Trump’s latest tariff hike in China could potentially turn the global Bitcoin mining industry offshore as domestic miners face increased hardware costs insurance premiums.
Bitcoin (BTC) mining could soon move further offshore as US miners face rising hardware costs. On Wednesday, April 9, a new report from Hashlabs Mining CEO Jaran Mellerud highlighted the economic impact of US tariffs on domestic crypto mining. According to the report, these tariffs could increase the cost of mining equipment in the United States by at least 22% compared to other countries.
Specifically, US cryptominers rely heavily on imported hardware from Asian countries such as China, Indonesia, Malaysia and Thailand. All of these are subject to a minimum 24% customs duties on all items, including mining rigs.
US tariffs on Bitcoin mining equipment by country of origin | Source: Hashlabs
Even the most favorable scenarios face the lowest rates raised from Malaysia alone, but equipment costs still rise by 24%. However, this scenario is unrealistic as US imports come from a combination of suppliers across the region. In particular, the numbers cited in the report have not yet explained the recent 50% tariff hike on Chinese products, raising the total tariff rate to 104%.
Still, the US has stockpiling of mining equipment and lowers prices. Because these strains are depleted, miners will have to pay premiums between 22% and 36% of their equipment compared to other countries. These figures come from Ethan Bela, CEO of Luxor Crypto Mining Company, and are reflected in the Hashlab Mining Report.
US miners scrambled to import rigs prior to tariffs
This report coincides with previous fears by industry officials. Codestream CEO Gadi Glikberg said tariffs are only slowing down the growth of US mining. Due to the cost of equipment that affects return on investment, there is unlikely to be any further expansion plans.
“Newly imposed tariffs are unlikely to cause large-scale escapes, but miners can delay or redirect future expansion plans to reassess the long-term cost-effectiveness of scaling operations within the United States,” said Codestrame CEO and CEO.
Taras Kulyk, CEO of Mining Equipment Brokerage Synteq Digital, revealed that his company was working to rush delivery before the tariff hikes came into effect.
You might like it too: BTC Mining Hashrate Hits, Strengthening Pressure on US Miners Squealed by Tariffs
