• Trade War Front: The next front in Donald Trump's trade war will be chip tariffs by next month. National security experts warn he may have made a misstep that disrupts US trade and national security.
• Nvidia H20 Chips: In a Monday letter to Commerce Secretary Howard Lutnick, 20 policymakers and national security experts urged Trump to block Nvidia's H20 chip exports to China. In April, Trump reversed course on H20 chip export curbs after Nvidia CEO's payment and investment promise.
• National Security Concerns: Experts expressed deep concern that H20 chips could endanger US military's AI edge and fuel China's military modernization. These chips are optimized for inference and China may use them for military AI models.
• Investigation on Chip Tariffs: The Trump administration is investigating how chip tariffs and imports could harm national security with a report due in two weeks. Experts fear Trump isn't paying enough attention to the threat.
• Potential Outcomes: More chips for China means fewer for the US. China's tech firms have spent on H20 chips. If Trump doesn't intervene, America's AI rivals could drive up chip costs. Experts urge Trump to reverse course for national security.
• Perceived Weakness: If Trump backs down on H20 controls, it could give China leverage and embolden them in trade negotiations. A potential trade deal with China may take time and Trump's actions could have implications for other trade deals.
• Trump's Admission: Trump confessed he didn't know what Nvidia did before threatening to break it up. Since he campaigned on using tariffs to win the AI race, his lack of awareness of the leading AI chip firm is surprising.