Trump's State of the Union Signals Regulatory Volatility
President Donald Trump's State of the Union address signaled continued regulatory uncertainty for the tech and manufacturing sectors. The speech maintained a confrontational stance on trade with China, reaffirmed a hardline immigration policy impacting the H-1B visa program, and offered few specifics on future semiconductor export controls.
- Proposed changes to the H-1B visa program would replace the random lottery with a system that gives weighted preference to higher-salaried positions; this is in addition to a previously implemented $100,000 fee for new H-1B petitions. For major tech firms, including Apple, over 80% of H-1B applications in FY 2025 were for occupations related to artificial intelligence. - The Bureau of Industry and Security (BIS) has shifted its policy for exporting certain advanced AI semiconductors (like the Nvidia H200 and AMD MI325X) to China from a "presumption of denial" to a case-by-case review. However, this is coupled with a new 25% tariff, enacted January 14, 2026, on those same chips when they are imported into the U.S. before being re-exported. - The House Foreign Affairs Committee recently advanced the "AI OVERWATCH Act," a bipartisan bill that would regulate advanced semiconductor exports similarly to weapons sales. If passed, it would prohibit the sale of high-end chips like Nvidia's Blackwell series to entities in China, Iran, North Korea, and Russia for two years. - A recent Supreme Court ruling on February 20, 2026, invalidated the administration's use of the International Emergency Economic Powers Act for broad-based tariffs. In response, the White House immediately implemented a temporary 10% import surcharge on all trading partners under the Trade Act of 1974, which is set to expire after 150 days. - A new Federal Acquisition Regulation (FAR) Council rule is set to take effect on December 23, 2027, banning U.S. government agencies from purchasing any products or services that contain semiconductors designed or produced by specific Chinese firms deemed a national security threat. - The President announced a new "ratepayer protection pledge" that would require technology companies to supply their own electricity for new AI data centers. This policy aims to prevent rising residential electricity costs in areas with high concentrations of energy-intensive computing infrastructure.
