The U.S. government's 15% revenue-sharing agreement with Nvidia and AMD on chip sales to China resembles a "beta test" that may extend to other industries. U.S. Treasury Secretary Scott Bessent indicated this could affect broader market dynamics. However, the agreement raises constitutional concerns under Article 1, Section 9, known as the export clause, which prohibits taxes on exported articles. Past Supreme Court cases have favored businesses against export taxes, but the current court may interpret the clause differently, especially concerning Executive power amid shifting export control policies.
The U.S. government's unprecedented 15% revenue-sharing agreement with Nvidia and AMD on Chinese chip sales could be coming to a company near you. U.S. Treasury Secretary Scott Bessent called it a "beta test" in a Bloomberg TV interview yesterday, adding, "we could see it in other industries over time."
If, as Bessent argues, the White House chips deal passes muster because there are no national security concerns that necessitate export controls on these particular products, another issue remains: Article 1, Section 9, of the U.S. Constitution, otherwise known as "the export clause," states plainly that "No Tax or Duty shall be laid on Articles exported from any State."
When efforts to impose excise taxes have gone before the Supreme Court in the past, such as the United States v. IBM or the United States v. United States Shoe Corp., the Court ruled in favor of business. In both instances, the Supreme Court cited the export clause as grounds to bar the government from collecting money on goods destined for sale abroad.
Today's court could take a different stance, especially when it comes to the power of the Executive branch.
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