At 4 p.m. EST on April 2, former U.S. President Donald Trump signed an executive order to implement a comprehensive reciprocal tariff policy. Starting April 5, a minimum 10% tariff would be imposed on all imports to the U.S., with higher tariffs on goods from about 60 trading partners, including the EU and China, taking effect on April 9.

This move triggered global market turmoil. After a series of negotiations with several countries, Trump announced on April 9 that the tariffs would be paused for 90 days — but he also raised tariffs on Chinese exports to a staggering 125%.

These erratic tariff policies have shaken global stock markets, and the crypto market continues to decline. Beneath the surface, these tariffs may also bring a cost storm to the U.S. Bitcoin mining industry.

On April 13, the U.S. Customs and Border Protection (CBP) website released a “Reciprocal Tariff Exemption Guide for Specific Products”, listing 20 product codes that qualify for tariff exemptions. However, the chips used in mainstream mining machines are not included in the specified CBP categories.

Tariff tensions temporarily eased — but can the U.S. Bitcoin mining industry catch its breath, and where is it headed next?

“Tariff for tariff”: U.S. miners in a quagmire

After China banned cryptocurrency mining in 2021, the U.S. became one of the largest cryptocurrency mining hubs in the world, thanks to its relatively relaxed regulatory environment, abundant energy resources, and advanced technological infrastructure.

In the global Bitcoin mining landscape, the U.S. leads with a 37.84% monthly hash rate share. However, with Trump’s new tariff announcements, the U.S. Bitcoin mining industry may be caught in the crossfire of an escalating trade war.

For the Bitcoin mining industry, hardware costs can account for 30% to 40% of total expenses. While the U.S. hosts many large mining operations, the supply chain for mining hardware is deeply rooted in Asia.

Chinese companies control 70% to 80% of the global ASIC hardware market. Pat Zhang, Head of Research at WOO X, noted that Trump’s high tariffs on Chinese products would directly drive up equipment costs for American miners.

Mitchell Askew, Lead Analyst at Blockware Solutions, previously pointed out that tariffs could reduce offshore miner supply and intensify demand among U.S. miners. If this coincides with a rise in Bitcoin prices, ASIC machines could skyrocket 5 to 10 times in price — just like in 2021.

In this context, U.S.-listed mining companies saw their stock prices tumble. The Bitcoin Mining Stock Index hit two significant lows on April 4 and April 9. This index is a weighted composite of stocks related to public mining equipment manufacturers, foundries, and mining operations.

Supporting this, after the April 9 tariff policy came into effect, shares of publicly listed U.S. Bitcoin mining companies — such as MARA Holdings and CleanSpark Inc — fell roughly 10%.

According to Blockspace estimates, U.S. Bitcoin miners imported over $2.3 billion worth of ASIC machines last year, with imports in Q1 alone exceeding $860 million. Major manufacturers of these machines are based in Malaysia, Thailand, and Indonesia.

In recent years, publicly traded American mining companies have raised billions to build data centers in energy-rich regions like Texas. Most of their mining equipment comes from Bitmain — China’s largest Bitcoin mining machine manufacturer.

Bitmain has factories in Indonesia, Malaysia, and Thailand — all of which were initially listed among countries subject to Trump’s “stricter tariff” policy, before the 90-day pause that reduced tariffs to a “minimum baseline” of 10%. However, Bitmain isn’t alone. Other major ASIC manufacturers like MicroBT and Canaan also have operations in Southeast Asia.

Since mining hardware represents a significant portion of capital expenditures for miners, the impact of the new tariffs is serious. Lin, Hardware Director at Luxor Technology (a Bitcoin mining software and services company), commented that “this will significantly affect their return on investment.” Taras Kulyk, CEO of Synteq Digital, added that the new tariffs would “stifle continued industry growth.”

On April 12, the U.S. CBP released a “Reciprocal Tariff Exemption Guide for Specific Products”, granting exemptions to 20 product codes.

