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Forbes
14-05-2025
- Business
- Forbes
'Huge Blow': Bitcoin Miners Push Back Against Trump Tariffs
Bitcoin mining companies are bracing for fallout from Trump's global tariff rollout, a move that will increase costs on imported hardware and potentially stonewall the industry's growth in the United States. The Digital Energy Council, an advocacy group that represents the data center, bitcoin mining, and energy sectors, has submitted a comment to the United States Department of Commerce requesting that officials exclude ASIC miners – specialized computers used exclusively to mine bitcoin – from the tariffs, a benefit afforded to other computing devices like laptops and smart phones. The Digital Energy Council responds to Trump tariffs for bitcoin mining with official comment to the ... More Department of Commerce In the meantime, though, no exemption exists for ASIC miners, so U.S. bitcoin mining companies are bracing for an increase to their capital expenditure costs for ASIC miners and other critical bitcoin mining infrastructure. Hashlabs CEO Jaran Mellerud wrote that the tariffs could 'have enormous implications for the entire bitcoin mining industry.' Mellerud argues that the tariffs could dampen demand for ASIC miners in the United States, which currently houses more bitcoin mining activity than any other country. If U.S.-based mining demand wanes, then an ensuing glut of ASIC miner manufacturer supply 'could paradoxically drop [prices] 'This is a big deal. When we saw this news, we immediately had a war room,' said Luxor COO Ethan Vera. Luxor provides software and services for the bitcoin mining industry, which includes ASIC brokerage and trading services. 'We think this is a big blow to the American mining industry and it's certainly going to stagnate growth in the industry if these tariffs continue,' he added. Vera also said that bitcoin miners were rushing in the first week of April to charter air freight to the United States in an effort to front run the tariffs' implementation. Vera said that Bitcoin miners were paying 2-4x the usual air freight rates to expedite shipments ahead of April 9, 2025, the effective date for the Trump administration's original reciprocal tariff schedule. Some of these flights were upwards of $3 million. But then Trump reversed course, partially invalidating these efforts. The administration paused its original reciprocal tariff schedule on April 9 for a 90 day period, instituting instead a flat 10% tariff rate on more than 180 countries as the U.S. government opened negotiations with trading partners. Since then, officials have made headway with a handful of countries. They brokered a deal on May 12 with China that dampened the superpower's own retaliatory tariffs, reducing for 90 days the United States' 145% tariffs on China to 30% while China reduced its tariffs on U.S. goods from 125% to 10%. Still, all this prevaricating and negotiating may be little more than a consolation prize for miners, who must still stomach a 10% duty on critical equipment – and potentially higher duties once the 90-day pause lapses in July. The two largest bitcoin mining computer manufacturers, Bitmain and MicroBT, assemble the vast majority of their machines in Malaysia, Thailand, and Indonesia. Ironically, these companies offshored their manufacturing capacity in 2018 in response to Trump's tariffs against China in his first term. Adding to the tariff burden, many miners also tap China for the electrical and network equipment needed to operate their bitcoin mining sites. Publicly traded bitcoin miners alone spent over $3.6 billion in 2024 on property, plant, and equipment, which includes ASIC miners. Beyond bitcoin mining computers, the tariffs will increase capital expenditure (CAPEX) costs for raw materials needed to build and expand bitcoin mines, including aluminum, shipping containers (often used to house bitcoin mining computers), and other raw building materials; electrical infrastructure like transformers, power distribution units, and switch gears; and networking materials like ethernet cables and routers. The tariffs are a tough pill to swallow for an industry that, in general, warmly embraced President Trump along the campaign trail. Trump courted the bitcoin and crypto industry during the election, promising to reform certain policies from the U.S. Securities and Exchange Commission – such as SAB 121, which effectively barred banks from holding crypto assets – and putting a stopper in President Biden's 'war on crypto' by ending Chokepoint 2.0, an unspoken mandate to financially maroon cryptocurrency businesses. Trump upheld most of his pro-crypto campaign promises. But he also said that he wants to make the U.S. 'the crypto capital of the planet and the Bitcoin superpower of the world' and for 'all the remaining Bitcoin to be MADE IN THE USA!!!" The tariffs will make the second half of that pledge harder to manage. They could ultimately make the U.S., which currently houses 36% of Bitcoin's global computing power according to Luxor estimates, an uncompetitive market in the short-to-medium term. Coincidentally, the tariffs will also impact the latest business venture from President Trump's sons, Eric Trump and Donald Trump Jr. The two brothers recently rebranded their company American Data Centers Inc. to American Bitcoin, inking a deal with public bitcoin miner Hut 8 to integrate with the company as a subsidiary. Hut 8 has allocated all of its self-owned bitcoin mining capacity in exchange for an 80% stake in the subsidiary. America Bitcoin is gunning for a public listing on the Nasdaq via a reverse merger with Gryphon Digital. Despite the doldrums, there may be hope yet for the bitcoin mining industry if they can convince the Trump administration to classify ASIC mining computers under the same tariff code as other computers. The Trump administration announced that it will exempt certain computing equipment from its tariff schedule, namely desktops, laptops, smart phones, semiconductors, and similar devices. But that won't include ASIC mining computers. They are classified separately from other computers under the Harmonized Tariff Schedule of the United States. The Digital Energy Council is pressing the Department of Commerce to reclassify ASIC miners so that they can benefit from the exemption awarded to other computing equipment. The organization argues that exemption is only fair since ASIC miners are, strictly speaking, computers. It also argues that the exemption is a national security issue, and that the tariff policy directly contradicts the Trump administration's stated goal to nurture the United States' bitcoin mining industry: Time will tell if this effort is fruitful. As of publication time, the Department of Commerce has not responded to the Digital Energy Council's comment.
