The "China Tax" Is Here — And It’s Bigger Than Chips

A business headache born out of geopolitics

Aug 13, 2025

∙ Paid

In the 17th century, a company was formed that would change the world. To enter vital markets, with the most coveted resources of the time, it did something quite common during that period: it paid governments for access to markets, ports, and trade routes.

The company was the infamous British East India Company (EIC), established to expand the dominion of the British Empire in Asia, take on European rivals, and gain control over the lucrative spice trade.

After five centuries of slumber, this business practice has returned with a bang.

As US-China trade talks slow down, Washington has announced that Nvidia and AMD will pay the US government 15% of their sales in China, a tax (or tribute), to continue accessing China’s market. Initially, US President Donald Trump wanted 20% but it was negotiated down. The White House has said the 15% levy could soon be expanded to other US chip companies.

I call this the “China Tax” — a new cost that US companies must pay to sell certain goods to China, born out of Washington’s geopolitical strategy