Later today, US President Trump will celebrate what he refers to as Liberation Day by continuing with a tariff policy to reduce American reliance on foreign products. Depending on the severity of the tariffs, the domestic crypto-mining industry will suffer considerable losses.
In an interview with BeInCrypto, Matt Pearl, director of the Strategic Technologies Program at the Center for Strategic and International Studies (CSIS), explained that levies on China will inherently disrupt supply chain dynamics and increase operational costs for the US mining industry.
How Will Liberation Day Tariffs Impact Mining Costs?
Later today, Trump is expected to unveil sweeping tariffs on US imports as part of an economic agenda he denominated as Liberation Day. However, details on how aggressive they will be or which countries will be most targeted have been lackluster.
The absence of information surrounding the event has left the greater public in the dark, guessing what will happen next. In the case of the US mining industry, participants will watch Trump’s announcements regarding China.
A little over a month ago, the Trump administration slapped a new 10% tariff on goods from China on top of the existing 10% tariff it had enacted only weeks before. During his campaign trail, Trump even proposed up to 60% border taxes on Chinese goods.
If Trump applies further levies on China in light of Liberation Day, American Bitcoin miners will have to make many decisions regarding the nature and scale of their future operations.
ASIC Hardware: The Crucial Import
Crypto mining heavily relies on Application-Specific Integrated Circuit (ASIC) equipment. These computer chips are built to perform the complex mathematical calculations required to validate transactions and mine new coins. They are particularly indispensable in Bitcoin and other proof-of-work cryptocurrencies.
ASICs have become the dominant hardware in Bitcoin mining due to their superior performance over other types of hardware, such as CPUs or GPUs. They offer a much higher hash rate per unit of energy consumed and are designed for specific mining algorithms.
“It’s an incredibly R&D-intensive process to create an ASIC that is energy efficient and does everything you need in the context of Bitcoin mining,” Pearl explained.
The United States heavily relies on imports of ASIC mining hardware, with a substantial portion coming from China. China, the US’s longtime trade rival, has well-established manufacturing capabilities for producing advanced semiconductor chips.
American Reliance on Chinese Hardware Equipment
According to the data from the Observatory of Economic Complexity (OEC), in 2023, the United States became the world’s largest importer of electrical machinery and electronics. That year, it imported $455 billion worth of hardware, such as integrated circuits (ASICs), semiconductor devices, and electrical transformers.
The United States imports the largest amount of electrical machinery from China. Source: OEC.
Electrical machinery and electronics were recorded as the second-largest import category, with China supplying $119 billion of that total, comfortably consolidating its position as the US’s top vendor.
In January 2025 alone, the United States’ Electrical machinery and electronics exports accounted for up to $19 billion, and imports amounted to $41.3 billion, with most imports coming from China.
Given that the US heavily depends on China for this specialized hardware, any tariffs imposed on electronic imports from China would directly affect the cost of ASIC mining hardware in the US.
Though less severe, Trump’s tariff policies during his first term in office offer a glimpse into their potential impact on cryptocurrency miners.
Lessons from Trump’s First Term
In June 2018, the United States Trade Representative under Trump reclassified Bitmain, a Chinese Bitcoin mining hardware maker, from a “data processing machine” to an “electrical machinery apparatus.” Bitmain, specifically its “Antminer” series, is a leading manufacturer of ASIC mining hardware.
By reclassifying the hardware, a 2.6% tariff was added to the existing 25% tariff on Chinese goods. This effectively raised the total tariff on US shipments for Chinese crypto mining equipment to 27.6%.
Mining hardware costs are one of the largest input costs operators in the American mining business face. Following the tariff hike, crypto miners inevitably saw their production costs increase significantly.
The current cumulative 20% tariffs on Chinese goods and the potential for further increases after Trump’s Liberation Day announcements suggest a similar or more severe impact.
“In the short to medium term, [the US mining industry] is extremely vulnerable, particularly because most of the Bitcoin mining equipment is coming from China. ASICs are not easy to produce, and so it’s going to raise the price of Bitcoin mining equipment in the US. It did in 2018 when Trump imposed tariffs in his first term, and it’ll be even more significant this time,” Pearl told BeInCrypto.
Aside from increased costs, tariffs will also cause a disruption in supply chain dynamics for mining hardware.
Supply Chain Disruptions: A Looming Threat
According to Pearl, US crypto miners can expect delays and shortages in mining hardware if Trump applies further tariffs on China. His judgment is mainly based on the fact that this is already occurring.
