US Allows Nvidia H200 Sales to China With a 25% Cut, but Shipments Stay Trivial as Beijing Blocks Imports

In January 2026 the Commerce Department’s Bureau of Industry and Security changed its rules to allow exports of Nvidia’s H200 chip, and similar parts, to approved customers in China. The rule took effect on 15 January. In return the US government takes 25% of the sale value, collected through a duty when chips pass through the US for checks before export.

Eight months later, very little has shipped. Nvidia confirmed its first H200 deliveries to Chinese customers on 27 August, and said China revenue remained under 1% of its data-centre sales. Its guidance for the current quarter assumes no China data-centre revenue at all.

How the rule works

The rule replaced a case-by-case denial with a licensing regime for chips below a performance threshold. Each licensed chip must stay under a total processing performance cap of about 21,000. And total shipments of such chips to China can’t exceed half of what the same company ships to US customers, measured in processing power. Exporters must certify that the chips won’t go to military users or to entities on US restricted lists.

The 25% payment is unusual. Export controls have traditionally been about security, not revenue. Critics in Congress, from both parties, said the arrangement looked like the government selling export licences. The administration said it ensured the US benefits from sales that would otherwise go to competitors.

Why sales stalled

The main obstacle is in Beijing. Chinese customs authorities told companies to stop H200 imports, and Chinese regulators urged buyers to favour domestic chips from Huawei and others. Licences worth about $10 billion were approved on the US side, according to industry reports, but most weren’t used.

In July, Under Secretary of Commerce Jeffrey Kessler told Congress that shipments under the rule had been “trivial.”

Enforcement and Congress

Smuggling remains the bigger concern for lawmakers. In 2025 and 2026 the Justice Department brought cases over diverted servers, including a case involving Supermicro hardware routed through third countries. BIS has asked for $450 million for fiscal 2027, an increase, to hire more export enforcement agents. Like the rest of the government, it runs on the stopgap until 11 December.

The Chip Security Act, which would require location verification for advanced chips sold abroad, has bipartisan support in both chambers but hasn’t passed. Its sponsors argue that without tracking, caps and licence conditions can’t be enforced once chips leave the country.

What it shows

The H200 rule tested a theory: that selling China slightly older chips keeps it dependent on US technology and slows its domestic industry. China’s response, blocking imports to protect its own chipmakers, has so far left the US with neither much revenue nor much leverage. The next test is whether Commerce tightens or loosens the caps when it reviews the rule.