Twelve minutes after midnight on April 8, a Boeing 777-300ER barreled down a runway at Singapore Changi Airport. In its belly, it carried precious cargo: 3,000 kilograms of specialized bitcoin mining equipment bound urgently for New York.
As the plane took to the sky, staff at US-based Luxor Technology could begin to relax. The company, which trades bitcoin mining hardware and provides related software services, was importing the equipment on behalf of a client. The flight’s departure from Singapore was the result of a seven-day scramble to arrange transport for the $1.3 million shipment.
A week earlier, on April 2, US president Donald Trump had announced sweeping tariff hikes on goods from 57 countries, effective April 9. Luxor says it had expected to pay a 2.6 percent import duty, but suddenly, its shipment—which originated in Indonesia—stood to incur a 32 percent levy amounting to hundreds of thousands of dollars.
An untold number of businesses in all sorts of industries found themselves in the same position. Although Trump's tariff deadline has since been repeatedly delayed, most recently to August 7, the initial announcement set in motion an almighty scrap spanning practically every time zone and every link in the supply chain. To clear US customs before the April 9 deadline, importers fought over whose goods would be released earliest by manufacturers, trucks and barges to ferry cargo from warehouses to airports, passage through airport security, and limited airfreight capacity, sources say.
The sources that spoke to WIRED for this story largely declined to name their clients, suppliers, or supply chain partners for confidentiality reasons.
When the Luxor cargo left the tarmac in Singapore in time to make the cutoff, it felt to those that worked on the shipment like a narrow escape. “It was kind of like one of those movies where you get on the plane and everyone starts clapping,” says Ethan Vera, chief operating officer at Luxor. “The team was celebrating: The flight had taken off; the machines were on it.”
Tariff hikes are costly to all importers, but the US bitcoin mining industry is both particularly import-dependent and in the midst of a period of instability that already threatens to undermine profitability.
The bitcoin mining hardware market is an oligopoly dominated by two Chinese companies—Bitmain and MicroBT—which together account for an estimated 97 percent of sales. After the US imposed steep tariffs on Chinese goods during Trump’s first term, those firms moved a proportion of manufacturing to Malaysia, Thailand, and Indonesia. But under Trump’s initial tariff announcement, these countries faced tariffs between 24 and 36 percent, too.
Meanwhile, a vicious combination of other factors—steep competition, a slump in transaction fees, diminishing bitcoin rewards, surging energy demand, and so on—have strangled margins for US-based mining companies.
Under these conditions, says Vera, the additional tariff cost threatens to undermine the economics of less well-capitalized bitcoin mining operations. “On the high end, adding [more than 30 percent] to your capital expenditure really destroys unit economics for mining,” he says.