[Correction] U.S. Hikes ASIC Tariffs to 27.6%, Shaking Bitcoin Miners

• U.S. tariffs raising ASIC import costs to 27.6%, squeezing miners.
• Shift in machine flows benefiting Ethiopia amid rising U.S. costs.

The U.S. has stiffened tariffs on Bitcoin mining rigs from China, with new rates taking effect on June 15, 2024, The Block reported. This action imposes a 25% Section 301 tariff on Application-Specific Integrated Circuit (ASIC) mining equipment, bringing the total import tax on rigs from Indonesia, Malaysia, and Thailand to 27.6%. The move significantly raises costs for domestic mining operations.

Ethan Vera, COO of Luxor, a mining technology firm, said these tariffs make the U.S. one of the least competitive markets for importing Bitcoin mining hardware. ASIC rigs from China are still subject to an even higher tariff of 25%. The elevated costs have curtailed U.S. miner demand. Consequently, countries with more favorable import policies, such as Ethiopia, are benefiting.

In response, some U.S. firms are transitioning to domestic production. For instance, CleanSpark is facilitating partnerships to establish onshore manufacturing of ASIC mining rigs. The company aims to offer U.S. miners locally produced options at more affordable prices. This strategy could mitigate some of the cost pressures from the tariffs.

Used ASIC mining rigs already within the U.S. are seeing rapid price appreciation. With fewer new machines entering the domestic market, local demand is increasingly focusing on this existing equipment.

However, despite rising hardware costs, some companies see potential to offset the challenges. China-based BitFuFu noted that access to America’s inexpensive and renewable energy sources could still make mining viable in the U.S.

Industry advocates are lobbying for regulatory exemptions to remove Bitcoin mining-specific ASICs from these tariffs. The government already applies similar exemptions to other types of computer-related imports. These groups argue that lifting the tariffs would ensure the U.S. remains competitive in the global hash rate distribution. They also argue it would enable more sustainable growth in the domestic mining sector.

Meanwhile, global competitors to the U.S. mining industry are seizing the opportunity. Countries such as Ethiopia—with fewer trade restrictions—may gain an advantage as they can import ASIC mining rigs at lower costs. This could lead to a redistribution of mining power and influence across international markets.