The U.S.-China trade war could begin taking casualties in the cryptoasset industry, as a change in the U.S. classification of application specific integrated circuit (ASIC) miners could increase tariffs significantly for Chinese producers.

The South China Morning Post (SCMP) has reported that a change on August 28 of the classification of ASICs could hike import duties on ASIC miners from 2% to 27%. Hopes have recently been doused that cooler heads would prevail in the largely Trump-initiated conflict, which has flouted previous conventions of addressing trade grievances through the World Trade Organization (WTO).

Bitmain could be the worst hit of Chinese producers, as it has the highest proportion of foreign exports. Bitmain’s IPO filing, released last month, revealed that 62.8% of the Beijing-based company’s total revenue during the first half of 2018 came from overseas sales – although this data did not specify how much came from U.S. sales specifically. The vast majority of Bitmain’s revenue comes from ASIC production, about 94%.

The SCMP reports that Bitmain competitors Canaan and Ebang have drastically lower overseas sales proportions, suggesting they will be less vulnerable to tariffs.

Bitmain is well aware of the risks to its business model entailed by overseas sales, citing specifically in its IPO filing “governmental policies favoring domestic companies in certain foreign markets or trade barriers including export requirements, tariffs, taxes and other restrictions and charges”, in particular “the worldwide populism trend that call [sic] for protectionism trade policy and potential international trade disputes”.

This new threat to Bitmain’s business model comes at a bad time for the compnay. Details revealed in the IPO filing showed that the company’s profits fell precipitously in Q2, along with the general tumble in cryptoasset prices since January. Depite an impressive $1.1 billion profit in Q1, Q2 turned a loss of around $400 million.

Many have speculated that the IPO is an emergency measure to plug hemorrhaging profits, amid falling cryptoasset prices and increasing competition.

Jihan Wu, one of Bitmain’s founders, has been a well known supporter of the Bitcoin fork, Bitcoin Cash. The fact that the company holds a significant quantity of the altcoin has been seen by some as a liability.