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By: Mohamed Allam

Tariffs, tariffs, and some more tariffs. That is the talk of the town lately. If you turn on the TV, scroll Twitter, or even just grab coffee, it is all tariffs. Everyone is suddenly a trade expert.

Look, I took a few economics classes at UChicago, but I am no macro policy expert. I will leave the trade balance analysis and game theory to the academics. What I do know is crypto, and more specifically, Bitcoin mining. So let us talk about how these new Trump era tariffs might affect BTC.

Trump’s proposed plan includes a 60% blanket tariff on Chinese imports and up to 245% on certain categories. Big numbers. Big headlines. But here is the nuance that most people are missing: not all electronics are being hit. In fact, storage cards, modems, diodes, semiconductors, and other critical electronics are explicitly excluded from the tariff list.

Why does that matter for BTC? Because ASIC miners, the machines that power Bitcoin mining, are basically just ultra-specialized computers built out of, you guessed it, semiconductors. 

To break it down further:

An ASIC (application specific integrated circuit) is a chip designed to do one thing really well. In this case, that one thing is solving Bitcoin's SHA256 algorithm. These chips are made using MOS (metal oxide semiconductor) technology, which is the standard for most modern electronic devices. If you are using a computer, a smartphone, or any AI hardware, you are using MOS-based chips.

So here is the deal. Since semiconductors and related components are exempt from the proposed tariffs, Bitcoin mining gear, especially the most important parts, should not see a direct cost increase due to these new rules. Yes, there might be minor shifts in supply chain dynamics or material costs, but nothing that should break mining economics or suddenly make US based mining operations unfeasible. 

As we discussed in a previous newsletter, “China’s Love Affair With Bitcoin,” China’s dominance in ASIC manufacturing is still very real. But it is also too valuable and entrenched for the US to risk cutting off, especially since semiconductors are the lifeblood of not just crypto but AI and national infrastructure. If anything, this exemption feels like an acknowledgment of that fact.

So, TLDR: ASICs are safe. BTC mining is safe. Tariffs are noise, at least for semiconductors.

Just another reason to stay bullish on Bitcoin. 

Note: In this case, miners will likely be fine. However, I cannot help but notice that writing this piece has brought about an interesting take on how to potentially kill BTC using the supply and demand of miners. Let us say miners get very expensive and mining operations start running at a loss. Then the only people left to mine BTC would be state owned, potentially skewing the mining rate toward the 51 percent rule required to make changes to Bitcoin. But that is just a thought. He who controls the miners controls the future of BTC.

That’s all for today, folks! As always, connect with me on LinkedIn if you have ideas or suggestions for future newsletters. If you have any opinions on this article be sure to let me know. Until next time!