Trump's Tariffs Put US Bitcoin Mining at Risk
Bitcoin miners rushing to buy machines before huge tax hits in July
US Bitcoin miners are spending up to $3.5 million on rush air freight to beat Trump's tariff deadline, trying to stock up on mining machines before prices jump by 36%.
Trump has paused the highest tariffs until July 8, but a 10% tax is already making US miners less competitive. Chinese equipment now faces a massive 145% tax, cutting off US miners from the biggest maker of mining computers.
What Does This Mean for Miners?
The 10% tax sounds small, but it hurts when mining profits are already tight.
"This won't make US mining unprofitable right away, but it makes starting new mining operations much more expensive," Hashlabs CEO Jaran Mellerud told Cointelegraph.
US miners are paying millions to fly in equipment before the deadline. Why? Because after July 8, buying the same mining machines could cost up to 36% more.
When your competitors in Canada or Russia don't pay these taxes, it's hard to stay competitive.
Trump's taxes hit other countries where mining equipment is made:
Indonesia: 32% tax (up from 1-3%)
Malaysia: 24% tax (up from 1-3%)
Thailand: 36% tax (up from 1-3%)
These countries became important after manufacturers moved there to avoid Trump's 2018 tariffs on China. Now those escape routes are closing too.
Mining company stocks jumped when Trump announced the 90-day pause. Bitfarms and Bitdeer saw their stock prices rise over 20% in one day.
But this happy feeling might not last. The average tax rate is now 22.5% – the highest since 1909, according to Yale's Budget Lab.
Trump's Mixed Messages
While Trump makes mining more expensive with taxes, he's also:
Created a government Bitcoin reserve
Said all crypto should be mined in America
Wants to move crypto rules from the SEC to the CFTC (which is better for crypto)
How Are Miners Adapting?
US miners aren't giving up. They're trying new approaches:
Bringing in chips from Taiwan (which don't have the high taxes) and building mining computers in the US
Buying as much equipment as possible during the 90-day pause
Setting up mining in countries without these taxes
MicroBT has started building mining computers in the US, but they can't make enough to meet demand.
Experts think these taxes will push mining out of America – just the opposite of what Trump says he wants.
"These taxes could change global mining as much as China's mining ban did," warned Ethan Vera from Luxor Technology.
Will Trump change his mind before July 8? If not, America might lose its 36-40% share of global Bitcoin mining power.
Until then, expect more emergency flights packed with mining machines, frantic buying, and miners around the world watching for the next surprise from Washington.