The Trump administration fundamentally reversed U.S. semiconductor policy on January 14, 2026, shifting from a "presumption of denial" to a "case-by-case review" approach for exporting advanced AI chips like NVIDIA's H200 to China. This marks a substantial departure from U.S. policy since 2022, which aimed to maintain America's AI advantage by restricting China's access to advanced chips. However, the administration imposed a 25% tariff on advanced chip imports intended for export to China as a counterbalance, effectively creating a revenue-sharing mechanism rather than an outright ban. Meanwhile, Congress has simultaneously advanced the AI OVERWATCH Act, which would treat advanced semiconductor exports like weapons sales and prohibit Blackwell chip sales to foreign entities of concern for two years—representing ongoing congressional resistance to the administration's more permissive approach.

China has significant leverage in semiconductor negotiations because it dominates the global supply of materials essential for chip manufacturing. China refines approximately 70% of the world's silver used in chips and controls the processing of rare earth elements such as gallium, which are critical for advancing chip production. Since July 2023, China has tightened export controls on these critical minerals, escalating to outright export bans to the United States in December 2024. This mineral leverage has pressured the U.S. to soften its stance on chip exports to China, as the U.S. semiconductor supply chain depends on these foreign-sourced materials. The Trump administration's decision to allow H200 chip exports to China reflects, in part, this vulnerability to China's mineral export restrictions.