US President Donald Trump’s new 54% tariffs on Chinese imports have sparked widespread fear of a trade war and potential disruption to technology supply chains. While it may affect the Chinese imports of key minerals such as gallium, germanium, and others used in making semiconductors, infrared technology, fiber optic cables, solar cells, military applications and others, AI companies like DeepSeek appears remarkably unfazed.
Two key factors insulate the AI company: first, DeepSeek’s primary offerings are digital AI models and software, not physical goods subject to traditional tariffs; and second, its focus on AI development and data processing, rather than manufacturing, reduces its reliance on the physical supply chains that are the primary targets of the tariffs.
How DeepSeek remains strategically positioned to navigate the tariff storm
It is to be noted that the question of DeepSeek’s “immunity” from Trump’s tariffs is complex and requires understanding the nature of DeepSeek and the focus of the tariffs. DeepSeek is a Chinese AI company, primarily known for developing advanced AI models, including large language models. Its products are essentially software and AI services.
Trump’s tariffs primarily target the import of physical goods. Traditionally, tariffs are used as a tool to increase the cost of imported manufactured goods, to protect domestic industries. However, there may also be concerns regarding the flow of data and technology, which may indirectly cause issues with the use of AI from foreign nations.
Why DeepSeek ‘immunity’ is complex
Software and AI models are digital goods, not physical products. Therefore, they don’t fall under the traditional definition of goods subject to import tariffs. This means that the direct application of import tariffs is less relevant to DeepSeek’s core products.
The US government could potentially impose restrictions on:
- The use of DeepSeek’s AI models within the US.
- The transfer of data to and from DeepSeek.
Therefore, while traditional tarrifs might not be the main issue, there are other ways the US government could restrict the use of Deepseek. It is to be noted that US Commerce department bureaus have already informed staffers that Chinese AI model DeepSeek have been banned on their government devices, news agency Reuters reported.
Much of the potential restrictions can be based on National security concerns, regarding the handling of data, and the potential for the AI to be used in ways that are harmful to the US.