Today’s math lesson: 15 percent of nothing is nothing. 
China Tightens Checks on Nvidia AI Chips at Major Ports
Please note that since August 2025, Chinese regulators issued directives for major tech companies to shun NVIDIA’s AI chips.
This effectively halted sales of products like the China-specific H20 and RTX Pro 6000D.
On October 10, Reuters reported China Tightens Checks on Nvidia AI Chips at Major Ports
China has intensified enforcement of its import restrictions on U.S. chips, including Nvidia’s (NVDA), opens new tab artificial intelligence processors, the Financial Times reported, as Beijing sharpens its focus on promoting home-grown semiconductor production.
The newspaper said the inspections targeted Nvidia’s H20 and RTX Pro 6000D, designed to adhere to U.S. export controls, initially.
The checks have been extended to include all advanced semiconductor products that breach U.S. export curbs, the report said.
The Financial Times newspaper had previously reported that at least $1 billion worth of Nvidia’s top AI chips were smuggled and sold in China in the three months from May. Reuters could not independently verify the report.
Nvidia has a new AI chip ‘RTX6000D’ tailored for the Chinese market, Reuters reported last month, but it has seen only lukewarm demand with some major tech firms opting not to place orders.
Unconstitutional Levy
The Tax Policy Center comments on The Trouble With Trump’s Deal With Nvidia and AMD: It’s An Export Tax
Two of the nation’s most prominent chipmakers have agreed to pay the US government 15 percent of their revenues from the sale of artificial intelligence chips to China. In effect, the firms will be paying an export tax, though neither they nor the administration describes it this way. One reason why: Such a levy appears to be unconstitutional.
Whatever it is called, this arrangement may prove bad for the economy, for national security, and even for many of the president’s own priorities.
A Constitutional Problem
Like Trump’s recent tariff agreements with Japan and the European Union, few details accompanied this arrangement. How exactly will it be structured? What guardrails will be put in place to limit avoidance and evasion?
Neither the companies nor the Administration is calling this a tax, for at least two possible reasons.
First, raising taxes on US businesses is a bad look for an Administration that wants to be seen as cutting corporate taxes.
Second, and perhaps most important, export taxes are explicitly prohibited by the US Constitution. Article I says, “No Tax or Duty shall be laid on Articles exported from any State.”
Trump and the firms may be trying to avoid that ban by implying the payments are voluntary. But if the firms could not get export licenses without agreeing to the payments, their optionality is questionable.
Trump has made no secret of his desire to greatly expand the government’s ability and his personal authority to manage investment decisions normally made by business. This goes well beyond broad policy initiatives to encourage domestic manufacturing. For example, the Administration reportedly is considering acquiring a stake in another chipmaker, Intel, and Trump says he’ll personally control a share of foreign investment in the US.
The export tax will be difficult to collect. Chip smuggling already is a serious problem. This tax is likely to increase the practice.
And without guardrails, what will prevent US producers from selling to a middleman who can resell to China? For example, firms avoided paying 2018 tariffs on goods from China by first shipping them to Vietnam and then to the US. The same can happen in reverse with export taxes.
The levy will create additional incentives for China to find other markets or, more likely, produce domestic versions of AI chips.
Finally, levies such as this create serious potential for corruption. If the government can pick and choose what products and what producers are subject to an export tax, there is nothing to prevent a firm from using political influence to gain an exception that is unavailable to its competitors.
This export tax, by any name, is a poor idea. It will generate relatively little revenue, fail to protect US security interests, and ultimately make US chipmakers less competitive in world markets.
US Chips, Who Needs Em?
China does not want inferior chips. So Trump’s fifteen percent of nothing is nothing.
All Trump has done is encourage China to smuggle more top-end Nvidia chips and produce its own lower-grade chips.
Trade Wars Are Good and Easy to Win
I interrupt this report with a known fact:
In case you may have forgotten, here is a reminder from 2018: Trump Tweets “Trade Wars are Good and Easy to Win”
Other Lessons Not Learned
February 11, 2025: Trump’s Steel Tariffs Now Will Work as Good as the First Time
Q: How’s that? A: Very poorly.
March 13, 2025: The Amazing “Success” of Trump’s 2018 Aluminum Tariffs in One Picture
I hope you can take a bit of headline sarcasm because the true story follows.
September 6, 2025: Trump’s Aluminum Tariffs Seriously Backfire Already
Tariffs did not and will not bring production back to the US.
