Nvidia, the leading artificial intelligence chip designer, has reportedly been hit by a surprise customs block in China for its advanced H200 chips, leading suppliers to pause production. This development follows closely on the heels of the US Department of Commerce's decision in January 2026 to revise its export policy, formally allowing Nvidia to sell H200 and similar AI processors to approved customers in China under specific conditions. These conditions included requirements such as third-party testing in the US and volume caps, signifying a strategic shift by the Trump administration to balance national security with American chip industry interests. However, just days after the US approval, Chinese customs officials reportedly instructed agents that the H200 chips are not permitted to enter the country, with some reports indicating that Chinese technology companies were warned against purchasing them unless absolutely necessary. The Mint article, citing the Financial Times, noted that Nvidia was "caught by surprise" by this turn of events, especially as initial shipments had arrived in Hong Kong. This sudden counter-move from Beijing has caused suppliers of H200 components to halt production, fearing accumulating unsold inventory, and has led to order cancellations. While the H200 is technically Nvidia's second most powerful AI chip, rather than its absolute flagship (with Blackwell being newer), it remains a critical component for large-scale AI model training and a highly sought-after technology in China. This ongoing trade friction underscores the deepening geopolitical rivalry over advanced technology between the United States and China, impacting global supply chains and AI development.