However, Bitcoin mining machines are classified under HTS code 8543 as “electrical machines and apparatus having individual functions, not specified or included elsewhere,” which means ASIC miners designed for Bitcoin mining do not meet the criteria for exemption. Additionally, applying U.S. content rules to classify these machines as American-made is difficult.

The 90-day pause is just a temporary reprieve — the possibility of high tariffs returning still looms large. Therefore, the cost estimates in this article are still based on the originally planned April 9 tariff rates.

Below is a comparison of prices for several Bitmain mining machines — among Top 10 Bitcoin ASIC Miners of 2025 — under the tariff rates announced on April 2 (data from China).

Tariff increases drive surging mining rig costs. To mitigate the price impact of U.S. tariffs on mining equipment imported from China and Southeast Asian countries, large U.S. mining companies are reportedly going to extreme lengths. According to a report from Blockspace, some firms are renting planes at 2 to 4 times the usual cost—rather than using the more common and affordable sea freight—to import mining equipment from countries like China, Malaysia, and Thailand. Each air shipment can cost between $2 million and $3.5 million, allowing them to avoid price hikes caused by tariffs.

This is almost a replay of what happened in May 2021, when Chinese mining rig manufacturers rushed to air-ship machines after China signaled a crackdown on Bitcoin mining and trading activities.

Nick Hansen, CEO of Bitcoin mining company Luxor, described the atmosphere as “absolute chaos every day.”

To beat the clock before President Trump’s tariff policy took effect, both Kulyk and Lin stated that they were “scrambling” to speed up the shipment of mining rigs from overseas into the U.S.

“Ideally, we could just charter a plane and get the machines flown in — we’re doing everything we can to get creative,” they said. Following the 90-day tariff pause announced on April 9 by the Trump administration, the cost pressure on U.S. Bitcoin mining companies temporarily eased, and stock prices gradually rebounded.

The tariff hammer was raised high, then seemingly set down gently after causing much disruption — but has the storm truly passed, or is a new one brewing?

Panic and Relocation?

Due to the massive cost burden placed on U.S. mining companies by the new tariff policies, Bitcoin’s hash price (a metric measuring mining profitability) dropped below $40 per TH/s/day on April 7, 2025, reaching its lowest point since September 2024. Although the market somewhat recovered following the 90-day tariff pause on April 9, the hash price has remained under $45 per TH/s/day, hovering around $44 in recent days — still a low for 2025.

Hansen remarked that “most miners consider $40 their bear market threshold.” After speaking with numerous mining companies, he said many are “unsure of what to do next.”

According to TheMinerMag, a hash price of $40 implies that many miners are operating at or below breakeven.

For U.S. miners, the soaring total tariff costs on importing new machines from China — now reaching triple-digit percentages — are painful. But tariffs are only part of the problem. Bitcoin price volatility, decreasing transaction fees, and rising network difficulty are all contributing to lower profitability, slower mining company growth, and even potential consolidation, shutdowns, or hash rate shifts away from the U.S., said Eli Nagar, CEO of Braiins, in an interview.

The hash cost is a measure of the raw electricity cost (in USD) required for each TH/s or PH/s of hash power to generate its return over a 24-hour period. It’s calculated as:

Daily Hash Cost ($/PH/s) = Power Efficiency (J/TH) × Electricity Cost ($/kWh) × 24 (hours)

As such, mining cost under policy constraints is primarily influenced by two factors: the energy efficiency of the ASIC miner and the electricity rate miners pay.

Mining requires massive amounts of electricity to power and cool hardware, making energy costs a critical factor for profitability. Due to energy prices, U.S. mining farms are mainly concentrated in states like Texas, New York, Kentucky, and Georgia — with Texas standing out in particular.