“We’re already seeing delays. We’ve already seen Customs and Border Patrol taking longer to examine the equipment and clear it through customs, and then you also had the US Postal Service that had very temporarily halted package shipments from China,” Pearl explained.
Two months ago, the US Postal Service (USPS) announced that it had temporarily suspended package deliveries from China shortly after Trump imposed 10% tariffs on Chinese imports. USPS clarified that the suspension stemmed from removing an exemption allowing duty-free, inspection-free shipments under $800.
“The USPS and Customs and Border Protection are working closely together to implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery,” the Postal Service said in a statement.
The suspension, however, was reversed less than 24 hours later. Yet, with new tariffs on the horizon, a similar situation can play out, threatening to backlog mining plans for American Bitcoin miners.
“Once [Trump] imposes the tariffs it’ll be even more significant in terms of, it’ll raise costs, it’ll depress the amount that’s sent, and then it’ll raise uncertainty about whether the Customs and Border Patrol or others will slow things down when they do get to the US. It’s harder for companies to have assurance about when they’ll be able to actually begin mining,” Pearl added.
If tariffs persist, US crypto mining companies will require considerable long-term restructuring.
Will US Miners Relocate Due to Tariffs?
Though there’s no evidence that American crypto mining companies relocated due to Trump’s tariff policy during his first presidency, this option is a plausible outcome this second time around.
“I think the difference this time is that there’s a lot more uncertainty. The President seems to be much more focused on tariffs and so far, it seems that there’s a lack of permanence to the administration’s decisions. There’s an imposition of tariffs, but then they’ll adjust them or increase them, so I think that there’s just a lot more uncertainty than there was in the first administration. That’s what would make it different, in terms of seeing more relocation of the mining industry elsewhere, outside of the US,” Pearl told BeInCrypto.
Clara Chappaz, France’s Digital Minister, suggested monetizing EDF’s surplus energy through Bitcoin mining this week. EDF is the country’s largest state-owned energy company. According to Chappaz, this approach could help reduce the company’s debt. Many in the broader crypto community celebrated the idea.
If Europe surrenders itself to these strategies, might American companies feel more inclined to move their operations abroad? Pearl says yes, but Europe is not the region of preference.
“I think the countervailing thing is that labor costs are more expensive in Europe. There can be a lot more red tape in permitting and actually building the infrastructure. I wonder if there are other regulatory and labor barriers that will make a shift to Europe less likely than a shift to other parts of Asia,” he said.
However, simple relocation won’t eliminate the need for access to a consistent ASIC supply.
An Unlikely Outcome
So far, no country has been able to produce ASICs to the scale and speed that China has. It might also be in China’s best interest to relocate its operations to the United States.
“It’s possible that some of the Chinese companies that produce this equipment will actually locate manufacturing capacity in the US so that they aren’t subject to the tariffs. But that involves relocating facilities and getting permits. It’s something that takes time, and it’s not going to happen tomorrow,” Pearl said.
However, given the hostility between the two countries, this seems unlikely.
Ultimately, domestic production offers the best path to US self-sufficiency. However, it will be a complex –and lengthy– process.
Bringing Operations Onshore
Under Biden, Congress approved the CHIPS and Science Act in July 2022. This legislation was designed to boost domestic semiconductor manufacturing in the United States.
Though it doesn’t explicitly single out ASIC equipment, its provisions strongly encourage and incentivize the relocation and establishment of all types of semiconductor production within US borders, including those related to ASICs.
“If the [Trump] administration doesn’t try to undo some of what was done under the CHIPS Act in terms of moving manufacturing capacity to the US, it’s possible that over the course of the next several years, US companies will develop ASICs that are competitive. But that’s a long-term project– it’s not an easy thing to develop those chips,” Pearl told BeInCrypto.
Two days ago, Hut 8, a major North American Bitcoin mining company, partnered with Eric Trump to launch American Bitcoin, aiming to turn it into the world’s largest pure-play miner.
While this initiative aligns with President Trump’s goal of bringing production back to the US, Hut 8, like other American miners, relies on ASIC hardware. This creates a potential conflict with his tariff policies.
In the interim, US miners will have to grapple with the existing reliance on Chinese ASICs.
American companies will continue to bear the impact of Trump’s tariffs on crucial Chinese crypto mining hardware. This will last until the US can efficiently onshore broader manufacturing and production.
If Trump’s Liberation Day announcements involve further tariffs on China, domestic mining companies, large or small, will see production costs rise significantly. Disturbances in tightly interrelated supply chain dynamics will also disrupt their operations. How they respond has yet to be determined.
