Trump Lets Nvidia Sell More Chips to China

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Luke Vargas (0:33)

A win for Nvidia as President Trump OKs the sale of its high-performance chips to China. Plus the bellwether stakes of Miami's mayoral race.

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Even though the candidates have sought to focus on local issues like housing, taxes and transportation, all these national political forces have helped turn the race into a referendum on the parties and on Trump himself.

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And Ford turns to France's Renault to upshift its embattled European business. It's Tuesday, December 9th. I'm Luke Vargas for the Wall Street Journal. And here is the AM Edition of What's News. The top headlines and business stories moving your world today.

Shares of Nvidia have jumped off hours after President Trump said he'd let the company export its H200 chips to China in an apparent easing of stringent export controls. Journal Asia Business Editor Peter Landers says the move is a boon for Nvidia, which has fought for months to maintain access to the world's second largest economy.

Peter Landers (1:40)

This is going to be another source of demand for Nvidia. Probably billions of dollars of chip sales can be made to China if this is ultimately approved. At its peak, China was about 20 percent of Nvidia's sales. It's been a lot less than that in recent years because of US export controls. So there's still a huge company extremely profitable without China, but certainly the China market as CEO Jensen Huang has said, is an important addition to whatever they're selling elsewhere. These chips are believed to be quite a bit ahead of anything that the Chinese chip makers can produce. And so Nvidia's products would be welcome in China, even though they're not as advanced as the Nvidia chips that some US customers can get their hands on.

Luke Vargas (2:24)

Curiously, Trump said the US would receive a 25% cut of Nvidia's chip sales in China without offering any details on how. And as Peter explains, taxing exports in that way might not be entirely legal.

Peter Landers (2:37)

The Constitution actually says that the US cannot impose a tax on exports, but probably there's no one out there who could legally challenge it. Nvidia is apparently willing to pay this 25% charge. Their profit margin is much greater than that, but it is an extremely unusual arrangement for the US government to take a cut of sales of a US product that go overseas.

Luke Vargas (3:02)

Meanwhile, Chinese competition has been a growing headache for European carmakers, but now two major players are teaming up to try and push back. Ford is engaging France's Renault to make a pair of small EVs and maybe a van down the line to bolster its European lineup. Ford's accounted for just over 3% of new passenger cars sold on the continent this year, down from over 7% a decade ago.

Let's keep the focus on China as the country has hit a major trade milestone, achieving a $1 trillion trade surplus in goods. That is, in spite of US tariffs meant to dent Chinese exports, and which have instead seen products redirected elsewhere, including to Europe, where a pair of leaders are now sounding the alarm and hinting new restrictive measures of their own. Joining us from Beijing is our China Bureau Chief, Jonathan Cheng. And from Berlin, we've got global economics correspondent Tom Fairless with us as well. John, let me start with you. Talk to us about this trillion-dollar goods surplus figure. What does it represent?

Jonathan Cheng (4:11)

Obviously, what it means is that they're selling far more to the world than they are buying from the world to the tune of a trillion dollars this year. This is obviously not something that is necessarily looked upon as a good thing in other countries, particularly in the White House, where President Trump has long had a problem with deficits, especially with China. But this is not just the US-China thing. This is a Europe thing. This is a whole world thing. This is China just making a lot more and selling a lot more to the world than they're buying.

Luke Vargas (4:40)

Yeah. And it would seem putting a target on its back in the process. And we should note that this trillion-dollar figure is actually probably going to be higher when 2025 is all said and done because it just covers the first 11 months of the year. Tom, let's look at Europe, the EU, among the places where Chinese shipments have been increasing quite dramatically this year. They're up 15%. That has evidently attracted the attention of leaders in France and Germany who've been making some big comments in recent days.