Treasury Secretary: Trump Administration to Utilize NVIDIA’s 15% China H20 GPU Sales Tax for Debt Reduction

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In a recent interview with Bloomberg, Treasury Secretary Scott Bessent revealed that the Trump administration plans to tackle the US debt by utilizing revenue generated from a commission imposed on the sales of AI chips to China by NVIDIA and AMD. Both companies are set to pay a 15% fee to the US government for their AI GPU sales in China, with NVIDIA’s H20 being the only product currently affected by this new regulation. According to Bessent, the initiative originated with President Trump, who envisions expanding this commission model to additional industries in the future.

President Trump Champions NVIDIA’s Chip Sales Strategy, Treasury Secretary Affirms

During the interview, Bessent addressed inquiries regarding the origins of the agreement with NVIDIA. He emphasized that the deal was conceived by President Trump, who he described as highly open-minded and methodical, approaching such decisions with fundamental reasoning: “Why do we do things this way? Why not consider alternatives?”

Bessent expressed optimism about the agreement’s advantages for NVIDIA, suggesting that it would allow the company to penetrate the Chinese market more effectively, positioning its chips as critical components in Chinese technology development. Consequently, this would also benefit US taxpayers by providing them a share of the earnings.

While acknowledging the potential for the commission model to extend to other sectors, he noted that it currently applies exclusively to NVIDIA and AMD.

Addressing concerns regarding national security implications, Bessent reassured listeners that there are no security risks tied to the NVIDIA H20 GPUs since they do not feature the latest technologies.“These chips are not cutting-edge; they sit several levels down in the chip hierarchy, ” he explained. He stressed, “We are not interested in facilitating another Huawei-like situation, where Chinese standards dominate globally or even within China.”

Following the procurement of H20 export licenses by NVIDIA, reports surfaced indicating that the Chinese government harbors concerns about potential backdoors and tracking technologies in NVIDIA’s products. Bessent interpreted these apprehensions as indicative of China’s awareness of the importance of NVIDIA chips within its market.

In a candid discussion, Bessent acknowledged the issue of technology theft, asserting, “NVIDIA produces exceptional products, but much of the technology in China often relies on borrowed concepts.”He characterized this situation as “piggybacking”on American innovations.

Bessent clarified that the Trump administration’s actions concerning NVIDIA do not reflect government overreach into private enterprise. Instead, he articulated a shift from “unfettered trade”towards “secure and fair trade.”He lamented that previous trade practices did not ensure security or fairness and emphasized the necessity for intervention in this evolving landscape.“We must be prudent; not all chips should be freely distributed, ”he remarked.

Ultimately, Bessent concluded that the revenue generated from these transactions would assist in reducing the national debt. He also referenced President Trump’s initiative, known as “One Big Beautiful Bill, ”which includes advantageous provisions for lower wage earners, such as the elimination of taxes on tips and overtime.

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