US Soybean Exports to China Drop to Zero
September 30, 2025: US Soybean Exports to China Drop to Zero, Argentina and Brazil Win
China shuns US soybeans in trade war retaliation.
Perfect Solution
Not to worry because Trump has the perfect solution: On October 10, I commented Trump Hits China With Additional 100 Percent Tariff, Stocks Sinks, Bonds Soar
I am confused. I thought we did this in April and it worked brilliantly.
China should win the Nobel peace prize if it keeps the U.S. from building and providing weapons to the most genocidal, suicidal, demented actors on the worlds stage. By doing so, their supply chains might do so without a shot being able to be fired!
Is this the TACO climb-down I expected? Trump post:
“Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!! President DJT”
China’s is now deploying their long term strategy … grow their military and nuclear arsenal to a protective level and then deny the global economy of crucial materials for competing weapons/transportation/communication/modern industrialization. They would have preferred to do this 5 years in the future. With their recessionary collapsing real estate market, wobbly non-consumption Chinese economy replete with corporate debt at 175% of GDP and dependent on exports to maintain GDP growth and employment – and with the ongoing US tariffs – they have decided to show their long term intent now.
This is the major geopolitical event of the latter half of 2025.
Likely their labor market and industrial enterprise will be significantly redirected to military production.
It seems to be worrying far too few people that our entire economy is propped up by one single company who reported most of their sales were from two customers this year. Because nothing says healthy, not depressed, steady growth like having your entire economy bet on red at the local craps table.
There is no red bet on the craps table, you are thinking of Roulette.
“is just asking for an announcement by China”
I think they already did, I was reading last week about the new Huawei AI chips scaling, where they will deploy hundreds or thousands of lower end Ascend (maybe 50% less computing power than nVidia chips) in clusters. They will use more power than the equivalent nVidia chips in lesser numbers would, but get the computing job done. And since the unit cost per Huawei chip is much lower and electricity is very cheap in China, probably still a lot cheaper overall than deploying NVidia chips in the West. And Chinese AIs like DeepSeek need less powerful chips anyway by design, so I doubt there will be little difference in overall performance.
Electricity cost is the biggest factor in AI now, besides the cost of the chips and setting up the data center .And there China has the overwhelming advantage – I was reading recently about an ex-pat American who has lived in several cities in China, he said his monthly electrical bill ranged from $4 to $12, admittedly for an apartment, but compare that to YOUR electrical bill at home – I just paid $123.00 for a monh (Sept) where I did not use that much power at my detached house, in the winter that can go to $240/month because of added heating load.
I can picture parts of the US being subject to routine blackouts, in order to accommodate data centers.
Like a third world country.
It’s easier to just raise prices to stifle consumption. It accomplishes rationing, and a “market-friendly blackout.” Sort of the function of long lines in the old USSR: just add friction.
I am absolutely appalled, outraged and disgusted that China refuses to sell the USA the rare earths the USA needs to build weapons they will use to attack China with!
How dare China do this! An utterly hostile act of aggression!
There is only one solution – moar sanctions! I say we sanction air in China, they can’t be allowed to have any!
This entire AI bubble and trade war is just asking for an announcement by China of another massive improvement in AI chip technology that antiquates Nvidia’s chips.
In addition the Chinese chips will use far less energy.
If not China, that same announcement should come from over of our chip companies because Moore’s Law is going to do the same thing to giant AI centers that switchgear did to the World Com fiber overcapacity.
As you research the bursting of the internet bubble in 2000 you see the same accounting tricks that took down World Com rearing their ugly heads with “Circular Financing” efforts to prop up todays insane valuations.
Watch the QQQ baby!
China having that chip making capability would be very surprising and is honestly kind of a long shot. They’re going as fast as they can but they’re still fairly behind what the West has access to. However, they’re getting very good at smuggling those chips in and I assume are working around the clock to reverse engineer them. That’s going to require extremely advanced machinery that they don’t currently have though, so it’ll be at least another few years before they catch up.
We do not really know what they (China) have or do not have. Or, what architecture or products they may have for switching to make for great er efficiency. I do believe in the advance of technology and think much of the requirement for 20% increases in national power generation will be solved as chip technology advances.
– Today’s math lesson: 15 percent of nothing is nothing. > This may actually have very little, if anything to do, with Tariffs imo. This may have something to do with those large amount of “Cell Phones” however, that mysteriously were blowing up not all that long ago. Now before you go all conspiracy theory on me, I mean in terms of that sort of technology.
