April 14, 2025). Targeted tariffs could then be imposed following the negotiations depending upon the outcome. For example, under the January 15, 2026, agreement between the United States and Taiwan, Taiwanese companies investing in the United States would receive exemptions from tariffs on semiconductors, which may form part of any negotiated outline.^[2] Commerce also recommended that tariffs be accompanied by a tariff offset program for companies investing in U.S. semiconductor production and certain parts of the U.S. semiconductor supply chain. Such offsets could resemble the program in place under the Section 232 action on autos and medium- and heavy-duty trucks for U.S. production.

Assessment

These actions have implications for both AI export policy and potential import restrictions.

AI Export Policy
The impact of the rule change for exports of semiconductor articles to China will depend upon implementation. The rule prescribes onerous requirements that may be difficult for companies to meet, such as certifications and information regarding U.S. and global supply and numerous conditions with respect to the Chinese end-users. In this regard, on January 14, 2026, Representative Molenaar, chair of the House Select China committee, wrote a letter to Commerce noting that the current global shortage of DRAM items may pose challenges for meeting the requirements of the licensing policy.

At the same time, Congress is deliberating legislation relevant to the review of export licenses of advanced AI commodities to China. For example, last week, the House Foreign Affairs Committee (HFAC) passed the Artificial Intelligence Oversight of Verified Exports and Restrictions on Weaponizable Advanced Technology to Covered High-Risk Actors (AI OVERWATCH) Act (introduced by HFAC Chairman Brian Mast out of committee. Among other things, the AI OVERWATCH Act would require a certification to the appropriate Congressional committees 30 days prior to BIS’s approval of any license for the export, reexport or in-country transfer of certain commodities to an entity with a nexus to a country of concern, which includes China (including Hong Kong and Macau), Cuba, Iran, North Korea, Russia, and any other country listed in Country Group D:5. The bill would apply to commodities classified under ECCN 3A090 or 4A090, and functional equivalents.

Import Restrictions 
The narrowly tailored nature of the Section 232 action may signal a recognition of the complications of imposing broad tariffs on semiconductors, which cross various jurisdictions over the course of production and are not typically imported as semiconductors but instead as downstream or derivative products that contain semiconductors. Furthermore, the limited remit of this action recognizes the potential implications of tariffs on semiconductor articles on U.S. manufacturing, including the buildout of data center infrastructure. These actions must also be situated within the context of ongoing bilateral trade negotiations with China following the détente announced in late October 2025 (discussed in our client alert here). This approach is consistent with the delay of tariffs in the Section 301 investigation on China’s APPs related to targeting of the semiconductor industry for dominance (which was driven by concerns regarding overcapacity in the foundational semiconductor market) announced in December 2025, under which, as noted above, USTR found the investigated APPs to be actionable, but deferred increased tariffs at a yet-to-be-announced rate on specified semiconductors for 18 months (June 23, 2027).

Moving forward, importers and end users along the semiconductor supply chain should monitor the ongoing negotiations, which could involve incentives for investing in the United States and joint cooperation on economic security concerns, such as concerns over non-market policies and their contribution to overcapacity of critical inputs.

^{[1] The action is limited to semiconductor articles classified under HTS 8471.50 (which covers processing units other than those of subheading 8471.41 or 8471.49, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units), 8471.80 (which covers certain units of automatic data processing machines), and 8473.30 (parts and accessories of heading 8471 that meet tailored technical parameters).}

^{[2] On January 15, 2026, the United States announced an agreement with Taiwan under which, per the fact sheet, Taiwanese companies that invest in semiconductor production in the United States may import up to 2.5 times planned capacity without paying Section 232 tariffs on semiconductors or, in the case of companies that have completed new chip production projects, 1.5 times their new U.S. production capacity without paying Section 232 duties. This could be a model for ongoing negotiations with other countries.}