The tariff situation in the GPU market has been drawing concerns from investors and consumers alike. Not only have Nvidia’s latest RTX 50 series GPUs been hit, but its server hardware is also facing challenges. The increase in the tariff on electronic goods from China, from 10% to 20%, has raised further worries. However, Nvidia’s optimism about the situation, despite its recent stock taking a big tumble, suggests there may be more to the story.

Stacy Rasgon, writing for Bernstein Private Wealth Management and one of the market’s top chip analysts, reported that around 60% of Nvidia’s DGX and HGX AI datacenter servers may avoid recent U.S. tariffs, thanks to their production in Mexico. Rasgon wrote, “Analysis suggests the majority of [Nvidia’s] U.S. AI server shipments likely come from Mexico.” This is due to the USMCA trade agreement between the U.S., Canada, and Mexico, which exempts digital and automatic data processing units from new tariffs.

Nvidia CEO Jensen Huang doesn't think tariffs will be meaningful

Now, this 60% estimate isn’t exact. Data for all server imports entering the United States in 2024 shows $73 billion in imports, with around 60% coming from Mexico and 30% from Taiwan. The data doesn’t explicitly state that the entire 60% is Nvidia’s, but given Nvidia’s market dominance, it could likely be the case.

For the green team, though, this doesn’t seem like a new development. Nvidia’s CEO, Jensen Huang, has previously claimed, “In the near term, the impact of tariffs will not be meaningful,” adding that even a tariff rise to 25% won’t affect their plans for U.S.-based production.

While Nvidia’s consumer-grade GPUs are also protected from tariffs under the USMCA, it’s unlikely that Nvidia’s consumer supply chain flows through Mexico as much as its server hardware does. Despite Nvidia’s optimism about its AI server hardware, the average gamer and tech enthusiast will face the impact of new tariffs imposed by the U.S. government, expected to raise prices on nearly all consumer PC components by at least 20%. The recent news of delayed Nintendo Switch 2 pre-orders has been one telltale sign of what’s to come.

About the Author

Hassam Nasir

Hassam boasts over seven years of professional experience as a dedicated PC hardware reviewer and writer.