Increasing tensions in China-US trade relations may portend tougher times ahead for Chinese bitcoin mining hardware maker Bitmain, with shipments to one of its major overseas markets facing new tariffs since August 23.
Bitmain’s flagship Antminer S9 was in June reclassified by the United States Trade Representative as “electrical machinery apparatus,” subjecting this device to a 2.6 percent tariff. It was formerly categorized as “data processing machine.” More significantly, the reclassification brought it under the category of Chinese goods subject to an additional 25 percent tariff, bringing total tariff for Chinese crypto mining rig makers to 27.6 percent from zero on their US shipments.
According to Sanford C. Bernstein senior analyst Mark Li, the new tariff is likely to make Chinese mining hardware less competitive in relation to those of rivals in other countries. Data from an October report reveals that sales of mining hardware dropped by over 50 percent to $850 million from $1.8 billion reported in the first quarter.
Ben Gagnon, co-founder at Lutech, a bitcoin mining developer observed that the past 18 months had seen a rise in investment and mining activities in the US.
In his words: “All manufacturers of mining rigs based in China will likely be affected by the tariff code change and, and in turn, captured by the US trade tariff.”
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