>> We have come extremely far with micro technology, and that can be seamless to the eye upon quick checks for funny, strange or unseen before items in your devices. I think China, who is very aware of this obviously, is taking a longer and herder look at things. Maybe find something they can even copy, or avoid us from finding.
>>> This could play a huge role in certain Electronic Sales from Country to Country depending on the Manufacturers along the way, or not?
Xmas sales suck!
I stopped that crap a long time ago. Need it buy it, for yourself and not for me, I will do the same. A nice get together to enjoy gifts with the under 18 crowd, is always a pleasure! As is a get together with the over 18 crowd for a night out to celebrate perhaps.
Chuck and Hakeem: two useful idiots. They suffers from a brain atrophy. They will have to negotiate with Trump about Obamacare taxes and to reinstate gov workers and pet projects. Trump will pay the military, traffic controllers, Ice and other essential workers on Oct 15. Who can stop him.
Technically the Constitution because his plan to pay them is literally ignoring the document. If he really wants to make this an open dictatorship and see where that takes him he can try it.
Though it should be said it seems more like he legitimately thinks the budget is this big slush fund account he can just shift around funds with.
There is one leg missing there: the Constitution does not enforce itself. Vought at OMB is very clever about interpreting statutes — I think he is a mastermind behind turning everything into an “emergency” or “national security” issue or whatever to invoke exceptions. There is an explicit 1974 law against the president failing to deploy enacted spending, and I’m not sure what the rationale is on that. But regardless, there is a SCOTUS with a giant eraser, ready to take us on its legalistic fantasy trip to a past that never was. All these people are encased in intellectualized textual “realities” that are, let’s say, interesting.
If u eat healthy food 6 days a week, but on day 7 u buy a brownie and a muffin your blood sugar spikes (A1C). The body treats fluctuations (XACO rare earth fluctuation) as an enemy. The immune system is activated: fluctuation -> inflammation -> heart fibrosis -> atrial fibrillation -> panic, without rare earth we die -> no, we don’t.
Call Dr Trump. Give me 20 reds !
China doesn’t want inferior chips. So Trump 15% export tax is nothing. The rest is bs.
China bad.
Merica good.
Thanks for the intell.
/s
Its too bad most journalists and economists look at the symptoms. Here is what is really happening:
Shadow Trilateral: Trump, Putin & QatarSteve Witkoff has been brokering a deal to isolate Europe and make Trump billions.
Jim Stewartson
https://www.mind-war.com/p/shadow-trilateral-trump-putin-and
America is being forcibly separated from our historic allies and thrust into relationships and agreements which have no benefit to Americans, our allies, or global security. They benefit a small group of oligarchs and ideologues alone.
The last time a secret agreement between world powers of this kind took place, it was in 1938 between Molotov and Ribbentrop, the fateful short-term alliance between Nazi Germany and the Soviet Union. The subsequent simultaneous invasion of Poland in 1939 began the worst conflict in world history.
86 years later, just last week, Poland had to scramble jets to intercept Russian drones in their airspace. History is not repeating, it’s being inverted.
Socal Media in Poland was full of people posting pictures of plastic drones and mocking their Goernment, who reacted like panic-stricken teenage girls who had their panties tied up in a knot.
The people in Poland aren’t buying it, no one wants war with Russia, except the neo-con morons like Tusk, who like all Euro political rats likes to talk big and tough, but has no real spine, and would flee in panic at the first sign of a real Russian attack, which won[t be coming unless the West provokes it, which is likely, the neo-cons are desperate now. Be careful what you wish for.
I have family in Poland, this is what they tell me, you are reading neo-con propaganda outlets in the West, and thinking they are giving youj facts.
Good to know it’s the same as everywhere. Corrupt and/or blackmailed politicians/heads of state trying to pull their countries into war against Russia following instructions from Jerusalem and 90% of their population against war which is the only sensible attitude. Getting rid of the cause will be difficult enough, first step is recognizing what is going on and making it transparent who is cashing in on the killing fields
Trump doesn’t have allies. He has business partners, who he may or may not screw over at any time if it suits him or his needs.
My history is spotty, but my first explicit awareness of this sort of thing is of 1914, German Chancellor Bethmann-Hollweg, in speaking to the British Ambassador to Berlin (even as German troops crossed into Belgium), referring to those nations’ treaty purportedly guaranteeing Belgian neutrality as “a scrap of paper.” Some argued the 1919 Treaty of Versailles was coercive, thus questionable. But then June 1941 brought some interesting fireworks in reference to the Molotov-Von Ribbentrop pact. Trust is perhaps the must undervalued thing in the world, at present. The costs of this decay in our time are yet to be fully experienced for most of us.
