The topic is the recent developments in US tariffs on advanced semiconductors (often called “chips” in this context), announced mid-January 2026 under Section 232 for national security reasons. This includes a targeted 25% tariff on certain high-end AI/computing chips (like Nvidia H200 and AMD MI325X equivalents), tied to export controls allowing limited sales to China—but with the tariff effectively taking a US government cut on those flows. Exemptions apply for domestic US uses (data centers, R&D, startups, etc.), and it’s paired with a US-Taiwan trade deal incentivizing reshoring via tariff relief for investments in American production. Broader tariffs are threatened or deferred, with updates planned. This fits the CHIPS-related trade tensions story, emphasizing mercantilist competition with China.
**Welcome back, team!** In this episode of Dave Talks Politics, hi, I’m Dave, and I’ll be talking politics. Today, team, let’s talk about the fresh US tariffs on advanced semiconductors—the so-called “chips tariff” move just dropped in January 2026.
If you’re new to the channel, hey, take a moment, subscribe to the channel, then hit the bell to be alerted about new episodes when they drop.
**OVERVIEW**
Team, this is big. On January 14, 2026, President Trump signed a proclamation under Section 232—national security grounds—hitting certain advanced computing chips with a **25% tariff** on imports. Effective January 15. We’re talking high-end AI beasts, stuff like Nvidia’s H200 or AMD’s MI325X level—chips that power massive data centers and training runs.
But here’s the clever bit. Exemptions carve out huge chunks: no tariff if these chips go to US data centers, R&D, startups, consumer gear, industrial uses, public sector, or anything the Commerce Secretary deems builds up America’s own tech supply chain. So domestic buildout? Protected.
Why now? Ties straight to export controls. The admin eased up slightly—shifting from “presumption of denial” to case-by-case licensing for exports of these chips to China (and Macau). But to get that license? The chips often route through the US for testing/certification. Boom—triggers the import tariff. Effectively, the US takes a **25% cut** on sales headed to China. Smart mercantilist play. Revenue for the Treasury while controlling the flow.
And layered on top? A fresh US-Taiwan trade deal announced January 15. Taiwan commits massive investment—$250 billion into US semiconductor, AI, energy production. In return, tariff relief: reciprocal rates capped at 15%, and Section 232 breaks for Taiwanese firms scaling up in America—import quotas without duties during build phases. Goal? Pull 40% of Taiwan’s chip supply chain stateside. Classic reshoring push.
**BREAKDOWN**
Geography and demographics drive this, team. China dominates manufacturing scale—resilient, strategic, pouring resources into domestic fabs, immigration tweaks for talent, AI integration everywhere. Their edge? Volume, planning, state-backed muscle.
The US? Still leads in design innovation—Nvidia, AMD, the brains. But production? Heavily offshore, vulnerable chokepoints in Taiwan. These tariffs aren’t blanket protectionism. Narrow, targeted. Punish reliance on foreign advanced chips not feeding US growth. Reward onshoring.
From my Kiwi perch—New Zealand’s no stranger to trade realities. We rely on exports to Asia, love the China relationship for economic reasons, keep that neutral “Switzerland of the South Pacific” vibe. Multicultural ties run deep. But we watch this superpower mercantilist race closely.
The US has history here—innovated out of holes before. Post-WWII, post-Cold War, tech booms. It can again—AI, robotics, biotech breakthroughs. But requires radical shifts. Overhaul supply chains. Boost domestic fabs via CHIPS Act spirit, but go further.
Key? **Deregulation**. Free market thrives on low interest rates, slashing red tape—not endless federal cash. One bold path: strip back federal overreach, let states compete. Some states go all-in on incentives, low regs, attract fabs and talent. Others lag—tough, but constitutional. Winners pull the nation forward—like 50 nimble destroyers vs one giant carrier. Diverse, adaptive, harder to sink.
China’s formidable. More likely to dominate long-term without US changes. But America’s not done. Fragile window exists—if it unites on trade wins, not dumb ideological fights. Avoid proxy wars with closer-aligned powers like Russia—that’s wasteful. Europe/UK tensions? Partly self-inflicted, Ukraine kickoff included. Focus on mercantilism—who masters global trade rules.
**BOTTOM LINE**
This chips tariff isn’t the endgame. It’s phase one—narrow, revenue-generating jab at China flows, while protecting US buildout and courting allies like Taiwan. Broader tariffs loom if deals falter. Updates due mid-2026 on data center markets.
Team, geography says China holds manufacturing high ground. Demographics favor their scale. But US innovation DNA runs deep. Radical reforms—deregulation, state competition, supply-chain sovereignty—could flip it. Without? China likely pulls ahead in the long mercantilist marathon.
