President Donald Trump negotiated a deal with Nvidia and AMD, agreeing to a 15% cut of Nvidia’s chip sales for export licenses to China. The Cyberspace Administration of China raised concerns about security risks with the H20 chips. Legal experts question the deal’s constitutionality due to the export tax. Treasury Secretary Bessent sees the deal as a model for other industries. Business leaders warn of the arrangement’s impact on other companies. Nvidia and AMD have not commented on the specifics of the deal.

The deal is unprecedented in U.S. history, with no prior examples of taxing export revenue. Previous government interventions involved temporary nationalization or bailouts. Most countries tax profits, not export revenue. Legal scholars highlight the U.S. prohibition on export taxes since the nation’s founding. The deal structure has parallels to organized crime’s protection rackets.

Experts question the legality of the chip export tax and who can challenge it. The unique deal raises concerns about its impact on future business-government relationships. The story was originally featured on Fortune.com.

Read more at Yahoo Finance: Trump’s unprecedented, potentially unconstitutional deal with Nvidia and AMD, explained: Alexander Hamilton would approve