The move addresses a long-running debate over whether US chipmakers should sell advanced AI technology to China to preserve global market leadership or withhold exports on national security grounds.
Trump said the US Commerce Department was finalizing the details and that the same approach would apply to other AI chipmakers, including Advanced Micro Devices and Intel.
He said the fee would be “$25%,” which a White House official later confirmed meant 25%, higher than the 15% proposed in August.
Trump said he had informed Chinese President Xi Jinping of the decision and that Xi “responded positively.”
Nvidia shares rose 2% in after-hours trading following Trump’s announcement on Truth Social, after gaining 3% earlier in the day on a report by Semafor.
Trump said exports would take place “under conditions that allow for continued strong National Security.”
“We will protect National Security, create American Jobs, and keep America’s lead in AI,” Trump wrote on Truth Social.
“NVIDIA’s US Customers are already moving forward with their incredible, highly advanced Blackwell chips, and soon, Rubin, neither of which are part of this deal.”
Trump did not specify how many H200 chips would be authorized for shipment or what detailed conditions would apply.
Administration officials view the decision as a compromise between allowing sales of Nvidia’s most advanced Blackwell chips to China, which Trump has declined to approve, and banning all US chip exports, a step officials fear could strengthen Huawei’s position in China, a person familiar with the matter said.
“Offering H200 to approved commercial customers, vetted by the Department of Commerce, strikes a thoughtful balance that is great for America,” Nvidia said in a statement.
A White House official said the 25% fee would be collected as an import tax from Taiwan, where the chips are made, to the United States, where the chips will undergo a security review before being exported to China.
China hawks in Washington have warned that selling more advanced AI chips to China could accelerate Beijing’s military capabilities.
Those concerns first prompted limits on such exports under the Biden administration.
The Trump administration had been considering approving the sale, sources told Reuters last month.
Trump said last week that he met with Nvidia Chief Executive Jensen Huang and that the executive was aware of his position on export controls.
“It’s a terrible mistake to trade off national security for advantages in trade,” said Eric Hirschhorn, a former senior Commerce Department official during the Obama administration.
“It cuts against the consistent policies of Democratic and Republican administrations alike not to assist China’s military modernization,” he added.
According to a report released on Sunday by the non-partisan Institute for Progress, the H200 would be almost six times as powerful as the H20, the most advanced AI chip that can legally be exported to China.
The Blackwell chip now used by US AI firms is about 1.5 times faster than the H200 for training and five times faster for inferencing, the group said.
Nvidia’s own research has suggested Blackwell chips are 10 times faster than H200 chips for some tasks.
Several Democratic US senators described Trump’s decision as a “colossal economic and national security failure” in a statement.
Republican Representative John Moolenaar, who chairs the House China Select Committee, said China would use the chips to strengthen its military and surveillance capabilities.
“Nvidia should be under no illusions - China will rip off its technology, mass-produce it themselves and seek to end Nvidia as a competitor,” he said.
Meanwhile, the approval comes as China is intensifying efforts to reduce its reliance on Nvidia’s chips.
China’s cyberspace regulator in July accused Nvidia’s H20 chips of potentially carrying backdoor security risks, an allegation Nvidia has denied.
In recent months, Beijing has cautioned Chinese technology firms against buying downgraded Nvidia chips sold in China, including the H20, RTX 6000D and L20, two sources said.
“Chinese firms want H200s, but the Chinese state is driven by paranoia and pride,” said Craig Singleton, a senior fellow at the Foundation for Defense of Democracies.
“Washington may approve the chips, but Beijing still has to let them in,” he said.
In a related development, the shift on H200 exports came the same day that the Justice Department said it had broken up a China-linked chip smuggling ring that exported and attempted to export at least $160 million worth of controlled Nvidia H100 and H200 chips in late 2024 and early 2025.
Chris McGuire, a former US State Department official and expert on technology and national security, said Chinese firms would likely still buy H200s because the chip “is better than every chip the Chinese can make.”
China’s domestic AI chip sector includes Huawei Technologies, which released a three-year product roadmap in September, as well as smaller firms such as Cambricon and Moore Threads.
China’s SSE STAR Chip Index and the CSI Semiconductor Industry Index both fell more than 1% at the market open on Tuesday but recovered most of the losses later in the session.