US to Lift Export Curbs on Nvidia's H20 Chips to China; Lawmakers Seek Clarity

Bessent, asked on Bloomberg TV July 15 whether the U.S. will grant those export licenses to Nvidia, said the U.S. will approve them if the government determines Beijing already has a similar chip, which he suggested it does.

“I think that'd be a judgment that the Chinese indigenous manufacturers, namely Huawei and some others, already have an equivalent chip,” Bessent said. “So if there is an equivalent chip, then the Nvidia H20 could be sold.” If the U.S. doesn’t allow Nvidia to sell the H20 chip to China, the U.S. would only hurt Nvidia’s sales and incentivize Chinese customers and others to buy non-U.S. chips, he said.

“The one thing that we do not want is a digital Belt and Road springing up around the world, because other countries or China are substituting for our American chip manufacturers,” Bessent said.

Nvidia said July 14 it’s preparing to export those chips, pending license application decisions by the Commerce Department. “The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company said.

The announcement came days after Nvidia CEO Jensen Huang met with President Donald Trump and U.S. policymakers, “reaffirming NVIDIA’s support for the administration’s effort to create jobs, strengthen domestic AI infrastructure and onshore manufacturing, and ensure that America leads in AI worldwide,” the company said. He also met with Chinese government and industry officials in Beijing to “discuss how AI will raise productivity and expand opportunity.”

“General-purpose, open-source research and foundation models are the backbone of AI innovation,” Huang said. “We believe that every civil model should run best on the U.S. technology stack, encouraging nations worldwide to choose  America.” 

The announcement by both Nvidia and Bessent came about three months after the Trump administration informed Nvidia and other chip firms that they needed licenses for shipments of certain advanced chips to China, including the H20. The U.S. at the time told Nvidia that the new license requirement would address the risk that the chip "may be used in, or diverted to, a supercomputer in China,” and said the restriction would be in place “for the indefinite future” (see 2504160026).

Asked why the Trump administration has now changed its mind, Bessent said the U.S. was using the H20 export control as a bargaining tool during trade talks with Beijing in Geneva in May and London in June. After the London talks, the U.S. announced that it would be lifting certain export controls against China in return for Beijing easing export restrictions over certain rare earths (see 2506110044).

“You might say that that was a negotiating chip that we used in Geneva and in London,” Bessent said.

But Bessent, questioned last month by Congress about the agreement, denied that the deal was a “quid pro quo” (see 2506120046). Asked during that congressional hearing whether the U.S. was planning to ease any export controls on China’s access to advanced U.S. chips, Bessent said the administration had “done just the opposite. We put export controls on the Nvidia H20, which I would regard as a very upper-end chip but not the highest-end chip.”

Asked again on Bloomberg TV July 15 whether the deal with Beijing was a quid pro quo, Bessent said: “I think it was all part of a mosaic. They had things we wanted. We have things they wanted. And we're in a very good place.”

David Sacks, the president's AI policy adviser, said on a Bloomberg podcast July 15 that the U.S. still has a "policy of not selling our state-of-the-art advanced semiconductors" to China. He added that the H20 is "not that -- it's a heavily deprecated chip."

"As Secretary Bessent said, there were some things that China wants from us, there are other things we want from China," Sacks said, "and this was all part of the overall trade negotiation."

House Select Committee on China Chairman John Moolenaar, R-Mich., said he "strongly supported" Commerce's decision in April to restrict the H20 chips, adding that it was a "critical and meaningful step toward limiting" China's access to advanced semiconductor technology. He and Raja Krishnamoorthi, D-Ill., the committee's ranking member, warned the administration in January that H20 chips, if not controlled, could help China develop advanced AI technologies (see 2501300067).

"I’ll be seeking clarification from Commerce regarding NVIDIA's statement," Moolenaar said in a July 15 emailed statement. "The H20 is a powerful chip that, according to our bipartisan investigation, played a significant role in the rise of [People's Republic of China] AI companies like DeepSeek. It is crucial that the U.S. maintain its lead and keep advanced AI out of the hands of the" Chinese Communist Party.

Krishnamoorthi called the decision to allow H20 exports "misguided." It will "not only hand our foreign adversaries our most advanced technologies, but is also dangerously inconsistent with this administration’s previously-stated position on export controls for China," he said in an emailed statement. “Congress will have much more to say on this in the coming days.”

Senate Banking Committee ranking member Elizabeth Warren, D-Mass., also criticized the decision. “It is shameful that even as American companies, small businesses, and universities wait months, if not years, to acquire chips for developing artificial intelligence, Nvidia and the Trump administration are prioritizing sending these chips to the People’s Republic of China,” Warren said in a statement.

She noted that the Trump administration "rightfully banned Nvidia from shipping the H20 chip to the PRC just three months ago. Yet, true to form, the Trump administration is now reversing itself and appeasing Nvidia’s CEO who attended the $1-million-dollar-a-head dinner at Mar-a-Lago in April and looking to cash in on the China market. AI is a strategic technology with military applications, and U.S. companies should not be helping the PRC harness the technology in a manner that harms U.S. national security. The Trump administration’s short-sighted decision today comes at the expense of U.S. startups and small businesses that are the future of U.S. technological leadership.”

Bessent said he has a meeting scheduled with his Chinese counterpart in the “next few weeks,” and the U.S. hopes to soon make progress on other trade issues with China.

“Now, having settled on tariffs, on the export controls, we can move on to the next stage of talks,” he said. “And I think it's very important, both for the global economy, for the U.S. economy and for the Chinese economy, for us to move on and talk about China opening its markets and the increased domestic and consumer production there.”

The U.S. historically has refrained from including national security-related export controls in trade negotiations, especially in talks with China (see 2506120061). Christopher Padilla, a former Commerce Department official and now a senior adviser with the Brunswick Group, said on LinkedIn that China has "sought to make U.S. national security export controls a negotiable and transactional part of the trade relationship" for more than 40 years. "They have finally succeeded."

He also questioned how other American trading partners will view the decision. "U.S. allies will wonder why they should go along with tougher restrictions on their exports of high-tech goods to China (like semiconductor manufacturing equipment) when the U.S. is prepared to trade them away," Padilla said.

A Chinese Foreign Ministry spokesperson on July 15 said China opposes the "politicizing, instrumentalizing and weaponizing tech and trade issues and malicious attempts to blockade and keep down China." Those "actions will destabilize the global industrial and supply chains, and serve no one’s interests," the spokesperson said at a regular press conference in Beijing.