Author: Jaran Mellerud
Translated by: TechFlow
Abstract: US mining machines will be more expensive, with a decline in mining market share
Trump's tariff policy will have a significant impact on the Bitcoin mining industry. Here is an analysis of the policy's effects on the industry.
On April 2, Trump announced comprehensive new tariffs on imported goods aimed at strengthening US trade balance. Southeast Asia was hit the hardest, which will have far-reaching implications for the Bitcoin mining machine supply chain. This region is home to most mining machine manufacturers, including major producers like Bitmain, MicroBT, and Canaan.
Moreover, since the US accounts for 36% of global computing power, these tariffs could severely affect miners' economic efficiency, hardware prices both domestically and internationally, and global computing power distribution.
Before delving into the multifaceted impacts of these tariffs on the Bitcoin mining industry, let's briefly explain how tariffs work.
How Do Tariffs Work?
Tariffs are taxes imposed by governments on imported goods, typically aimed at protecting domestic industries by raising the prices of foreign products. When tariffs are implemented, importers must pay a certain percentage of the declared value of goods to customs upon entry.
For example, if a US company imports electronic products worth $1,000 from China with a tariff rate of 54%, the importer must pay an additional $540 in tariffs, bringing the total import cost to $1,540. These increased costs are usually passed on to consumers or reduce the importer's profit margin.
Tariff History: US-China Trade War and Its Ripple Effects
Bitcoin mining is a global industry, with the US being a key participant. Trade wars and their resulting tariffs have already impacted the industry. Historically, industry companies have found ways to circumvent these tariffs. In the following sections, we will explore how tariffs have influenced the Bitcoin mining supply chain and the strategies companies have adopted to avoid them.
In 2018, the US government imposed 25% tariffs on a range of Chinese goods, including electronic products, as part of the US-China trade war.
In response, companies like Bitmain began seeking ways to avoid these high tariffs. They shifted production from mainland China to Southeast Asian countries like Indonesia, Thailand, and Malaysia, where exported goods are either tax-free or subject to much lower tariffs—typically between 1% and 3% for electronic products.
This strategy worked effectively until earlier this month, when Trump raised tariffs on imported goods from Indonesia, Malaysia, and Thailand to 32%, 24%, and 36% respectively. As a result, companies like Bitmain and MicroBT can no longer completely avoid these high tariffs, which were initially only targeted at goods imported from China.
In the following sections, we will explain in detail how these newly implemented tariffs will impact the Bitcoin mining industry.
Mining Machine Prices in the US Will Increase Significantly
The most direct and obvious impact of tariffs will be a significant increase in mining machine prices in the US.
As Ethan Vera pointed out in 'The Mining Pod' program: "...any company operating in the US and looking to purchase mining machines will need to pay an additional 22% to 36% for these machines." This is consistent with our data.
However, a 22% price increase only applies to imported mining machines. Currently, there is still a large inventory of mining machines in the US. According to Bitmars' pricing data, there is currently a 13% to 25% price difference between mining machines in the US and Hong Kong. As US inventory depletes, this gap may narrow to 22%, plus a small amount of shipping costs.
The graph shows the final cost of importing a $1,000 Bitcoin mining device to the US and Finland before and after introducing equivalent tariffs. Finland, like most other countries, has no tariffs on electronic imports from Asia—we use this country as an example because we mine there.
As shown, initially importing mining machines to the US cost slightly more due to approximately 2% tariffs. However, after the new tariffs are introduced, the minimum cost of a $1,000 mining machine in the US rises to $1,240. This is a significant increase. Meanwhile, in Finland and most other countries, the cost of a $1,000 machine remains unchanged due to no tariffs.
In an industry like Bitcoin mining that is extremely cost-sensitive, a 22% increase in mining machine prices could make operations financially unsustainable. In the following sections, we will explore how these changes affect mining profitability in the US and other regions.
Mining Machines May Become Cheaper Outside the US
As mining machine prices rise in the US, prices in other parts of the world may see an opposite downward trend.
Demand for mining machines destined for the US is expected to drop dramatically, potentially approaching zero. Considering the US has been the dominant ASIC (Application-Specific Integrated Circuit) market, accounting for nearly 40% of global computing power, a sharp decline in US purchases will lead to a significant reduction in global demand.
