1. Trump’s new tariff policy: content and motivation
1.1 Policy Content
On April 2, 2025, US President Trump signed two executive orders at the White House, announcing that the United States will set a 10% "minimum base tariff" for trading partners and impose higher tariffs on certain countries. The tariff rate chart it displays shows that the reciprocal tariff rates set by the United States for countries around the world range from 10% to 50%, including 10% for the United Kingdom, Australia, Singapore and other countries, 17% for the Philippines, 20% for the European Union, 24% for Japan, 25% for South Korea, 34% for China, 46% for Vietnam, and 49% for Cambodia... Trump claimed that the new tariff measures are aimed at promoting US manufacturing and "making America rich again." The "base tariff" rate will take effect on April 5, and the "reciprocal tariff" will take effect on April 9.
The core of this new tariff policy is the so-called "reciprocal tariff". However, the "reciprocal tariff" does not apply in certain cases, including but not limited to: (1) items subject to 50 USC 1702 (b); (2) steel and aluminum products, automobiles and automobile parts that are already subject to Section 232 tariffs; (3) copper, pharmaceuticals, semiconductors and wood products, certain critical minerals, and energy and energy products listed in Annex 2 of the Executive Order; (4) goods subject to the tariff rate specified in Column 2 of the Harmonized Tariff Schedule of the United States (HTSUS); (5) all goods that may be subject to Section 232 tariffs in the future; (6) goods from Canada and Mexico that meet the USMCA rules of origin; (7) the value of the U.S. content in goods (U.S. content refers to the value attributable to components that are wholly produced in the United States or based on substantial changes), but the premise is that the U.S. content is not less than 20% of the value of the goods.
1.2 Analysis of motivation
The White House claims that the new tariff order aims to address the long-standing U.S. trade deficit problem by significantly adjusting tariff policies and creating a fair competitive environment for American companies and workers. In fact, Trump has imposed tariffs vigorously since the beginning of this term, and economic factors are only one of the motivations:
First, economic factors. The United States has long been in a trade deficit position in international trade. According to the White House's statement, this "has led to the hollowing out of the U.S. manufacturing base, inhibited the United States' ability to expand advanced domestic manufacturing capabilities, disrupted key supply chains, and made the U.S. defense industrial base dependent on foreign adversaries." From an official perspective, reducing the trade deficit and revitalizing the U.S. manufacturing industry are the biggest economic factors behind the current U.S. government's escalation of tariff policies.
Second, political factors. Trump and the Republican Party’s voter base is mainly blue-collar and conservative, and they are also the main victims of the loss of American manufacturing. The Trump administration uses tariffs to realize its political slogan of "Make America Great Again", which is one of its important strategies to cater to voters, fulfill campaign promises, and consolidate its vote base. At the same time, raising tariffs and trade barriers is essentially to maintain the core position of the United States in the global political and economic system and to achieve political goals through economic means.
Third, the leadership factor. From a certain perspective, the new tariff policy is not unrelated to Trump’s business background. Compared with long-term economic planning, Trump prefers to achieve short-term interests of the United States during his term and shape the political image of "America First". Therefore, he is happy to use tariffs as a "bargaining chip" in international negotiations.
2. How tariffs affect crypto mining
The release of this tariff policy immediately triggered a dramatic market reaction. On April 2, U.S. stock futures collectively plunged, and the crypto market was not spared during the collapse of the U.S. stock market. Recently, Bitcoin has fallen from $88,500 to $82,000, a drop of 3%. The decline of mainstream altcoins such as BNB, SOL, and XRP is even more tragic. In addition to the overall impact on the traditional financial market and the crypto market, the impact of the new tariff policy on the crypto mining industry deserves special attention.
2.1 Impact of the new tariff policy on crypto mining
Due to its abundant cheap energy, strong infrastructure and stronger financial strength, the United States has become the world's most important crypto mining market. According to statistics in December 2024, the United States accounts for about 36% of the global hash value, leading by a cliff, and together with Russia (16%), China (14%), the United Arab Emirates (3.75%) and other countries, it has shaped the basic pattern of the global cryptocurrency mining market. By the beginning of 2025, the United States may account for more than 40% of the computing power, or even close to 50%.
