US administration targets Chinese AI expansion and weighs semiconductor tariffs

The Trump administration is pursuing dual strategies to secure American dominance in artificial intelligence while managing the economic impacts of its trade policies. To counter Chinese expansion, the administration is reportedly building a coalition of American companies, including Nvidia, AMD, and Microsoft, to compete with Huawei. Huawei has actively pitched AI infrastructure and chips to governments in Egypt and Kenya for use in public sectors such as military, surveillance, healthcare, and education.

Simultaneously, the administration faces a policy tension between its goal of winning the AI race and its commitment to imposing sweeping tariffs. Discussions are underway regarding potential tariffs on semiconductors, which could impact the flow of foreign-made chips and the domestic products that rely on them, such as data centers and consumer electronics. This move faces opposition from Silicon Valley, as the AI infrastructure buildout remains heavily dependent on Asian suppliers, most notably TSMC, which holds a 73% share of the global semiconductor foundry market.