U.S. Bitcoin Miners Face 22-36% Cost Increase Due to China Tariffs

U.S. Bitcoin miners are bracing for potential business disruptions as the ongoing trade war between the U.S. and China continues to escalate. The White House recently announced a 125% import tax on China, in addition to a 20% tariff imposed by President Trump for China’s role in supplying fentanyl to the U.S. This brings the total tariff increase on Chinese goods to 145% since Trump took office.

The impact of these tariffs is particularly significant for the Bitcoin mining industry, which relies heavily on hardware produced in Southeast Asia, particularly by companies like Bitmain, MicroBT, and canaan. The U.S. has also imposed tariffs on Thailand, Indonesia, and Malaysia, which are home to some of the largest mining rig manufacturers. As a result, U.S.-based miners that source equipment from these regions are facing increased costs and potential disruptions to their operations.

Jaime McAvity, CEO of Cormint Data Systems, a U.S.-based mining company, highlighted the challenges posed by the tariffs. Cormint sources components from China, including miners, transformers, PDUs, power supplies, and containers. McAvity noted that the tariffs will contribute to higher buildout costs, making it uneconomical to import mining equipment from China to the U.S. He also suggested that U.S. firms that have ordered equipment from China but have yet to take delivery may sell them in the Chinese market, leading to weaker demand and lower prices.

Jill Ford, founder of Bitford Digital, a Texas-based company specializing in Bitcoin mining solutions and hosting services, echoed McAvity’s concerns. Ford stated that the newly imposed China tariffs will hit American Bitcoin miners the hardest, with a 22-36% increase in the cost of mining machines. This significant margin shift could make it difficult for U.S. miners to remain competitive with international miners who are not facing the same cost pressures.

Ford believes that the tariffs will create a major setback for the growth and global competitiveness of the American Bitcoin mining sector. The U.S. accounted for over 40% of the Bitcoin network’s global hashrate at the end of 2024, with two U.S.-based mining pools, Foundry USA and MARA Pool, accounting for over 38.5% of all blocks mined. However, the added cost per machine due to tariffs could force many miners to shift their operations overseas where equipment is more affordable.

On the other hand, McAvity views the tariffs as a temporary business disruption. He noted that mining suppliers are in the process of onshoring production to the U.S., including Cormint. While U.S. production costs are higher than in China, McAvity believes that the long-term increase in costs will not be too severe. Ford also suggested that U.S. Bitcoin miners should explore alternatives from U.S.-based manufacturers like Auradine, as well as global leaders like Whatsminer and Bitmain, which are planning to open a U.S. warehouse this summer.

Higher operational costs in the U.S. could make it less attractive for miners to expand their operations, potentially slowing hashrate growth in the U.S. However, miners in countries unaffected by the tariffs could gain a competitive edge. Ford noted that the tariffs will likely slow hashrate growth in the U.S., but global hashrate could continue to rise as mining operations shift to more cost-effective regions. McAvity and Scott Offord, owner and founder of Bitcoin Mining World, also pointed out that the short-term effect might actually help existing miners with slightly better profitability, but longer-term concerns about decentralization remain valid.

Adaptability will be key to success for U.S.-based miners. Ford advised miners to diversify their supply chains and stay nimble, while Offord suggested securing existing in-stock inventory quickly, exploring sourcing from lower-tariff countries, and prioritizing partnerships with manufacturers assembling rigs in the U.S. Zach Bradford, CEO of U.S.-based Bitcoin miner CleanSpark, noted that CleanSpark is prepared for the tariffs, with the majority of the company’s miners and infrastructure already stateside. Bradford expressed confidence in CleanSpark’s ability to maintain its momentum and lead the industry forward despite the tariffs.