For what its worth.
In 2nd quarter something like 39 percent of nvdia revenue came from to customers.
Ah the Republican Party of limited government, laissez-faire economics, low taxes and free trade. Glad we can dispense with that bullshit once and for all.
There is no party of limited government, free market, and low taxes. There is only the Uniparty, of which the junior marketing department (Republicans) tolerate a a small handful of people who are for those things or say they are.
No longer the junior partner…
Maybe you are right, Jon. But they are still spending & borrowing at the Biden level, still fighting wars in the other hemisphere in line with the neocon Dems, still keeping all the CIA’s secrets, and definitely being as unfriendly to free markets as any Dem.
Without Chinese rare earth, the West can not survive. Shortages of everything will soon pop up all over the West, forcing us to switch to Chinese products to survive.
That; I fear, is the narrowing, darkening corridor we have been escorted into by the blunderings of Mister ‘Art of the Deal’.
Trump meme coin update:
Looks like the bottom fell out within the last 24 hrs. It plunged from $7.14 to $4.65 before recovering a bit.
Meanwhile, $Melania meme coin hit a record low today of $0.1069. It’s a miracle it’s still above zero.
Real value of a Trump meme coin = $0.00
The Melania coin is on its way to true price dsicovery point – nothing.
Trump and his family are such blatant scammers it’s just embarassing to the USA. If you want to do garbage stunts like the meme coins, at least have the dignity to wait until you leave public office. But they are so greedy they just couldn’t wait.
Let’s apply the same logic MISH previously posted about tariffs and free trade regarding the US, but to China.
It makes no economic sense for China to boycott and reinvent chips that Nvidia designed and manufactured. Certainly Chinese customers should have the best processor at the lowest price right now.
China is no more right or wrong than what Trump is doing. Both are making statements that national security now has a higher value than consumerism. China wants to buy Taiwan through building its military with profits from manufacturing and selling good to the West. Trump wants to stop China because paying now will be less than paying later.
The economic problem/focus is no longer about consumerism.
…It makes no economic sense for China to boycott and reinvent chips that Nvidia designed and manufactured. Certainly Chinese customers should have the best processor at the lowest price right now….
A sovereign nation makes the decision to not depend on their primary rival for a product?
Well…In September, Chinese state media said a new chip announced by Alibaba can match the performance of Nvidia’s H20 semiconductors while using less energy. H20s are scaled-down processors made for the Chinese market under US export rules….
Say you want to shake the chain held by your rival?
Who’s doing that better now– US or China ? If China is on the path to chips better than what the US allows to be shipped, why wouldn’t it make both economic and strategic sense.
Does it make sense to rely on rare earths from China for what you think will save you if China attacks?
What percentage of our current military hardware that required rare earth elements to be built was manufactured with rare elements we purchased from China? Sounds like almost all of it.
78% of US military weapon systems vulnerable to China’s critical mineral dominance
https://theoregongroup.com/commodities/rare-earths/78-of-us-military-weapon-systems-potentially-vulnerable-to-china-critical-mineral-dominance/
Somewhere between 44% overall, and up to 78% or more, maybe 100% for some rare earths, depending on who you read.
Jo Tzu – “Always go to war with your biggest supplier, before you arrange alternate supply, and victory will be yours!”
“A sovereign nation makes the decision to not depend on their primary rival for a product?”
I whole heartedly agree with the above statement. I just wanted to point out that a perfectly good economic argument for the individual is not necessarily strong at the national level. Different people / groups have different needs and wants, so their values will conflict with each other.
Trump is speeding up China, as was Biden.
The consumer is being re-priced to rug-pull value zero. At least, once the remaining liquid value has been efficiently extracted. It is post-USSR redux.
The US economy will slowly decline. Everything needs to be decided by one man. No one will want to risk significant sums in development because the product, process, manufacturing, or distribution won’t be to his liking. There will be no law or precedent that can’t be broken increasing uncertainty.
Arbitrary and capricious personalized concentrated rule — EXACTLY the problem the Founders successfully addressed, and their biggest concern. Not coincidentally the thinker of the moment was Adam Smith. I turn pale when this occurs to me, and it is happening so intensely and quickly.
Trump announces 100% tariff on China imports. 100% of nothing is also nothing.
