China Blocks Nvidia H200 Chips Despite US Approval

Published: 17 January 2026. The English Chronicle Desk. The English Chronicle Online

China has effectively blocked imports of Nvidia’s powerful H200 artificial intelligence chips, despite the processors having recently received clearance from the US government for export, according to reports that have deepened confusion over the rapidly escalating technology dispute between Washington and Beijing. The move has prompted parts suppliers linked to Nvidia’s supply chain to pause production, underlining the uncertainty now surrounding one of the most commercially and strategically sensitive products in the global semiconductor market.

According to a report first published by the Financial Times, citing two people familiar with the matter, Chinese customs authorities have prevented shipments of the H200 chips from entering the country. Reuters said it was unable to independently verify the report, while Nvidia did not respond to requests for comment outside normal business hours. Nevertheless, multiple sources with knowledge of the situation have described mounting disruption across Nvidia’s supplier network as firms attempt to interpret conflicting signals from both governments.

Nvidia had reportedly anticipated orders exceeding one million units from Chinese customers, a figure that reflects the enormous demand for high-end AI processors among China’s technology companies, cloud service providers and research institutions. In preparation, suppliers had been running production lines around the clock, aiming to begin shipping as early as March. That momentum has now stalled, with some parts manufacturers placing production on hold until there is greater clarity on whether the restrictions represent a temporary administrative measure or a formal ban.

This week, Chinese customs officials informed local agents that Nvidia’s H200 chips were not permitted to enter the country, according to people briefed on the guidance. At the same time, government officials reportedly summoned domestic technology firms and warned them against purchasing the chips unless absolutely necessary. The officials did not offer a public explanation for the move, nor did they clarify whether it formed part of a broader policy shift or was linked to ongoing trade and security negotiations with Washington.

The lack of transparency has fuelled speculation about Beijing’s intentions. The H200 is Nvidia’s second most powerful AI processor and sits at the heart of global debates over technological dominance, military capability and economic leverage. Some analysts believe China may be considering an outright ban as a way to accelerate the development of domestic alternatives and reduce reliance on US-designed technology. Others argue the move could be provisional, giving Beijing room to adjust its position depending on how broader talks with the Trump administration evolve.

If confirmed, the import block would add yet another layer of complexity to an already convoluted policy landscape. Earlier this year, the Trump administration signalled that it would allow the export of the H200 to China, despite objections from national security hawks in Washington. The chips are designed in the US but manufactured in Taiwan, and the approval reportedly included provisions allowing the US government to take a share of the profits from sales to Chinese customers.

That approval, however, came with a significant condition. Instead of being shipped directly from Taiwan to China, the completed chips were required to pass through a US laboratory for testing. By routing the chips through the US, the administration imposed a 25% tariff on their sale, citing national security grounds. The same tariff was applied to AMD’s competing MI325X AI processor, signalling that the policy was not limited to Nvidia alone but formed part of a broader effort to monetise and control the flow of advanced semiconductors.

For Chinese firms, the result has been a confusing mix of permission and restriction. On paper, the chips are legal to purchase; in practice, customs authorities appear unwilling to allow them into the country. For Nvidia and its suppliers, the uncertainty threatens to disrupt revenue projections and production schedules at a time when demand for AI hardware is surging globally.

Experts remain sharply divided over whether allowing sales of the H200 to China serves US strategic interests. Supporters of the policy argue that continued access to Nvidia’s most advanced chips could slow China’s progress in developing indigenous alternatives, keeping its tech sector dependent on US intellectual property and design expertise. From this perspective, controlled exports are seen as a way to maintain leverage while generating substantial profits for American companies and, indirectly, the US government.

Critics, however, warn that the H200 is powerful enough to be repurposed for military and surveillance applications. They argue that advanced AI processors could one day underpin weapons systems, intelligence analysis and autonomous platforms deployed by China’s military against US allies. From this standpoint, even heavily conditioned exports represent an unacceptable risk, particularly at a time when trust between the two powers is at a low ebb.

Beijing’s silence on the precise rationale for the customs block has only heightened tensions. By neither confirming nor denying a formal ban, Chinese authorities retain flexibility while sending a clear signal that access to advanced US technology cannot be taken for granted. Some observers believe the move may be intended as a bargaining chip, giving China leverage in negotiations over tariffs, export controls and broader economic relations with Washington.

For Nvidia, the episode underscores the fragility of operating at the centre of a geopolitical struggle. The company has already redesigned products in recent years to comply with shifting US export rules, only to see those rules tightened again. The H200 was widely viewed as a compromise chip that balanced performance with regulatory limits. Its apparent rejection by Chinese customs raises questions about whether any such compromise remains viable.

The wider implications extend well beyond a single product. The semiconductor industry is increasingly shaped by national security considerations, with supply chains rerouted and investment decisions driven as much by politics as by market logic. For suppliers now idling production lines, the immediate concern is financial. For governments, the stakes are strategic, touching on technological leadership, economic resilience and military power.

As things stand, neither Nvidia nor Chinese authorities have provided definitive answers. Whether the H200 chips will eventually be allowed into China, or whether the pause marks the beginning of a more decisive decoupling, remains unclear. What is certain is that the episode highlights the growing instability at the intersection of technology and geopolitics, where even officially approved products can become collateral in a broader struggle for influence and control.