Politico
13-05-2025
- Business
- Politico
Trump, crypto, energy: Glued at the hip
The Trump family's fortune and the nation's energy future became more deeply entangled this week when the president's sons announced they plan to take their cryptocurrency company public. American Bitcoin's move marks the family's latest foray into the same energy-guzzling digital mining sector that Donald Trump has worked to boost, writes Jason Plautz. The move not only raises conflict-of-interest concerns — a near-daily feature of the Trump administration — but also expands the family's stake in the U.S. electricity business. The success of data centers that mine crypto and power artificial intelligence is wholly dependent on their operators' ability to secure a gargantuan amount of electricity to run them. Whether that power comes from clean sources or fossil fuels could significantly shape the nation's output of planet-warming pollution. Trump has pursued policies to burn more fossil fuels. But keeping ancient coal-fired power plants online is not enough to meet the expected boom in energy demand. For months, electric grid operators have frantically planned for a future where too little power exists to run these data centers while keeping the lights on in homes, hospitals and office buildings. 'Energy and technology are only growing to be more hand in glove and whoever has the access to energy is going to be the leader in technology,' Tom Mapes with the Digital Energy Council told Jason. American Bitcoin — backed by Eric Trump and Donald Trump Jr. — will operate out of sites already outfitted with ample electricity. They are run by Hut 8, a bitcoin mining company that specializes in energy infrastructure. That's a major coup when you're competing with tech giants whose operations can consume as much power as a medium-sized city. Also helping is the Trump administration. While the Biden administration took a hesitant approach to crypto mining, Trump has done 'a complete 180,' Erran Carmel, a technology professor at American University, told Jason. The president has pushed to speed permitting and bypass environmental rules to build data centers and fossil fuel power plants to run them. The Energy Department has a plan to help private companies build such centers on public lands. 'If crypto is going to define the future, I want it to be mined, minted and made in the USA,' Trump said at an industry conference in July. American Bitcoin isn't the Trump family's only investment in crypto. Trump and his sons launched a crypto firm called World Liberty Financial, which offers its own digital coin and poses huge conflict of interest risks. The family also has a $TRUMP meme coin. White House press secretary Karoline Leavitt dismissed the notion that Trump's family stake in crypto could pose a conflict of interest, saying Trump 'acts in the best interests of the American public.' It's Tuesday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@ Today in POLITICO Energy's podcast: Thomas Frank breaks down the leadership shake-up at the Federal Emergency Management Agency after its acting chief was fired and replaced by an official with no disaster response experience. Power Centers 'Shock and awe': Trump's mining blitzTrump is driving a 21st-century gold rush that's supercharging conservation battles on public lands across the West, write Hannah Northey and Michael Doyle. While individual conflicts grab day-to-day attention, it's the rapidly growing cumulative total that's astonishing even longtime environmental activists concerned about the effect of mining coal and critical minerals on wildlife and federal land. Republicans' gambit to kill climate programsHouse Republicans want to use their sprawling budget reconciliation bill not only to zero out climate programs, but also to make it harder for subsequent Congresses to restore them, writes Jean Chemnick. The House Energy and Commerce Committee's budget bill claws back Biden-era clean energy funding — and seeks to repeal the authorizing language for the 17 programs that it targets. 'I have never seen in my career any reconciliation language that would strike authorization language for a discretionary program,' said Bill Hoagland, who served as director of budget and appropriations for former Senate Majority Leader Bill Frist (R-Tenn.). Macron to Russia: Expect more sanctionsFrench President Emmanuel Macron said that the European Commission is readying a new package of sanctions against Russia 'in the coming days' in cooperation with the United States, writes Clea Caulcutt. Macron said if Russia does not agree to a ceasefire in Ukraine, the next package of sanctions would target 'financial services, and oil, on secondary sellers.' In Other News Hurricane fallout: Insurance adjusters will testify before Congress that they were pressured to cut payouts after hurricanes. Un-deleted: Facing a lawsuit, the U.S. Agriculture Department says it will restore climate-change-related webpages. Subscriber Zone A showcase of some of our best subscriber content. Trump has unveiled a plan for Saudi Arabia to invest $600 billion in U.S. industries — including critical minerals, artificial intelligence and energy — after touching down in Riyadh as part of a broader Middle Eastern tour. Natural disasters and human conflict forced a record 66 million people to flee within their own countries last year, and the United States led all nations with 11 million of these internal displacements. The Interior Department will shorten the time it takes to review land parcels for potential oil and gas leases to six months. That's it for today, folks! Thanks for reading.
