Recent tariffs imposed by President Donald Trump on imports from Canada, China, and Mexico are expected to have varying impacts on the cryptocurrency mining sectors in these countries.
U.S. and China
The U.S. has announced a 25% tariff on Canadian and Mexican imports and a 10% tariff on Chinese goods, effective Feb. 1, 2025, according to the Associated Press.
While these tariffs primarily target traditional industries, the cryptocurrency sector may experience indirect effects.
Here’s why: Most U.S. mining hardware is imported, making miners vulnerable to changes in trade policies or tariffs affecting these key suppliers.
And increased costs of imported mining hardware could lead to higher operational expenses for U.S. miners who primarily source their gear from international suppliers. Bitmain and Canaan are based in Beijing and Hangzhou, China, respectively. They are the largest manufacturers of ASIC (Application-Specific Integrated Circuit) miners and GPUs (Graphics Processing Units).
Hsinchu-based Taiwan Semiconductor Mfg. Co. produces semiconductor chips used in mining rigs, which are sourced by companies like Bitmain.
MicroBT, which is based in Shenzhen, China, has a U.S. segment that produces mining hardware domestically. Therefore, the company — which partnered with Riot Platforms Inc. and manufactures miners at a facility in Pittsburgh, Pennsylvania — could potentially avoid certain import tariffs on Chinese-made products.
Canada and Mexico retaliate
Canada has been a significant player in global Bitcoin mining, with its share of the global hash rate varying over time. As of September 2023, Canada reportedly accounts for about 7% of the global Bitcoin mining hash rate.
In response to U.S. tariffs, Prime Minister Justin Trudeau said he would “not back down in standing up for Canada” and implemented a 25% tariff on American goods. per the BBC.
Mexican President Claudia Sheinbaum also announced retaliatory tariffs on Saturday, Feb. 1, in response to Trump’s imposing a 25% tariff on all goods from Mexico.
While expressing a desire for dialogue over confrontation, Sheinbaum stated that Mexico had no choice but to retaliate in kind as tensions between the two countries escalated into a trade war.
“I’ve instructed my economy minister to implement the plan B we’ve been working on, which includes tariff and non-tariff measures in defense of Mexico’s interests,” Sheinbaum posted on X.com.
According to Horizon Grand View Research, Mexico’s cryptocurrency mining hardware is expected to reach a projected revenue of $99.9 million by 2030.
In summary, while the direct impact of tariffs on cryptocurrency mining in these countries may be limited, the broader economic effects and increased costs for imported equipment could influence the sector.
The full extent of these impacts will depend on the duration of the trade dispute and whether or not it resolves. Until then, it appears the value of Bitcoin (BTC) is taking a hit. See the chart below.
