Trump's Unconstitutional Demand to Chipmakers to Fork Over Profits to Uncle Sam in Exchange for an Export License

Aug 11, 2025

After intimidating Intel into selling the government a significant ownership share, Donald Trump went on to shake down two other chipmakers for illegal kickbacks on their sales to China, further extending his style of gangster government in the U.S. economy.

The Washington Post has the details:

U.S.-based chipmakers Nvidia and Advanced Micro Devices have agreed to pay the United States 15 percent of their revenue from sales of artificial intelligence chips in China, a highly unusual arrangement that some experts warn may be unconstitutional.
Under the financial agreement, the companies will give the U.S. government a portion of their sales as a prerequisite to obtaining export licenses for China, according to three people familiar with the matter who spoke on the condition of anonymity because they were not authorized to discuss the matter in public. …
In a White House news conference on Monday, he said he had had a conversation with Nvidia CEO Jensen Huang, whom he called “a great guy,” about allowing the chip’s export. “I said, if I’m going to do that, I want you to pay us as a country something because I’m giving you a release.”
The latest deal quickly drew criticism from some scholars who said it may violate the Constitution’s prohibition on taxes on exports. …
“Export controls are in place to protect national security, not raise revenue for the government,” [Christopher] Padilla said. “This arrangement seems like bribery or blackmail, or both.’’

The U.S. Constitution gives Congress the power to set taxes on imports—and expressly forbids taxes on exports (Article I, Section 9, Clause 5). Yet Trump has just imposed a de facto tax, on no authority at all and with no accountability about how the money is to be used.

The Executive Watch is a project of the Institute for the Study of Modern Authoritarianism, and its flagship publication The UnPopulist, to track in an ongoing way the abuses of the power of the American presidency. It sorts these abuses into five categories: Personal Grift, Political Corruption, Presidential Retribution, Power Consolidation, and Policy Illegality. Click the category of interest to get an overview of all the abuses under it.

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