18 October 2018
Major crypto mining hardware giants, such as Bitmain, Ebang, and Canaan, could fall into the U.S. imposed sanctions on Chinese goods, South China Morning Post reported on October 16th.
Analysts believe these sanctions could impact China’s mining hardware industry, as mining rigs were put under more strict tariffing by the US Trade Representative (USTR).
The Trump administration has increased tariffs for over 250 import goods from China. Bitmain’s Antminer S9 has been classified as an “electrical machinery apparatus,” which means it will get 2,6 percent import tariff. Additional taxes were introduced in August, meaning $267 billion worth of Chinese goods saw up to 25 percent increase in tariffs.
These increases are resulting in hardware manufacturers facing a 27,6 percent tariff, versus 0 percent before the sanctions. Bitcoin mining hardware company LuTech’s co-founder Ben Gagnon stated that all mining rig manufacturers ,who develop their business in China, would be affected by the import tariffs.
The biggest loser from the sanctions will be Bitmain, with reported 51,8 percent overseas sales and revenue. These numbers can be seen in Bitmain’s pre-initial public offering prospectus.
Just moments before launching its IPO, Bitmain struggles with other problems, too. A huge part of the issues of Bitmain came from the decision to invest a massive amount of their funds in Bitcoin Cash which is steadily losing ground. The other major obstacle is the denial of SoftBank and the Chinese IT giant Tecent to participate in Bitmain’s IPO. China’s top hardware mining rigs producer is planning to raise between $3 billion and $18 billion.