China’s updated “Unreliable Entity List” — a list of American companies banned from doing business in China in retaliation for President Donald Trump’s tariffs — has grown to include eleven U.S. drone manufacturers.
The drone industry is heavily reliant upon materials imported from China.
The drone companies blacklisted by China include Brinc Drones, Domo Tactical Communications (DTC), Firestorm Labs, HavocAI, Insitu, Kratos Unmanned Aerial Systems, Neros Technologies, Rapid Flight, Red Six Solutions, Skydio, and Synexxus.
China’s Ministry of Commerce (MOFCOM) said the banned companies “engage in activities that may endanger China’s national security and interests.”
More specifically, MOFCOM complained that the American firms “have either participated in arms sales to Taiwan or have undertaken so-called military technology cooperation with Taiwan, seriously harming China’s national sovereignty, security, and development interests.”
The regime in Beijing accompanied its blacklist with a white paper called “China’s Position on Some Issues Concerning China-U.S. Economic and Trade Relations,” which purportedly made the case that “unilateralism and protectionism in the U.S. has significantly impeded the course of normal economic and trade cooperation between the two countries.”
The Chinese paper fumed against Trump’s “America First” policies as “a blatant infringement on the development rights of other nations” and “a selfish and short-sighted approach that will ultimately backfire.”
“The logic behind ‘America First’ is rooted in unilateralism and power politics, attempting to reshape the rules of globalization through tariffs, technology blocks, and industrial decoupling. In essence, it is a crude violation and systematic deprivation of the universal development rights of all nations,” the paper railed.
The actual reason China targeted drone companies was Chinese dominance in producing several components and materials critical for manufacturing unmanned aerial vehicles (UAVs), including the batteries that power the drones and rare earth minerals for their electronics. Beijing clearly saw the drone industry as a weak spot in America’s trade war armor. Some of the blacklisted drone companies have already begun notifying customers about shortages of drone batteries.
“This action makes clear that the Chinese government will use supply chains as a weapon to advance their interests over ours. The drone market has historically been dominated by Chinese companies who are now rapidly losing market share to Skydio and our Western peers,” said Adam Bry, CEO of blacklisted drone maker Skydio.
“This is an attempt to eliminate the leading American drone company and deepen the world’s dependence on Chinese drone suppliers,” Bry charged.
China has flexed its drone supply muscles before. In December, Chinese manufacturers began limiting shipments of UAV motors, batteries, and flight controllers to the United States and Europe, without even bothering to concoct the justifications offered in this week’s MOFCOM white paper.
China also targeted U.S. drone makers for sanctions in December, once again on the grounds that they were compromising China’s national security interests by doing business with Taiwan. Security analysts also suspected Beijing was doing a favor for its partners in Moscow by making it harder for Western countries to supply Ukraine with drones.
Drone makers have been looking for alternate supply lines ever since December, correctly suspecting China would lean even harder on the industry. China controlled about 80% of the commercial drone market when this hunt for alternatives began.
Taiwanese officials have offered to take up some of the slack, pointing out that their top drone manufacturing companies are already making do without supplies from China. Taiwanese companies are eager to prove themselves more reliable partners than their Chinese competitors.
The U.S. has banned a few Chinese drone companies from doing business in America, notably a company called DJI that was accused of violating the Uyghur Forced Labor Prevention Act (UFLPA) by using forced labor from the oppressed Uyghurs. The company denied these allegations.