The high computing power of the United States represents a high demand for crypto mining machines, but the United States is not the main production base of crypto mining machines, but mainly obtains mining machines through imports. Therefore, in the crypto mining ecological chain, the main ones directly affected by the tariff policy are the mid- and upstream manufacturers, that is, the raw material supply, mining machine assembly and sales links. Among them, the raw material supply involves chips, materials and other parts. As the main components of mining machines, chips mainly come from Samsung in South Korea and TSMC in Taiwan, China, and related materials are mainly provided by Chinese and Southeast Asian manufacturers. Regarding the assembly of mining machines, due to factors such as labor costs, China and Southeast Asia have undertaken most of the assembly work with cheap and abundant labor. However, the above countries and regions are all included in the areas of reciprocal tariff collection, and the tariffs in Cambodia, Laos, Vietnam, etc. are even close to 50%. This huge tariff will create a lose-lose situation for American crypto miners and crypto mining machine manufacturers: on the one hand, the tariff will directly increase the import price of crypto mining machines, compress the US market of mining machine manufacturers, and weaken their profitability in the most important market. For the mining machine manufacturing industry, whose growth rate has already slowed down, this is tantamount to another heavy and lasting blow. On the other hand, this part of the tariff cost will also be shared by crypto miners in the United States, which will also greatly increase their operating pressure. Especially considering that since the price of Bitcoin has continued to fall from the high of $100,000, all kinds of cryptocurrencies have continued to fall, and the profit margins of various crypto miners have been significantly reduced. Once the price of mining machines rises, some crypto miners may face a situation where they cannot make ends meet and are forced to shut down their mines. Furthermore, if the number of miners as blockchain nodes is reduced too much, the processing efficiency and security of the blockchain will also be threatened, which will fundamentally have a negative impact on the entire crypto industry.
2.2 Exemptions and uncertainties
There are several exemptions to the reciprocal tariff policy, especially for some semiconductors and US-made products, but these are difficult to apply to the crypto mining machine manufacturing industry. First, the Trump administration uses the Harmonized Tariff Schedule (HTS) system to correspond different products to different customs codes to specify the tariffs applicable to specific products. The annex announced by the administration that is not subject to the new tariffs only lists a small number of HTS codes in the semiconductor field, and the chip models currently required by mainstream mining machines are not included. Second, according to the so-called US content rule, if the US-made product components account for more than 20% of the value of the whole machine, they can theoretically constitute "US content" and be exempt from the reciprocal tariff. However, the United States has not been the main production base of crypto mining machines. Whether it is chips, other components or assembly, they are all completed in the areas subject to tariffs. Therefore, it is difficult for crypto mining machine manufacturers to obtain exemptions through this rule.
In addition, the uncertainty of tariff policies is also worthy of attention. At present, many countries have stated that they will respond to the US tariff policy with retaliatory tariffs and other countermeasures, such as China, Australia, Canada, etc. For example, the Tariff Commission of the State Council of China announced that from April 10, 2025, a 34% tariff will be imposed on all imported goods originating from the United States, taking actual countermeasures. At the same time, some countries have a compromising attitude. Faced with high tariffs from the United States, Vietnam proposed to reduce its tariffs on the United States to 0%, and Cambodia proposed to reduce it to 5%. The leaders of both sides agreed to continue to negotiate bilateral agreements related to tariffs. After a series of political games, the implementation of tariff policies may change. According to the logic of reciprocal tariffs, if the relevant countries (especially Southeast Asia) reduce their tax rates on the United States, they may obtain certain tax exemptions, thereby reducing the impact of tariff policies on the overall crypto mining industry. This may be a glimmer of hope in the short term in the bleak outlook.
