As the 2018 China-United States trade war has entered a red-hot stage, the Chinese cryptocurrency mining giant Bitmain is facing new tariffs of its overseas markets since August 23.
According to the South China Morning Post, Bitmain would become the most exposed among Chinese mining hardware manufacturer to US barriers. Other mining giants that have their overseas business heading to the US, for example, Cannaan and Ebang International have been influenced by the new US tariffs as well. Their IPO plans also encounter obstacles due to this issue.
Bitmain’s Antminer S9 were previously classified as “data processing machine” with zero tariffs. However, the office of the United States Trade Representative has categorised Antminer S9 as the “electrical machinery apparatus” which is subject to 2.6% tariff in this June.
At present, Chinese mining hardware makers are facing the 27.6 per cent tariffs of their US exports as Chinese goods are all subject to the additional 25% tariffs which took effect in August.
It would be a hard time for Bitmain as over 50% of its revenue is from overseas market according to Bitmain’s public financial statement. Meanwhile, Canaan and Ebang International reported their overseas sales contributed to 8.5% and 3.8% of their total revenue in 2017 respectively.
It was also reported that, Bitmain’s Antminer S9 accounted for over half of the company’s $2.5 billion revenue in 2017. The US tariffs would make the Chinese mining equipments less competitive in the global mining hardware market.
In the IPO financial statement, Bitmain has indicated that their financial situation could be impacted by economic and political conditions. This time, the significant change in the US tariffs could be seen as one of those issues.
In addition, Bitmain is also under high pressures of producing more advanced chips to keep its dominance in the mining world while its rivals are rolling out miners that are faster and more efficient than its Antminer S9.
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