Mining Hardware Firms Among The Chinese Manufacturers Affected By Donald Trump’s Sanctions

U.S President Donald Trump’s trade tariffs will likely be a major problem for Chinese mining hardware manufacturers since their products will fall under the category of sanctioned Chinese products.

A Chinese publication known as the South China Morning Post (SCMP) reported on Tuesday that the U.S sanctions imposed through Trump’s trade tariffs will affect Chinese mining hardware manufacturers. The report revealed that analysts are convinced that the new tariffs will reduce the profitability of major Chinese hardware mining manufacturers who target the U.S market.

“All manufacturers of mining rigs based in China will likely be affected by the tariff code change and, in turn, captured by the U.S. trade tariff,” stated Ben Gagnon.

Gagnon is the founder of Lutech, a Chinese firm that makes Bitcoin (BTC) mining hardware. Analysts expect Beijing-based mining hardware manufacturer Bitmain to be the most affected by Trump’s the new tariff regime. This is because the U.S market makes up a significant share of its market.  Bitmain made 51 percent of its revenue from overseas sales in 2016 and 2017. It is not clear what revenue percentage Bitmain made from the U.S market alone.

Strict tariffs will, therefore, disrupt the company's revenue figures. Ebang International and Canaan are some of the other Chinese companies that will be negatively affected by the new tariff regime in the U.S. However, unlike Bitmain, the two Chinese cryptocurrency mining hardware manufacturers do not rely on revenue from foreign markets as much.

Trump’s new trade tariffs are a threat to Bitmain because it might be surpassed as the top cryptocurrency hardware manufacturer globally. The tariffs will likely pave the way for U.S GPU manufacturers such as Nvidia and AMD to shine once more or perhaps even usher in new mining hardware manufacturers in the U.S.

So far the new U.S tariffs will affect more than 250 Chinese products. The tariffs will make it more expensive to import hardware manufactured in China. The new tariff regime is part of President Donald Trump’s to promote locally produced hardware.

Although Chinese manufacturers are facing more pressure due to the new tariff regime, this does not necessarily mean that they cannot continue to enjoy strong profits. They will now have to focus their attention on other major markets where their mining hardware is in demand. They should also continue to make better mining hardware to boost their attractiveness.