Trump caving on Nvidia H20 export curbs may disrupt his bigger trade war

The next front in Donald Trump's trade war will be chip tariffs—which could come by next month—but national security experts are warning that the president may have already made a huge misstep that threatens to disrupt both US trade and national security.

In a letter Monday to Department of Commerce Secretary Howard Lutnick, 20 policymakers and professionals with a background in national security policy urged Trump to reverse course and block exports of Nvidia's H20 chips to China.

In April, the Trump administration decided against imposing additional export curbs on H20 chips after Nvidia CEO Jensen Huang paid $1 million for a seat at a Mar-a-Lago dinner, NPR reported. Apparently, Nvidia's promise to invest $500 billion in AI data centers helped persuade Trump to change course, as did the terms of a temporary truce with China, in which the US promised to halt H20 chip controls in exchange for China restoring imports of rare earth minerals into the US.

In their letter, national security experts expressed "deep concern" that Trump may not have considered how Nvidia's H20 chips could endanger the US military's "edge in artificial intelligence" while serving as a "potent accelerator of China’s frontier AI capabilities."

While these chips can't be used for AI training like the Blackwell and H100 chips still restricted by export curbs, they're "optimized for inference, the process responsible for the dramatic capabilities gains made by the latest generation of frontier AI reasoning models," experts warned.

Most likely, China will use the chips for AI models deployed by its military to "enable autonomous weapons systems, intelligence surveillance platforms, and rapid advances in battlefield decision-making," experts said. In that way, "by supplying China with these chips, we are fueling the very infrastructure that will be used to modernize and expand the Chinese military," they warned.

The Trump administration is notably investigating how chip tariffs and imports could harm national security, with a report due out in two weeks, Lutnick announced today. That report will supposedly help Trump determine if relying too much on other countries for chips poses a national security threat.