A Mixed Bag of Chips: Significant New Import and Export Changes for Advanced Semiconductors

Key Points

• The U.S. Department of Commerce issued a rule newly permitting certain advanced, H200/MI325X-grade computing chips classified under Export Control Classification Number (ECCN) 3A090 to be eligible for export to China, subject to a case-by-case licensing policy instead of a policy of denial.
• In order to be eligible for the case-by-case licensing policy, chips must undergo U.S.-based testing, and exporters must provide additional certifications or verifications regarding the performance criteria, supply, and end use(r) prior to export to China.
• In concert, the U.S. government enacted a 25 percent Section 232 tariff on the import of this merchandise, creating an avenue for the U.S. government to obtain a cut of permitted sales. Exceptions to this new tariff policy will permit U.S. data centers, start-ups, and certain other tech users to continue importing these items without incurring this cost.

The U.S. government kicked off the year with significant trade updates affecting the advanced semiconductor industry. These new policy changes have opened new avenues for certain U.S. companies to export advanced chips to China, while simultaneously imposing a new tariff on the import of these items. The new policy changes are intended to enable the U.S. government to prioritize supply for U.S. datacenters, further incentivize U.S. domestic manufacturing of advanced semiconductors, and profit from the sales of these chips to China.

First, on January 14, 2026, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) released a final rule easing export controls on advanced computing chips destined to end-users in China. Consistent with President Trump’s artificial intelligence (AI) export promotion policy, BIS will allow, in certain cases, the export from the United States (but not the re-export or in-country transfer) of certain advanced computing exports to China (including Hong Kong and Macau) by shifting the licensing policy from a presumption of denial to a case-by-case review.

Then, on January 14, 2026, pursuant to a Proclamation (the Semiconductor Tariff Proclamation) issued by President Trump,¹ U.S. Customs and Border Protection (CBP) implemented a new 25 percent Section 232 tariff applicable to certain advanced semiconductor imports. This new tariff, when applied in conjunction with the new export rule permitting certain U.S.-tested advanced computing chips to be exported to China, provides the United States government a mechanism to collect a 25 percent premium on each covered sale. Notably, the tariff framework provides a number of novel, broad, and tech-friendly tariff exemptions to support the continued development of U.S. data centers, the growth of U.S. start-ups, and consumers and developers of emerging technologies.

These new rules implement significant policy shifts affecting the advanced semiconductor industry, in line with a new federal government strategy to expand the reach of the U.S. tech stack while ensuring that the U.S. government receives a direct financial benefit from these newly approved sales.

BIS Invites Advanced Semiconductor Manufacturers to Lay Down Their Chips … in China

The new BIS rule eases the export controls on advanced computing commodities² destined to end-users in China (including Hong Kong and Macau), implementing a case-by-case license review policy for export of these commodities to end-users in China. Notably, the same policy does not apply to re-exports or in-country transfers to destinations in Country Group D:5 or Macau, which remain subject to a presumption of denial. In addition, exports to entities that are headquartered in or have a parent entity based in Country Group D:5 or Macau also remain subject to a presumption of denial.

Thus, in order to be eligible for the case-by-case review, exporters must provide the following:

• a certification that the items (i.e., the total processing performance (TPP), the “total DRAM bandwidth,” the “interconnect bandwidth,” “copackaged DRAM capacity,” and the peak power consumption at max TPP) operate below the performance specifications in this rule;
• the total number of units that were shipped to U.S.-based commercial customers for end use in the United States;
• any changes to the specifications for this model since launched or previously shipped;
• confirmation that there is a sufficient supply in the United States so that there will be no delays in fulfilling U.S. orders;
• confirmation that global foundry capacity that would support U.S. supply will not be diverted to produce the exported chips;
• evidence that the aggregate TPP of items exported will be no more than 50 percent of the aggregate TPP shipped to customers and end users in the United States;
• a statement that the commodities will not be used to support a prohibited end use or end user; and
• a description of customer verification and physical security measures that will be implemented to prevent remote access for unauthorized end uses or by unauthorized end users.

If the items will be used to provide Infrastructure-as-a-Service (IaaS), the exporter must provide further verifications:

• a list of any intended IaaS remote end users located, headquartered, or with an ultimate parent headquartered in Belarus, China, Cuba, Iran, Macau, North Korea, Russia, and Venezuela;
• verification that the ultimate consignee or IaaS end user:
  • is not a military end user;
  • will not transfer model weights trained on the AI commodities to any unauthorized end user; and
  • will not provide a military end user with remote access to any algorithm trained on the AI commodities.

