Trump Imposes Export Taxes On NVDIA And AMD, Unwise And Unconstitutional

By Mish Shedlock of MishTalk

Monday, August 11, 2025 1:17 PM EDT

More Than a Bit Unusual

Bloomberg reports Trump Bid for Cut of Chip Revenue Risks ‘Dangerous World’

Nvidia Corp. and Advanced Micro Devices Inc. agreed to pay the US government 15% of revenue from some chip sales to China. The chips — Nvidia’s H20 AI accelerator and AMD’s MI308 chips — were earlier banned by the Trump administration and require export licenses to sell.

“To call this unusual or unprecedented would be a staggering understatement,” said Stephen Olson, a former US trade negotiator now with the Singapore-based ISEA — Yusof Ishak Institute. “What we are seeing is in effect the monetization of US trade policy in which US companies must pay the US government for permission to export. If that’s the case, we’ve entered into a new and dangerous world.”

The chip-payment arrangement may face legal challenges because it could be construed as an export tax, something that’s not allowed under the constitution, trade experts said. The proposal is the latest direct government intervention into business and finance since Trump returned to the Oval Office in January. As well as a chaotic tariff campaign and persistent criticism of a sitting Federal Reserve chairman, Trump has used his Truth Social platform for everything from calling on CEOs to resign to offering commentary on corporate advertising campaigns.

The Nvidia and AMD revenue-sharing deals may now prompt the White House to target other industries and goods, according to Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore.

“The sky is the limit,” she said. “You could come up with all sorts of company-specific, country-specific combinations that would say, ‘No one else can trade, but if you pay us directly, then you get the ability to trade.’”

The Trump administration is already in the midst of a lawsuit related to his use of the International Emergency Economic Powers Act to levy what he called “reciprocal” tariffs on the world. On Friday, Trump warned of a “GREAT DEPRESSION” if US courts ruled that his tariffs were illegal.

Export Coercion

The BBC reports Nvidia and AMD to pay 15% of China chip sales to US

The US had previously banned the sale of powerful chips used in areas like artificial intelligence (AI) to China under export controls usually related to national security concerns.

Security experts, including some who served during President Donald Trump’s first term, recently wrote to the administration expressing “deep concern” that Nvidia’s H20 chip was “a potent accelerator” of China’s AI capabilities.

Nvidia told the BBC: “We follow rules the US government sets for our participation in worldwide markets.”

Nvidia and Advanced Micro Devices agreed to pay 15% of their revenues from chip sales to China to the US government as part of a deal with the Trump administration to secure export licenses. This Federal shakedown of private companies is unconstitutional, as are export taxes.
— Peter Schiff (@PeterSchiff) August 10, 2025

Unconstitutional

Q: Are export tariffs legal in the US?
A: No, the United States Constitution prohibits export tariffs.

Export Clause: Article I, Section 9, Clause 5 of the US Constitution explicitly states: “No Tax or Duty shall be laid on Articles exported from any State”.

Purpose: This clause was a compromise to protect the economies of Southern states that relied on exporting agricultural products.

Unwise

Chip exports either represent a security risk or they don’t.

Collecting an export tax does not mitigate security risks. If there is a security risk, Trump should ban the exports.

But if there is no security risk, what is Trump’s action other than an export tax or an illegal shakedown?

Trump’s Hyperbolic Idiocy

Truth Social Link

Tariffs are having a huge positive impact on the Stock Market. Almost every day, new records are set. In addition, Hundreds of Billions of Dollars are pouring into our Country’s coffers. If a Radical Left Court ruled against us at this late date, in an attempt to bring down or disturb the largest amount of money, wealth creation and influence the U.S.A. has ever seen, it would be impossible to ever recover, or pay back, these massive sums of money and honor. It would be 1929 all over again, a GREAT DEPRESSION! If they were going to rule against the wealth, strength, and power of America, they should have done so LONG AGO, at the beginning of the case, where our entire Country, while never having a chance at this kind of GREATNESS again, would not have been put in 1929 style jeopardy. There is no way America could recover from such a judicial tragedy, but I know our Court System better than anyone, there is no one in history that has gone through the trials, tribulations and uncertainties such as I, and absolutely terrible, but also amazingly beautiful, things can happen. Our Country deserves SUCCESS AND GREATNESS, NOT TURMOIL, FAILURE, AND DISGRACE. GOD BLESS AMERICA!

So, we collect tariffs, from US businesses and consumers, and it would be impossible to pay them back.

Yet, Trump says he’s considering rebate checks for Americans based on tariff revenue

President Trump on Friday said he’s considering issuing rebate checks for Americans based on the billions in new tariff revenue collected by his administration.

The federal government has collected about $100 billion in tariff revenue since the Trump administration instituted its higher import duties earlier this year, which could increase to $300 billion per year, Treasury Secretary Scott Bessent told Fox Business’ “Mornings with Maria” on Tuesday.

Somehow it would be impossible to pay back $300 billion out of a budget of $7 trillion. Yet, possible to send out rebate checks of some of that money.

If you believe this, you are as economically illiterate as Trump is. Where the H is any backbone from Republicans on these obvious lies?

Mercy, when and where does this unconstitutional economic stupidity end?

I can only imagine the howls from the MAGA hypocrites if Biden had done anything like this. Instead we have silence.

Monthly Revisions

The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000

The change for June was revised down by 133,000, from +147,000 to +14,000.

With these revisions, employment in May and June combined is 258,000 lower than previously reported.

August 3, 2025: Trump Puts 93.5 Percent Tariff on Graphite Needed for EV Batteries