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A U.S. Trade War With China Might Affect Bitcoin Miners

Last Updated March 4, 2021 4:52 PM
Justin OConnell
Last Updated March 4, 2021 4:52 PM

President-elect Donald Trump often decried how China sucked jobs out of the U.S. and he offered up the solution of prosecuting trade cases against China for its “unfair subsidy behavior” and currency manipulation. He suggested tariffs as high as 45 percent on its exports.

“We can’t continue to allow China to rape our country, and that’s what they’re doing,” he told supporters in May.

“We have the power over China, economic power, and people don’t understand it,” Trump also said  during the campaign.

If Trump pursues a such path, then China would fight back – it’s even said so itself. It would move China closer to a regional ally, Russia. Russia’s anti-Bitcoin stance could spread to China’s leaders, who could crack down on China’s Bitcoin miners (70% of Bitcoin transactions go through four Bitcoin miner pools) and currency traders, as it has already pledged to do earlier this month.

A Russian lawmaker put forth the notion  in 2015 that Bitcoin is part of a US plot to undermine Russia. “All these cryptocurrencies [were] created by US intelligence agencies just to finance terrorism and revolutions.” Bitcoin miners might suffer. U.S. corporations definitely would suffer.

“China will take a tit-for-tat approach then,” wrote the Chinese government-published Global Times Nov. 13.

This means likely that U.S. corporations will face the brunt of China’s reaction, and that could prove to be bad for the stock market and U.S. dollar, which then could put pressure on safehavens like gold and silver, and one might reasonably assume, give Bitcoin reason to continue its performance to date – that is, as the best performing asset of 2016. As the Global Times  outlines, American autos, iPhones and soybeans and corn could be halted.

Companies that could be hurt by a trade war with China includes Starbucks, Boeing and Apple to name a few, have placed huge bets on China.

The notion of a trade war has graced headlines since Mr. Trump became president-elect, though in various other areas his rhetoric has cool, albeit his appointments have caused controversy. If he doesn’t soften his stance towards China, it’s likely there would be big blowback.

“If the U.S. imposes high tariffs on Chinese imports, then the smart move for China is to retaliate. China is too big to be bullied in this way,” David Dollar, the U.S. Treasury Department’s former financial emissary to Beijing, wrote recently on China File .

Images from Shutterstock.