Donald Trump’s Trade Barriers Set to Hit Cryptocurrency Company Bitmain Hard

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Steve Anderrson
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain. Join the official channel of thecoinrepublic, For the latest news updates: https://t.me/thecoinrepublic

Beijing-based Bitmain filed for an IPO in Hong Kong last month, seeking to raise a reported $3 billion. Canaan and Ebang International have also filed also filed to be listed on the Hong Kong stock exchange.

Both companies are also affected by the new tariff regime, with Canaan reportedly earning 8.5 of its 2017 revenue from overseas sales and Ebang’s overseas sales figures accounting for 3.8 percent of its 2017 revenue. Nevertheless, they have not invested nearly as much in overseas expansion as Bitmain has in recent months.

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 is seen by analysts as the cryptocurrency mining hardware firm with the most potential exposure to US trade barriers.

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.

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.”

Bitmain earlier reported in its prospectus that its financials could be affected by tax rate changes “due to economic and political conditions.”

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