Bitcoin Miners Face 10% Tariff Hike, Industry Growth at Risk

Bitcoin mining companies in the United States are preparing for significant challenges due to the recent global tariff rollout by the Trump administration. This move is expected to increase costs for imported hardware, potentially hindering the industry's growth in the country. The Digital Energy Council, an advocacy group representing the data center, bitcoin mining, and energy sectors, has submitted a request to the United States Department of Commerce to exclude ASIC miners from the tariffs. ASIC miners are specialized computers used exclusively for mining bitcoin and are currently not exempt from the tariffs, unlike other computing devices such as laptops and smartphones.

In the absence of an exemption, U.S. bitcoin mining companies are bracing for increased capital expenditure costs for ASIC miners and other critical infrastructure. Hashlabs CEO Jaran Mellerud highlighted the potential impact, stating that the tariffs could have "enormous implications for the entire bitcoin mining industry." Mellerud argues that the tariffs could reduce demand for ASIC miners in the United States, which currently leads in bitcoin mining activity. This could lead to a global surplus of ASIC miners, potentially lowering prices worldwide. Additionally, Mellerud forecasts that the tariffs could slow the growth of the Bitcoin network’s total computing power (hashrate) for the foreseeable future.

Luxor COO Ethan Vera described the situation as a "big blow" to the American mining industry, stating that it could stagnate growth if the tariffs continue. Vera also mentioned that bitcoin miners rushed to charter air freight to the United States in early April to avoid the tariffs' implementation. These efforts were partially invalidated when the Trump administration paused its original reciprocal tariff schedule on April 9 for a 90-day period, instituting a flat 10% tariff rate on more than 180 countries. This pause allowed for negotiations with trading partners, including a deal with China that reduced retaliatory tariffs for 90 days.

Despite these negotiations, the 10% duty on critical equipment remains a significant burden for miners. The two largest bitcoin mining computer manufacturers, Bitmain and MicroBT, assemble most of their machines in Malaysia, Thailand, and Indonesia. These companies offshored their manufacturing capacity in 2018 in response to Trump’s tariffs against China. Many miners also rely on China for electrical and network equipment needed to operate their bitcoin mining sites. Publicly traded bitcoin miners alone spent over $3.6 billion in 2024 on property, plant, and equipment, which includes ASIC miners.

The tariffs will also increase capital expenditure costs for raw materials needed to build and expand bitcoin mines, including aluminum, shipping containers, electrical infrastructure, and networking materials. The industry, which generally supported President Trump during his campaign, is now facing a tough situation. Trump had promised to reform certain policies from the U.S. Securities and Exchange Commission and end President Biden’s “war on crypto.” However, the tariffs could make the U.S. an uncompetitive market in the short-to-medium term, despite Trump's goal to make the U.S. "the crypto capital of the planet and the Bitcoin superpower of the world."

Coincidentally, the tariffs will also impact the latest business venture from President Trump’s sons, Eric Trump and Donald Trump Jr. The two brothers recently rebranded their company American Data Centers Inc. to American Bitcoin, inking a deal with public bitcoin miner Hut 8 to integrate with the company as a subsidiary. Hut 8 has allocated all of its self-owned bitcoin mining capacity in exchange for an 80% stake in the subsidiary. America Bitcoin is aiming for a public listing on the Nasdaq via a reverse merger with Gryphon Digital.

Despite the challenges, there is hope for the bitcoin mining industry if they can convince the Trump administration to classify ASIC mining computers under the same tariff code as other computers. The Trump administration has exempted certain computing equipment from its tariff schedule, but ASIC mining computers are classified separately. The Digital Energy Council is pressing the Department of Commerce to reclassify ASIC miners so that they can benefit from the exemption awarded to other computing equipment. The organization argues that this exemption is a national security issue and aligns with the Trump administration’s goal to nurture the United States’ bitcoin mining industry. Time will tell if this effort is successful, as the Department of Commerce has not yet responded to the Digital Energy Council’s comment.