With reduced demand from US miners, manufacturers will face surplus inventory originally planned for the US market. To clear these inventories, they may need to lower prices to attract buyers from other regions.
While it's difficult to predict exactly how much mining machine prices will drop—as mining profitability also influences prices—we can conclude based on basic economic principles that a decrease in demand for an asset typically leads to a price reduction.
This price reduction will make it easier for miners outside the US to continue expanding, which may also lead to the decline in the US's global computing power share that we will discuss next.
US Share in Global Bitcoin Mining Will Decline
Since China banned Bitcoin mining in mid-2021, the US has been the dominant force in Bitcoin mining. According to Hashrate Index data, the US currently accounts for 36% of global computing power.
Like any commercial activity, Bitcoin mining is fundamentally about balancing risk and reward. Over the past four years, the US has attracted significant mining investment because it was seen as one of the world's lowest-risk environments, with political stability, abundant energy, and liberalized electricity markets. Additionally, miners have so far avoided major import tariffs, helping them control capital expenditures. These factors collectively created an unparalleled risk-reward balance.
To understand how new tariffs might reshape the US's position in global mining, we first analyze from a returns perspective.
The graph shows the estimated payback period for deploying an Antminer S21+ in the US and a country unaffected by tariffs. As the data indicates, paying 24% more for the same mining machine in the US will significantly extend the payback period—undermining the core economic rationale for mining in the US.
Beyond higher machine costs, the risk aspect has also been impacted. Many US miners felt reassured when Trump was set to regain power, expecting a stable regulatory environment. However, they are now experiencing another side of his policy volatility. Even if these tariffs are withdrawn within months, the damage is done—confidence in long-term planning has been shaken. Few would be willing to make significant investments when key variables might change overnight.
In summary, the once-unparalleled risk-reward balance for US Bitcoin mining has significantly deteriorated. This change may lead to a gradual decline in the US's share of the global mining industry relative to other countries.
Of course, existing mining machines already imported to the US will not be affected—miners have no reason to shut them down. But the path to expansion has now become steep and uncertain.
At the same time, miners in tax-free jurisdictions will continue to expand and consolidate their competitive advantages. Therefore, it is expected that the United States' global hash rate share will decline - not because miners are exiting, but because they are no longer growing.
From a more macro perspective, this may lead to a more diverse geographical distribution of Bitcoin mining than ever before. While the United States will still be a major player, its dominance will weaken, and the global hash rate distribution will become more balanced. This is consistent with the predictions of Kristian Csepcar from Braiins and Summer Meng from Bitmars.
Network Hash Rate Growth Will Slow Down
In the previous section, we explained how new tariffs will cause the United States' share in the global Bitcoin mining industry to decline. Given the United States' important role in global hash rate, its slowdown - or even complete halt - will inevitably lead to an overall deceleration of global hash rate growth.
According to Hashrate Index data, as of the second quarter of 2025, the United States accounts for approximately 36% of the global hash rate. In contrast, CBECI data shows that the United States' hash rate share was around 38% in January 2022. This indicates that the growth rate of the U.S. mining industry over the past three years has been roughly on par with the rest of the world.
Assuming this growth trajectory would have continued, the United States would have contributed about 36% of future global hash rate growth. Therefore, if the mining industry stagnates due to tariffs, it could potentially reduce the global hash rate growth rate by up to 36%.
However, the possibility of the U.S. mining industry completely stopping growth is extremely low. As we will explain in the next section, these tariffs may be temporary, and there may be ways to circumvent them in the future. Therefore, a more realistic expectation is that the U.S. mining industry will continue to expand, but at a much slower pace. The assumption of a 36% reduction in global hash rate growth should be viewed as an absolute upper limit - the actual impact may be slightly lower.
In the long term, if U.S. growth slows or stagnates, miners from other countries may accelerate their expansion, gradually filling this gap.
Nevertheless, in the short to medium term - within the next one to two years - we may see global hash rate growth slower than previously expected. In an industry where slower hash rate growth means higher income, this will be a welcome development for miners worldwide.
Is This Temporary or Permanent?
