Trump to impose tariffs on foreign chips amid success of China’s DeepSeek AI model

US President Donald Trump’s threat to impose tariffs on semiconductors came hours after investor concerns about Chinese AI startup DeepSeek rattled markets. The concerns have also cost Nvidia Corp. billions in market capitalization. Trump says the tariffs will help keep and expand U.S. production of advanced chips, compared with a subsidy program supported by former President Joe Biden, reported by Bloomberg.

U.S.-China competition

The latest DeepSeek model caused a shock when independent tests showed it was competitive with resource-intensive models from OpenAI and Meta Platforms Inc. Meanwhile, Trump hailed the news of DeepSeek’s apparent progress in AI as a “positive” and issued a warning.

He stressed that the release of DeepSeek AI by a Chinese company should be a wake-up call for American industries. And that means the US needs to focus on competition to win, because America has the best scientists in the world, Trump believes. He added that even Chinese leaders have told him that the US has the most brilliant scientists in the world.

Trump’s reaction to DeepSeek

The US has tried to curb China’s progress in artificial intelligence by banning the export of certain advanced semiconductor technologies and by restricting the sale of advanced Nvidia AI chips. But DeepSeek’s progress suggests that Chinese AI engineers have found a way around the export ban by focusing on being more efficient with limited resources. Trump said he had read about DeepSeek and took their apparent breakthrough as positive news because it doesn’t require a lot of money.