This is really grim when you factor in that we now absolutely have to hold onto Taiwan or face China basically having us under their thumb. China continues to work towards domestic chip manufacturing at an alarming rate while we’re stuck with all our big facilities on the island they happen to really want back. Sure some progress has been made to bring it here, but Taiwan has pretty much thrown a wrench in that to ensure we keep protecting them.
Making it to where China can’t share at least a little in this just incentivizes them to get more serious about taking Taiwan.
Creamer’s just saying what Americans are raised to think: America owns the planet and just allows some other countries to run portions of it.
the amerikan moron psyche. no wonder our folks have voted for nonstop world wide warfare for many decades. crumbling empire 101. will be great for human primates when amerika retreats from her department of war bases around the globe. not if. just when.
Nice imagination! What else did I say that’s not in that post?
Really though, Taiwan is an ally and de-facto protectorate of ours. America doesn’t own the planet and never has, every single offensive war we’ve ever fought has been a steaming disaster. However, we historically come out hard for our allies, especially those we need around financially. Taiwan is not a part of China, as much as they wish it was, and taking it would mean having all of the chip making machinery destroyed and expertise scattered unless China cuts a very good deal.
We have defended Taiwan military several times now in what is now called the Taiwan straights crisis(es). This is actually where the sidewinder air to air missile first saw use to great effect on Chinese MIGs. Even in our weakened state, it would be very hard for China to take Taiwan by force at the moment. Obviously China is hoping it doesn’t stay that way so they can have all the chips and basically own us outright.
In this way chips are absolutely a national security affair because our military and computers in general don’t work without them and we can’t really build new chip factories anywhere else at the moment. It’s going to take a decade plus to shift away from Taiwan unless we get a hurculean government led effort that’s clearly not happening now.
Also, which are those facilities of “ours”?
Let’s think together Augustine. What company has the biggest market cap in the world right now? What company has more market cap than all of big pharma combined at 4.5 trillion? What company is singlehandedly propping up OUR economy with their chips?
I’ll give you time to think about this.
The answer is Nividia, but the same applies to AMD and Intel. Nowhere else in the world currently comes close to the facilities, machinery, and expertise that exists for chipmaking in Taiwan.
Shocker: nations have serious interests abroad.
Are you going to go all nice and courteous? Look how well that worked for the UK: a few townhouses with armies of servants for eastern oligarchs, amidst a growing sea of ghettos.
Trump will sell Taiwan for a publicly announced break in the rare earth blockade, whether true or not. That will be just fine with his billionaire buddies who are not so keen on American democracy anymore, especially if the tidal wave of the lower income tier unhappiness materializes
Never a better time for China to take down the US
a leader that is only sometimes in contact with reality
close staff that never contradicts
a supine Congress and court
a military at the beginning of a purge
deeply unpopular internal policy positions
former allies alienated
The key to controlling Trump is “make him look good”. Putin plays him. Just watch Xi. He’s learned
Taiwan will soon become irrelevant, as far as chips go, a couple more years China will be manufacturing all their own chips within China, and they won’t need anything Taiwan produces. The West will though, since they can’t make the chips thmeselves here in enough numbers.
By the way, since chip manufacturing requires large volumes of water, can someone explain why America seems to want to build new chip plants in Arizona, where there is little water in the desert – logic much?
Waiting for taco to do his typical capitulation on China so his buddies can achieve a significant equity market gain on the announcement.
I don’t think Trump understands that doing the same trick over and over means people start to anticipate the moves. China was playing ball with us prior, but this and the rare earths move suggests that they’re past the point of trying to reconcile. My money would be that China is going to get a lot more aggressive now that they realize they can hurt us far worse than we can hurt them back.
All’s fair in war and love, as they say.
For some reason America continually talks about the “war against China”.
China aggressive? No, they are mirroring American actions in a somewhat weakened form.
There are such things as war crimes and abusive relationships.
China is honestly far friendlier than anyone in the West wants to acknowledge. They don’t really want what we have, they just want to be legitimized while continuing to have a friendly rivalry. That’s why even now they just want to go back to the status quo. It worked for everyone and there was no need to change it.
NM
We are going to lose any trade battle with China. They have long term plans set up and we change ours every 4 years.
China has been aggressive for 20 years and winning. We have a huge trade deficit with China. That is the benchmark of who is winning.
We change ours quarterly to meet the needs of Wall Street.
Your oligarchs — who shipped industry to China in order to pay you less — are winning. And every time they fearmonger successfully about foreigners, these oligarchs win some more.
Stop posting facts, they are irrelevant to the narrative:
“China/Russia BAD, USA Good!” – that’s all you need to remember.