Trump’s chip deal signals a new ‘pay-to-play’ China trade policy, analysts say
US’ ‘unprecedented’ move to take a 15 per cent cut of some chip sales to China creates new risks and conflicts of interest, analysts warn
US President Donald Trump’s “unprecedented” deal to allow exports of some advanced chips to China in exchange for a cut of the revenues – and hints that similar deals for other industries are being considered – signals that Washington is moving towards a potentially dangerous “pay to play” foreign trade policy, analysts said.
Conflicts of interest loom if the revenue-sharing model takes root, which could make it harder for American investors and exporters to do business in the world’s second-largest economy, they added.
US Treasury Secretary Scott Bessent on Wednesday said the export revenue-sharing deal could serve as a blueprint for other industries. In a TV interview with Bloomberg Surveillance, Bessent praised the arrangement as a “unique solution” from Trump.
“I think we could see it in other industries over time,” Bessent said in the interview. “Right now, this is unique, but now that we have the model and the beta test, why not expand it?”
Analysts said AMD and Nvidia could comfortably share revenue because their deals covered older-model artificial intelligence accelerators that they had custom-made for the Chinese market. But other companies might face far greater problems if the US government asks them for a cut of the sales from their mainstream products.