Will US tariffs kill Bitcoin mining companies?

Trump's introduction of new tariff policies has affected the global trade pattern, and the impact on the crypto mining industry is particularly far-reaching. (Synopsis: The US Bitcoin mining crash "actually made money?") Miner experts: Trump's tariffs will make mining machines in other countries super cheap) (Background supplement: Harvard University study: Bitcoin mining exacerbates PM2.5 air pollution, BTC The back pot? ） 1. Trump's New Tariff Deal: Content and Motivation 1.1 Policy Content U.S. President Donald Trump signed two executive orders at the White House on April 2, 2025, announcing that the United States will establish a 10% "minimum benchmark tariff" for trading partners and impose higher tariffs on certain countries. The tax rate chart shown shows that the United States sets reciprocal tariff rates for countries around the world ranging from 10% to 50%, including 10% for the United Kingdom, Australia, Singapore and other countries, 17% for the Philippines, 20% for the European Union, 24% for Japan, 25% for South Korea, 34% for China, 46% for Vietnam, and 49% for Cambodia...... Trump declared that the new tariffs are aimed at boosting U.S. manufacturing and "making America rich again." The "base duty" rate will take effect on April 5 and the "reciprocal duty" will take effect on April 9. At the heart of this new tariff policy is the so-called "Reciprocal Tariff" (reciprocal tariff). However, "reciprocal tariffs" do not apply in certain circumstances, including, but not limited to: (1) items subject to 50 U.S.C. 1702(b); (2) steel and aluminum products, automobiles and auto parts that are already subject to Section 232 tariffs; (3) copper, pharmaceuticals, semiconductor and wood products, certain critical minerals, and energy and energy products listed in Annex 2 of the Executive Order; (4) Goods subject to the rates set forth in Column 2 of the Harmonized Tariff Schedule HTSUS; (5) all goods that may be subject to future Section 232 tariffs; (6) Products in Canada and Mexico that comply with the USMCA rules of origin; (7) The value of the U.S. content in the product (U.S. content is the value attributable to components produced wholly in the U.S. or based on substantially altered components), provided that the U.S. content is not less than 20% of the value of the commodity. 1.2 Analysis of motivation The White House declared that the new tariff order aims to address the long-term trade deficit in the United States by significantly adjusting tariff policy and creating a level playing field for American companies and workers. In fact, Trump vigorously imposed tariffs at the beginning of his current term, and economic factors are only one of the motivations: First, economic factors. The U.S. has been in a chronic trade deficit in international trade, which, according to the White House statement, "has led to the hollowing out of the U.S. manufacturing base, inhibited the U.S. ability to expand advanced domestic manufacturing capabilities, disrupted critical supply chains, and made the U.S. defense industrial base dependent on foreign adversaries." From an official point of view, reducing the deficit and reviving the US manufacturing industry are the biggest economic factors for the current US administration's tariff policy upgrade. Second, political factors. Trump's and Republican voters are predominantly blue-collar and conservative, and they are also the main victims of the loss of manufacturing in the United States. The Trump administration's use of tariffs to realize its political slogan of "Make America Great Again" is one of its important strategies to cater to voters, fulfill campaign promises, and stabilize the basic stock of votes. At the same time, raising tariffs and trade barriers is essentially to maintain the central position of the United States in the global political and economic system and use economic means to achieve political goals. Third, leadership factors. From a certain point of view, the new tariff policy is not unrelated to Trump's businessman background, compared with long-term economic planning, Trump prefers to achieve the short-term interests of the United States during his term of office and shape the political image of "America First", so he is willing to use tariffs as a "trading chip" in international negotiations. 2. How tariffs affect crypto mining The release of this tariff policy immediately triggered a violent market reaction. On April 2, U.S. stock futures plunged en masse, and the crypto market was also not spared during the collapse of U.S. stocks. Recently, bitcoin fell from $88,500 to a minimum of $74,000, and mainstream altcoins such as BNB, SOL, XRP fell even more sharply. In addition to the overall impact on the traditional financial market and the crypto market, the impact of the new tariff policy on the crypto mining industry deserves special attention. 2.1 The impact of the new tariff policy on crypto mining Because of its abundant cheap energy, strong infrastructure, and stronger financial strength, the United States has become the most important crypto mining market in the world. According to December 2024 statistics, the United States accounts for about 36% of the global hash value, leading the cliff, and together with Russia (16%), China (14%), the United Arab Emirates (3.75%) and other countries have shaped the basic pattern of the global cryptocurrency mining market. By the beginning of 2025, the proportion of computing power in the United States may have exceeded 40%, or even close to 50%. The high computing power of the United States represents a high demand for crypto mining machines, and the United States is not the main production place of crypto mining machines, but mainly imports mining machines. Therefore, in the crypto mining ecological chain, the main ones directly affected by the tariff policy are the middle and upstream manufacturers, that is, the supply of raw materials, the assembly and sales of mining machines. Among them, the supply of raw materials involves wafers, materials and other components. As the main components of mining machines, the chips are mainly from Samsung in South Korea and TSMC in Taiwan, and related materials are mainly provided by Chinese and Southeast Asian manufacturers. Regarding the assembly of mining machines, due to labor costs and other factors, China and Southeast Asia have undertaken most of the assembly work with cheap and abundant labor. However, the above countries and regions are all included in the reciprocal tariff collection areas, and the tariffs of Cambodia, Laos, Vietnam, etc. are even close to 50%. This huge tariff will create a lose-lose situation for US crypto miners and crypto miner manufacturers: on the one hand, tariffs will directly increase the import price of crypto miners, compress the US market for miner manufacturers, and weaken their profitability in the most important markets. For the mining industry, which is already slowing down, this is tantamount to another heavy and lasting blow. On the other hand, this part of the tariff cost will also be apportioned to crypto miners in the United States, which will also greatly increase their operating pressure. Especially considering that since the price of bitcoin has continued to fall from the high of $100,000, all kinds of cryptocurrencies have continued to fall, and the profit margins of all kinds of crypto miners have been significantly reduced, once the price of mining machines climbs, some crypto miners may face the situation of not making ends meet and being forced to close the mining farm. Furthermore, once the number of miners as blockchain nodes is reduced too much, the processing efficiency and security of the blockchain will also be threatened, fundamentally negatively affecting the entire crypto industry. 2.2 Exemptions and Uncertainties There are several exemptions in the reciprocal tariff policy, in particular, which include exemptions for some semiconductors and U.S.-made products, but these circumstances are difficult to apply to the cryptomining industry. First, the Trump administration through the Harmonized Tariff Schedule (HTS) system, so that different products correspond to different customs codes to stipulate the application of tariffs on specific products, and its announced annexes that are not subject to the new tariffs only list a small part of the HTS code in the semiconductor field, and the chip models required by mainstream mining machines do not belong to them. Second, under the so-called U.S. content rules, if U.S.-made product components account for more than 20% of the value of the entire machine, they can theoretically constitute "U.S. content" and are exempt from reciprocal tariffs. But the United States has not been the main source of crypto mining machines, whether it is chips, other components or assembly, it is done in the area where tariffs are imposed, so it is difficult for crypto miner manufacturers to get through the rule.