By Martin Baccardax

President Donald Trump appears to have opened a new front in his effort to rework global trading alliances and boost tax revenue for the U.S. government, adding another layer of uncertainty to the tariff story that has dominated markets since the start of the year.

Signs are piling up that a "pay-to-play" dimension is emerging in U.S. trade policy that could both undermine confidence in the current tariff regime and raise concerns that the White House could seek similar arrangements from countries and companies around the world.

Multiple media reports suggest the U.S. government will take a 15% cut of the revenue generated by both Nvidia and Advanced Micro Devices from the sale of certain high-end chips used in artificial intelligence technologies to China. The payments would follow the renewal of export licenses previously suspended by the Trump administration amid concern that the semiconductors could find their way into the hands of companies with ties to the Chinese military.

Nvidia generated $4.6 billion in revenue from the sale of H20 chips, which are specifically designed for the China market, over its fiscal first quarter, the three months through April 27. It could have sold another $2.5 billion, the company said, had the new export-licensing requirements not come into effect.

AMD doesn't break down sales of its Instinct MI308 chips, which are also designed for sale in China. It did, however, book an $800 million charge to its second-quarter earnings related to U.S. export controls to China.

"It's bizarre," Constellation Research founder and chairman Ray Wang said during an interview with CNBC on Monday. "Are these chips national security issues or are they not? If they are, then why are we actually allowing the sale?"

Wang was also concerned the decision could appear arbitrary. "Does every president get to play kingmaker in terms of these deals?," he said. "And we still have additional tariffs and trade deals to come from the China negotiations. So we're not sure exactly if it's over yet."

All of this comes just days after last week's visit to the White House by Apple CEO Tim Cook. He gave the president a plaque with a gold base and promised to add $100 billion to the company's U.S. investment plans.

Trump then said companies making domestic investments in the tech sector would be exempt from sweeping tariffs on semiconductor imports and foreign-manufactured products.

The president also arranged a so-called golden share for the government in allowing the $14.1 billion acquisition of U.S. Steel by Japan's Nippon Steel earlier this spring. That gave the White House oversight and veto power regarding the combined group's U.S. operations.

Japan was also reported to have agreed to terms in its recent trade deal with Washington that will direct $550 billion in new investments into the U.S. economy. Trump called it a "signing bonus" in exchange for a 15% tariff rate, describing the funds as "our money to invest, as we like" in an interview last week with CNBC.

Officials in Japan have challenged that characterization, but have nonetheless said that around 2% of the $550 billion, or around $11 billion, will be considered an equity investment. The rest will be loans and various guarantees.

"This Federal shakedown of private companies is unconstitutional, as are export taxes," said Peter Schiff, chief economist and global strategist at Europac, in a post on X, referring to the reports that the chip makers will give a share of their revenue from semiconductor sales to the government.

Export tariffs are prohibited by Article I of the Constitution, which states that "No Tax or Duty shall be laid on Articles exported from any State."

The Constitution also provides Congress the power to set import tariffs, although the president can use various measures tied to the International Emergency Economic Powers Act, or IEEPA, to determine particular levies.

A case brought by 12 U.S. states and five U.S. companies challenging the president's use of the IEEPA was heard by the U.S. Court of Appeals for the Federal Circuit last week. A ruling could come within weeks, but the case is expected to be ultimately decided by the U.S. Supreme Court.

Last week, the president said via social media that it would be "impossible to ever recover, or pay back" the "massive sums of money" collected through tariffs if the court were to rule against him.

Data from the Peterson Institute for International Economics suggests the U.S. has collected around $93.9 billion in overall tariff revenue over the first six months of the year. That is only around 0.5% of the estimated $1.865 trillion federal budget deficit.

The levels of cash likely to flow from Nvidia's H20 chip sales to the coffers of the U.S. government are similarly paltry. At 15%, Nvidia would likely hand over around $2.76 billion.

In other words, the injection of a serious challenge to the Constitutional ban on export tariffs, as well as the creation of new uncertainties for every major U.S. company generating significant revenue from China, would only yield a level of cash equivalent to 6.5% of a regular monthly $42 billion 10-year Treasury note auction.

"Tariffs remain one of the hottest topics, with companies continuing to describe the situation as complicated, challenging, fluid, dynamic, and contributing to uncertainty," said RBC Capital Markets' Lori Calvasina, who heads the bank's U.S. equity strategy research team.

That is unlikely to change soon.

Write to Martin Baccardax at martin.baccardax@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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August 11, 2025 10:45 ET (14:45 GMT)

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