So far, this article has taken a rather pessimistic view of how these tariffs will affect the U.S. Bitcoin mining industry - which is reasonable, considering their potential immediate and severe impact. However, the situation is more complex, and there are several important questions worth exploring.
In the following sections, we will answer these questions and assess how the U.S. mining industry can address current challenges in the long term.
Will Trump Revoke the Tariffs a Few Months After Implementation?
It is entirely possible - especially considering the unpredictability and reactivity of Trump's policy-making style. If the tariffs are revoked, U.S. miners will be able to import mining machines at competitive prices again, alleviating many of their immediate pressures.
However, the damage to long-term investor confidence may have already been done. Even if the tariffs are canceled, the fact of their sudden introduction makes large-scale, long-term investments in U.S. mining more difficult. In a capital-intensive industry like Bitcoin mining, policy stability is crucial - and now, it is scarce.
Can Mining Machine Manufacturers Circumvent Tariffs by Importing Chips from Taiwan and Assembling Mining Machines in the United States?
Mining machine manufacturers could indeed potentially circumvent tariffs by importing chips from Taiwan and assembling mining machines locally in the United States. According to an official White House statement, semiconductors are not subject to reciprocal tariffs. This means chips can be imported to the U.S. tax-free. However, producing mining machines locally still requires other components, many of which have become more expensive due to tariffs, which will lead to overall U.S. economic inflation.
Currently, manufacturers like MicroBT have established assembly lines in the United States, but Bitmain has not followed suit. Even with MicroBT's assembly capabilities, its production capacity is far from sufficient to meet U.S. mining machine demand in the next 1-2 years.
Therefore, while this option is technically feasible, it cannot solve the immediate problems of U.S. miners. However, in the long term, we anticipate that more mining machine assembly will gradually shift to the United States as manufacturers adapt to the new tariff environment and expand local production capabilities. This transition may help reduce dependence on international imports and mitigate the impact of tariffs over time.
Is Establishing a Complete Bitcoin Mining Hardware Supply Chain from Chip Manufacturing to Final Assembly in the United States Realistic?
Establishing a complete Bitcoin mining hardware supply chain from chip manufacturing to final assembly in the United States is a complex challenge, despite strong pushes from the Bitcoin mining industry and political leaders to localize chip production. Currently, the most advanced chips used in Bitcoin mining are produced in Taiwan and South Korea, regions with decades of expertise and finely-tuned supply chains. The U.S. dependence on critical components from Asian countries is a major geopolitical risk not just for the Bitcoin mining industry, but for the entire high-tech industry.
While localizing mining machine assembly in the United States is feasible, continued reliance on imported chips remains a significant obstacle. Companies like Bitmain, MicroBT, and Canaan can establish assembly lines in the United States, and new entrants like Auradine are also watching this market. However, without locally produced cutting-edge chips, these manufacturers will still depend on imports in the foreseeable future.
Kristian Csepcsar from Braiins further emphasized this challenge, saying: "Chip foundries have established manufacturing facilities in the United States, but they start from high nanometer levels. Cultivating talent and expertise to move to lower nanometer levels takes years. This process is incremental - companies first start with high nanometer chips to ensure investment profitability, then strive to expand to more advanced technologies. Even if the United States moves forward, establishing a fully localized Bitcoin mining hardware supply chain is almost impossible, and the costs will be very high. The real question is whether manufacturing in China and paying tariffs would still be cheaper if demand is high. After all, launching end-to-end manufacturing in the United States takes time and significant investment, just like Bitmain recently tried to establish an assembly line in China - though there hasn't been much news since."
In short, while the United States has significant potential in assembly and chip manufacturing, a fully localized Bitcoin mining hardware supply chain remains a long-term goal rather than a short-term reality. The cost, time, and complexity of this transition make large-scale achievement unlikely in the coming years.
Conclusion
In summary, the newly implemented import tariffs will significantly impact the U.S. Bitcoin mining industry - leading to hardware price increases, a decline in U.S. market share, and a slowdown in global hash rate growth - but the long-term implications are more complex.
As the situation evolves, miners and industry stakeholders need to closely monitor the political and economic landscape to address potential tariffs and policy changes. While the U.S. mining industry may face challenges in the short term, opportunities for growth and adaptation remain within the global mining ecosystem.
