Bitmain and other Chinese manufacturers of cryptocurrency mining equipment likely will suffer from U.S. tariffs.
According to an article in the South China Morning Post, Bitmain, whose business depends heavily on the U.S. market, could be hardest hit. The company is reportedly on target to generate $10 billion in revenue this year and has filed to list stock on the Hong Kong Exchange.
Bitmain raised $400 million in pre-IPO funding during the summer.
In its IPO prospectus, the company said it had more than 80,000 clients at the conclusion of its first six months in 2018, up from about 6,000 in 2015. Overseas markets accounted for 51 percent of Bitmain’s business in 2016 and 2017.
The U.S. Trade Representative reclassified Chinese crypto-mining equipment as electrical machinery, subjecting these products to a 27.6 percent tariff, the South China Morning Post article said. Mining equipment had previously not been subject to a tariff.
Chinese mining equipment companies Ebang International and Canaan also are likely to suffer from the tariffs, although the U.S. market has been less crucial for their businesses. Both those companies have also filed applications for Hong Kong stock listings.
U.S. tariffs have affected more than $200 billion in Chinese imports.