In continuation of President Trump’s protectionist laws, Chinese goods are taxed steeply when imported into the US. The latest victim of this economic policy has been crypto mining gear manufactured in China, by the world’s number one mining hardware manufacturer Bitmain.

The result of these unexpected financial expenses, read tariffs, has impacted the Initial Public Offering (IPO) by two other mining machine makers – Canaan and Ebang International.

According to the Office of Trade, in June the classification of Bitmain made Antminer s9 was changed from “data processing machine,” to that of “electrical machinery apparatus” which resulted in 2.6% tariff jumping to an unprecedented 25% tariff increase, resulting in net taxes payable at 27.6%.

Meanwhile, the Chinese manufacturers are exploiting every rule in the book to escape Trump’s expensive taxes. As early as September, Bitmain applied for listing on Hong Kong’s bourses hoping to raise nearly $3 billion in funds.  Besides, Canaan and Ebang International are also applicants at Hong Kong.

The continued US-China tariff war has resulted in many projects and mining activities being opened in the United States.

Industry observers predict that the tariff change is likely to impact Bitmain the most, allowing competitors to gain from it.  Sale of mining hardware accounts for 94% of the total revenue earned by Bitmain. It’s Antminer S9 is part of the product portfolio that Bitmain manufactures in the Application Specific Integrated Circuit or ASIC category.

The sale of AS 9 recorded 51% and 51.8% revenue in fiscal 2016 and 2017 for the company. However, with advancing technology, Bitmain is losing its competitive edge and newer players such as GMO as well as Canaann are seen introducing newer chip-based products, and mining machines that are faster, powerful and more efficient.

Hence, for Bitmain it could well spell the end of an era of dominance in crypto mining hardware, felled by twin blows. First is the high US tariffs and the second is the newer mining hardware made by peers, running on chips.

The post Trump Blows the Lid-Off IPO Plans by Slapping High Taxes on Beijing’s Mining Hardware appeared first on ZyCrypto.

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