According to the U.S. Energy Information Administration’s July 18, 2024 report, Texas is the largest energy-producing state, contributing around a quarter of the nation’s primary energy output. In addition to rich reserves of oil, natural gas, and coal, Texas also leads the nation in wind power generation. Compared to its 11.2% hash rate share in December 2021 (per Cambridge), Texas’s share had risen to nearly 30% as of Foundry USA’s update in July 2023.

With the increased costs of mining rigs due to tariffs, small and medium-sized mining companies are likely to suffer the most. Research from Investing shows that as tariffs rise, the U.S. share of global Bitcoin hash rate is expected to decline. When tariffs exceed 25%, the U.S. share could fall below 30%. As the rate increases, smaller mining firms may face a progression of survival struggles — from barely maintaining operations to exiting the market altogether — leading to further consolidation among large U.S. mining companies.

source:invest

Jaran Mellerud, CEO of Hashlabs Mining, believes that even if the Trump administration rolls back the tariffs later, it won’t restore miners’ confidence.

“Even if these tariffs are canceled within months, the damage is done — long-term confidence has been shaken,” Mellerud said. “When key variables can change overnight, very few will be willing to make major investments.”

This could prompt more U.S. mining firms to relocate — either to energy-rich states like Texas or to other countries entirely.

Additionally, since the tariffs have increased the cost of importing ASIC miners and related equipment, existing facilities in the U.S. have become more valuable, and expansion-minded miners may start looking into acquisitions.

Kulyk noted, “All of a sudden, these zombie companies with outdated machines start to look like attractive acquisition targets.”

In the long term, a wave of consolidation is brewing in the U.S. Bitcoin mining industry, with large-scale players poised to dominate. On a global scale, the landscape of Bitcoin mining may be quietly shifting as well.

A Blessing in Disguise?

When it comes to the U.S. mining industry, this storm is more than just a blow — there may be opportunity in the chaos. Nick Hansen said that amidst the disruption triggered by Trump, “the resilience of already-deployed American miners is strengthening.”

U.S. mining companies are beginning to explore domestic ASIC manufacturing, in a bid to reduce their dependence on Chinese hardware and shield themselves from the possible return of steep import tariffs. This shift marks an attempt to future-proof the industry.

From a broader perspective, the decline in U.S.-controlled hash rate and the resulting redistribution of Bitcoin mining may actually benefit the network.

Troy Cross, Professor of Philosophy and Humanities at Reed College, has noted that if a single country controls too much of the Bitcoin network’s hash power, it threatens one of Bitcoin’s core value propositions: censorship resistance.

Looking ahead, Cross believes that Bitcoin, unlike other emerging technologies, does not benefit from dominance by any single nation. Ideally, no country should control more than 50% of the network. Excessive hash rate concentration increases the risk of government influence, and high tariffs may end up pushing U.S. miners to give up some market share — ultimately reshaping the global mining landscape.

In a report dated April 8, Jaran Mellerud noted that the surplus inventory initially produced by manufacturers for the U.S. market could become stockpiled. To clear it, they may need to cut prices to attract buyers from other regions.

Ethan Vera, COO of Luxor, echoed this sentiment:

“If you’re paying more for a machine than your competitors in Canada or Russia, it becomes very difficult to compete on an international level.”

“From an economic perspective, Canada is becoming an increasingly attractive place to do business. Corporate taxes are expected to decrease. Capital gains taxes are also dropping. The country is heavily promoting economic growth — particularly in the data center sector,” he added.

Meanwhile, Kulyk suggested that Nordic countries may also become targets for hash rate expansion. In the future, miners might discover multi-gigawatt opportunities in parts of South America and Africa, Vera said.

The 90-day tariff pause acts as both a buffer and a countdown. As the storm of taxation sweeps through, U.S. miners now stand at a crossroads.

How many will grit their teeth and hold their ground domestically? And how many are quietly planning to relocate globally?

The ghost of tariffs has not vanished — it hangs like a Damocles’ sword above the heads of U.S. mining firms. The countdown ticks on, change brews silently, and the flood of hash power never flows backward.

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