It is important to note that prior to export, every shipment of advanced computing commodities must be reviewed (through a representative batch sampling) by a qualified, independent, third-party testing lab to confirm the technical capabilities and functions of the AI commodities described in the exporter’s license application. The testing must occur in the customs territory of the United States by a qualifying U.S.-headquartered lab.

But the U.S. Government Also Asks Chip Exporters to “Ante Up”

While the export changes outlined above reflect a significant opening up of advanced computing chip commodities to China, newly authorized exporters will pay a cost to engage in such exports, as will non-privileged importers. The new 25 percent Section 232 semiconductor tariff that CBP implemented in accordance with the Semiconductor Tariff Proclamation follows the Office of the U.S. Trade Representative’s Section 232 investigation into the national security implications of U.S. imports of certain foreign-produced semiconductor items.³

Specifically, this new Section 232 tariff of 25 percent reaches items classifiable under subheadings 8471.50, 8471.80, and 8473.30 of the Harmonized Tariff Schedule of the United States (HTSUS) meeting the following performance parameters:

• (1) a TPP 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
• (2) a TPP 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.

These performance parameters are designed to capture advanced semiconductor commodities such as the H200 and MI325X, leading chips designed by the U.S.’s largest chip companies.
Products covered by this new Section 232 semiconductor tariff are broadly exempted from other recent Section 232, Section 301, and International Emergency Economic Powers Act (fentanyl-related and reciprocal) tariffs announced last year. Items eligible for certain special entry provisions under Chapter 98 of the HTSUS may also be exempt from the new tariff.

Chips off the (New) Block

Certain privileged imports of the covered goods are wholly exempted from the new 25 percent Section 232 semiconductor tariff, including:

• Items that are for use in U.S. data centers, facilities requiring greater than 100 megawatts (MW) of new load dedicated to AI inference, training, simulation, or synthetic data generation;
• Items that are for repairs or replacement in the United States;
• Items that are for research and development in the United States—(a) a systematic, intensive study directed toward greater knowledge or understanding of the subject studied; (b) a systematic study directed specifically toward applying new knowledge to meet a recognized need; or (c) a systematic application of knowledge toward the production of useful materials, devices, services, or methods, and includes design, development and improvement of prototypes and new processes to meet specific requirements;
• Items that are for use by “start-ups” (“emerging growth companies,” as defined at 15 U.S.C. § 77b(a)(19)) in the United States;
• Items that are for use in non-data center consumer electronics applications in the United States, including gaming, personal computing, professional visualization, workstation applications, and automotive applications;
• Items that are for use in non-data center civil industrial applications in the United States, including factory robotics and industrial machinery;
• Items that are for use in U.S. public sector applications.

Most of these exemptions are completely novel in the tariff context. Notably, items that are exported after undergoing U.S. testing are not exempt. Thus, exports of H200, MI325X, and similar chips to China would be subject to the new 25 percent tariff. In addition, imports designed for a use other than the privileged use cases above would also be subject to the new 25 percent tariff, disincentivizing use for alternative applications.

Given these expansive exceptions, this action still falls significantly short of the 100 percent semiconductor tariffs threatened in late September 2025. However, the White House released a fact sheet indicating that additional semiconductor tariffs could still be forthcoming. Importantly, as a Section 232 tariff, this tariff is not being implemented under one of the tariff authorities currently being challenged in the pending U.S. Supreme Court case, which we’ve written about here. Accordingly, this policy would survive a Supreme Court opinion invalidating many of the other tariff policies implemented last year.

[1] Proclamation: Adjusting Imports of Semiconductors, Semiconductor Manufacturing Equipment, and Their Derivative Products into the United States (Jan. 14, 2026).

[2] For purposes of the BIS rule, advanced computing commodities are those items with a TPP less than 21,000 and a total dynamic rapid-access memory (DRAM) bandwidth less than 6,500 GB/s (e.g., the H200 and MI325X chips).

[3] Under a newly announced trade deal with Taiwan, Taiwanese semiconductor producers that invest in the U.S. may qualify for a reduced rate on some imports.