President Donald Trump’s sweeping global tariffs have rattled markets and sent the stocks of several major corporations tumbling. Yet one tech giant—Nvidia—appears to be largely sidestepping the economic fallout, thanks to a strategic manufacturing choice.
At the same time, on Wednesday Trump authorized a 90-day pause as part of his tariff plan but said he was also raising the tariff rate for China to 125%, effective immediately.
According to an analysis by Stacy Rasgon, a senior semiconductor analyst at Bernstein Private Wealth Management, roughly 60% of Nvidia’s DGX and HGX AI servers sold to data centers may be exempt from the new U.S. tariffs. The reason: these servers are manufactured in Mexico.
In a client memo cited by Tom's Hardware, Rasgon addressed investor concerns over Nvidia’s vulnerability, noting that, while most semiconductors have been granted tariff exemptions, server hardware has not. “Our analysis indicates that the majority of Nvidia’s AI server shipments to the U.S. likely originate from Mexico,” Rasgon wrote.
Nvidia’s own export compliance documentation supports that view. It lists DGX and HGX servers as tariff-exempt under the United States-Mexico-Canada Agreement (USMCA), signed during Trump’s first term, which classifies automated and digital processing units as duty-free.
U.S. import data for 2024 shows that server imports totaled around $73 billion, with approximately 60% coming from Mexico and 30% from Taiwan, according to the Department of Commerce.
In parallel, Taiwanese electronics giant Foxconn recently announced an expansion of its manufacturing operations in Mexico, including a new facility in Chihuahua dedicated to building Nvidia server hardware.
While the outlook for Nvidia’s AI server imports remains favorable, average American consumers are unlikely to escape the impact of the new tariffs. U.S.-based PC integrators, particularly boutique brands, are expected to raise prices by at least 20% as tariffs drive up costs across a wide range of consumer computing components.
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Despite ongoing pressure on Nvidia’s stock—which had declined for several months after Trump returned to the White House—CEO Jensen Huang expressed confidence at the company’s annual GTC event last month. “In the near term, the impact of tariffs will be minimal,” he said. Indeed, Nvidia’s stock has rebounded in recent days, validating Huang’s cautious optimism.
For now, Nvidia appears to have found a viable path to avoid U.S. tariffs on a significant portion of its AI server lineup by leveraging production in Mexico. That may mean continued affordability for users of AI services like ChatGPT—but higher hardware prices for consumers likely lie ahead.