Sánchez, Ways and Means colleagues to Trump: Reverse export tax, national security not for sale

WASHINGTON – Trade Subcommittee Ranking Member Linda T. Sánchez (D-Calif.) and 14 of her Democratic Ways and Means colleagues today called on President Trump to reverse a decision requiring a 15 percent cut of sales revenue from advanced semiconductor chip sales to China in exchange for export licenses.

In recent years, the United States has tightened export restrictions on advanced semiconductor chips to China due to national security concerns. In April, the Trump administration announced it would expand those restrictions by requiring export licenses for certain chips, including NVIDIA’s H20, AMD’s MI308 and other equivalent models. However, the administration later admitted that these licenses were being used as leverage in trade negotiations with China, granting them in exchange for a share of the sales revenue.

“The decision to treat congressionally authorized national security export restrictions as a bargaining chip to be traded away seriously undermines the credibility of the U.S. export control regime, as pointed out recently by congressional colleagues,” the members wrote. “Now, however, we learn that your administration is not just trading away our security interests as part of a bargain with the Chinese, but that you actually intend to take a cut of those proceeds.”

The members continued, “Aside from the apparent illegality of the ‘revenue sharing’ arrangement, the notion of charging U.S. companies to export establishes a dangerous precedent that both threatens America’s national security and opens the door to rampant corruption.”

In addition to Ranking Member Sánchez, the letter was signed by Representatives 

Lloyd Doggett (D-Texas), Mike Thompson (D-Calif.), John Larson (D-Conn.), Danny Davis (D-Ill.), Terri Sewell (D-Ala.), Suzan DelBene (D-Wash.), Judy Chu (D-Calif.), Gwen Moore (D-Wis.), Brendan Boyle (D-Pa.), Don Beyer (D-Va.), Dwight Evans (D-Pa.), Brad Schneider (D-Ill.), Jimmy Panetta (D-Calif.), and Jimmy Gomez (D-Calif.). 

Full text of the letter is available here and follows:

September 11, 2025

The Honorable Donald J. Trump
President of the United States of America
The White House
Washington, DC 20520

Dear President Trump:

 We write to express our profound concern with the arrangement you have reported in which you plan to take a 15% cut of the sales revenue of certain advanced semiconductor chips sales in China in exchange for issuing the export licenses that permit those sales. We urge you to reconsider this approach, which we view as unlawful, an egregious abuse of national security protections, and a dangerous precedent that may irretrievably damage America’s security and economic interests. We request an immediate briefing by senior members of your administration to explain the details of the arrangement that you negotiated, including an explanation of the legal and constitutional basis for taxing the exports of American firms. 

In response to legitimate national security fears, U.S. administrations of both parties have carefully tightened export restrictions on the sale of advanced semiconductor chips to China in recent years. Your own Administration announced in early April 2025 that it would expand export restrictions by imposing export licensing requirements on the sale of certain advanced semiconductor chips, including the H20 and MI308 chips made by NVIDIA and AMD, and equivalent chips. The Department of Commerce has not issued export licenses for the chips until now, with one senior cabinet official admitting that the licenses were a bargaining chip in your trade discussions with China.

The decision to treat congressionally authorized national security export restrictions as a bargaining chip to be traded away seriously undermines the credibility of the U.S. export control regime, as pointed out recently by congressional colleagues. Now, however, we learn that your administration is not just trading away our security interests as part of a bargain with the Chinese, but that you actually intend to take a cut of those proceeds. You, yourself, have been quoted confirming that the 15% cut of chip sales was in exchange for the release of the licenses. Senior cabinet officials and administration spokespeople are now openly considering how this new model could expand in the future to other companies.

Under the U.S. Constitution, Art. 1, Sec.9, Clause 5 reads “[n]o Tax or Duty shall be laid on Articles exported from any State.” This clause categorically bars the imposition of taxes on exports. In addition to the clear and unambiguous constitutional prohibition on levying taxes on exports, federal law also forbids this practice with even greater specificity. The Export Controls Act of 2018 states clearly, “[n]o fee may be charged in connection with the submission, processing, or consideration of any application for a license….” It appears crystal clear that the promise of payments you have extracted from U.S. firms is unlawful under both the spirit and letter of the law.

Aside from the apparent illegality of the “revenue sharing” arrangement, the notion of charging U.S. companies to export establishes a dangerous precedent that both threatens America’s national security and opens the door to rampant corruption. If the chips in question pose an unacceptable national security risk to the United States, as the Bureau of Industry and Security has already determined, then there is no percentage of sales that can justify endangering America’s national security. Licenses should be issued based on technical requirements impartially applied by BIS experts in order to mitigate risk, and not on the basis of a mafia-style shake-down. 

We request, as a matter of urgency, that you reverse the arrangement and have senior officials from your administration brief Congress.

Respectfully,

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