On Monday, President Donald Trump granted American chipmakers Nvidia and Advanced Micro Devices (AMD) export licenses for their scaled-down graphics processing units (GPUs) in exchange for 15 percent of the companies' revenue from Chinese sales. The truly unprecedented deal could be a prototype for the Trump administration moving forward.
On Wednesday, Treasury Secretary Scott Bessent said that the deal is "the model and the beta test" and that he "could see it in other industries over time." Agreements like the one between Trump and the chipmakers appear to be a constitutionally prohibited export tax and reek of "bribery or blackmail, or both," according to a former export control official. But they may technically pass legal scrutiny, paving the way for more such deals, as Bessent alluded to.
Barron's reports that the Bureau of Industry and Security (BIS), an executive branch agency of the Commerce Department that is responsible for granting export licenses, is "forbidden by statute from charging a fee in consideration for an export license." This prohibition comes as no surprise; the Constitution demands that "No Tax or Duty shall be laid on Articles exported from any State." Based on this, Trump's conditioning BIS approval for these companies on a share of their Chinese sales revenue appears straightforwardly unconstitutional.
