President Trump’s TikTok-for-tariffs deal ultimately hinges on a cease-fire in the U.S.-China AI chip war. The consequences may be dramatic for Nvidia and the world order.

On Saturday, the Trump administration said it would put in place 25% tariffs on Canada and Mexico and 10% tariffs on China, effective Tuesday. Early Monday, the administration said they are pausing plans for the 25% tariffs on Mexico for one month subject to more negotiations.

Though the United States is the global leader in designing chips, the vast majority of chip production happens overseas, particularly in U.S.-ally Taiwan.