3 Ways to break the deadlock: How should the crypto mining industry respond?
3.1 Failure of traditional coping strategies
In terms of dealing with tariff barriers, the effectiveness of traditional trade diversion strategies may be much less than before. After the start of the Sino-US trade war in 2018, Chinese companies have re-exported or transferred production capacity through Southeast Asian countries such as Vietnam and Thailand to reduce the adverse effects of tariffs, and the same is true for the mining machine manufacturing industry. However, the scope of the "reciprocal tariff" policy this time is different from the past. It can be said to be a global tax increase. The Asia-Pacific region, as an important place for capacity transfer, is almost "annihilated", and it has become particularly difficult to bypass other regions not affected by tariffs. As for the practice of mining machine manufacturers directly underreporting the price of mining machines when declaring customs to reduce tariff expenditures, there is a greater compliance risk. Once verified, they may face high fines or even criminal risks.
As the world's largest mining market, the United States has a large number of crypto miners and corresponding demand for mining equipment. Since Trump's new tariff policy has added more production costs to American crypto miners, can not buying mining machines and mining in the United States become a viable survival strategy? After all, before China's mining ban in 2021, more than two-thirds of the world's crypto mining activities had gathered in China, and the migration of crypto miners from China to the United States has shown that there is no absolute path dependence in the crypto mining industry. In fact, there are pros and cons to choosing to deploy crypto mining farms in other countries or regions. Among them, the most direct benefit is to avoid the risk of Trump's tariff policy. In terms of disadvantages, first, companies need to bear the additional uncertain risks of mine relocation and reconstruction; second, because the United States has abundant electricity resources, not mining in the United States and using high-priced electricity or adopting production models such as computing power leasing will make miners lose their economic cost advantages; third, most importantly, the United States has a friendly regulatory attitude, a good rule of law environment and a prosperous crypto market, which can greatly guarantee the stability and sustainability of the crypto mining industry and reduce the black swan risks brought about by policy uncertainty.
3.2 Some countermeasures worth exploring
In addition to hoping that Trump will "change his mind" and adjust the tariff policy for specific regions, crypto miners and crypto mining machine manufacturers may also seek countermeasures from the following two aspects:
First, crypto miners can turn their attention to the second-hand mining machine trading market. Tariffs involve import and export issues. There is no need to pay tariffs for second-hand mining machine transactions in the United States. Miners can quickly deploy mining farms and meet the current computing power growth needs by purchasing second-hand mining machines. However, the price of second-hand mining machines fluctuates greatly and is highly non-standard. At the same time, the performance of second-hand mining machines is relatively backward and may not be able to meet mining needs.
Second, crypto mining machine manufacturers can study and use the "U.S. content" rules to produce mining machines that meet the conditions for tariff exemption. As mentioned above, considering that Trump's current term has just begun and the political purpose of tariffs, the U.S. tariff trade barriers may last for several years. At this time, short-term circumvention measures may not work, and long-term compliance measures need to be considered. Unlike traditional rules of origin, the 20% "U.S. content" threshold set by this tariff is intended to lower the threshold for manufacturing to return to the United States and encourage foreign companies to transfer high value-added links (such as research and development, core component production) to the United States. Under this rule, regardless of other factors and risks, crypto mining machine manufacturers can seek alternatives to high-tariff components such as chips in the United States, or separate IP companies and manufacturing companies to increase the U.S. content of mining machines. For example, foreign crypto mining machine manufacturers can cooperate with U.S. semiconductor manufacturers to develop mining machine chips, or purchase chip modules that are packaged and tested in the United States (such as TSMC's Arizona factory), so as to include chip costs in the U.S. origin value, increase the proportion of U.S. content in mining machines, and thus avoid tariffs. For example, one could try to set up a technology holding company in the United States, hold core patents such as mining chip design and algorithms, and then authorize foreign crypto mining machine manufacturers to produce chips and mining machines. However, this plan has certain tax risks and needs to be further evaluated when it is used in specific situations.
