Washington, DC – The Trump administration is escalating pressure on American technology giants, demanding they channel billions of dollars into US manufacturing in a bid to counter China’s growing influence in the tech sector. Critics are calling the move “economic blackmail” or even “extortion,” arguing it blurs the line between trade policy and revenue extraction.
Apple has been one of the first to yield under pressure. Facing tariffs that could cost the company $1.1 billion, Apple has pledged $100 billion in new investments for US-based semiconductor production, building a full domestic supply chain and sourcing rare earth minerals locally. The company is also ramping up assembly in India to diversify away from China.
Other major players are making similar commitments. Micron has promised $150 billion in US chip production, while Texas Instruments is pledging $60 billion. Meanwhile, Intel has faced a more dramatic confrontation. President Trump has publicly demanded the resignation of Intel’s CEO over alleged ties to China. Intel has delayed its planned Ohio factory and scrapped expansion plans in Europe. In exchange for $10.86 billion in federal grants, the White House is pushing for a 10% US government stake in Intel and is in talks with TSMC over a joint venture. TSMC’s planned $300 billion Arizona megafactory is already stirring geopolitical rivalry with Taiwan.
The administration has also turned to AI chip leaders Nvidia and AMD, forcing both to agree to pay 15% of their China export revenue directly to the US Treasury. Nvidia has committed to assembling its supercomputers exclusively in the United States. With China sales representing $17 billion (13% of total revenue) for Nvidia and $6.2 billion (24%) for AMD, the deal could reshape their global business. Nvidia has already lost $5.5 billion from earlier export bans and risks losing another $14–18 billion if restrictions tighten. Trump has promised to allow exports of “downgraded” chips, 30–50% weaker than advanced models, and assured companies they will not face 100% tariffs if production stays in the US.
The White House’s aggressive approach is raising alarms across Washington. Critics say the administration is turning export licenses into a “pay-to-play” system that monetizes trade restrictions. Bloomberg has described the practice as legally dubious, estimating it could generate over $2 billion in revenue in 2025 alone. Prominent Democrats, including Senators Chuck Schumer and Elizabeth Warren, have urged scrapping the deals.
Beyond semiconductors, the administration is expanding its reach into other sectors. The Pentagon recently purchased $400 million in shares of MP Materials, a rare earth mining firm, while the Treasury has hinted at a “golden share” approach in the US Steel takeover. Officials have also suggested similar measures could be extended into other industries deemed strategically vital.
But the policy carries significant risks. Analysts warn that fragmenting supply chains could raise costs for global tech firms. AI infrastructure costs alone could increase by $75–100 billion over the next five years. Tech giants like Google and Amazon are already planning to spend more than $350 billion on AI data centers in 2025, and tariffs could drive up server prices by as much as 75%.
China, meanwhile, has begun to retaliate. Beijing has banned the use of Nvidia chips in government operations and is accelerating investment in domestic alternatives. Observers warn that Trump’s strategy to revive American chip dominance could backfire, hardening China’s resolve to cut dependence on US technology and further fragmenting the global market.
What Trump hails as an “America First tech revival” may in fact amount to what critics call “clan capitalism”—a system where government policy pressures private companies into financing political and economic objectives. Whether this strengthens US industry or undermines free-market credibility remains a central question as the world’s two largest economies edge closer to a high-tech cold war.
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