Forbes: US drone manufacturers rely heavily on Chinese parts , struggle under tariffs and sanctions
President Trump’s tariff policies, designed to reduce foreign dependency, are creating unintended complications for Pentagon drone acquisition as China imposes retaliatory measures on American companies, especially drone makers with military contracts.
22/04/2025
Illustrative image. Ukrainian drones of the Defense Forces. Photo: Ukrinform
Forbes: US drone manufacturers rely heavily on Chinese parts, struggle under tariffs and sanctions
US military ambitions to deploy thousands of drones for potential Pacific conflicts face a significant obstacle: American drone manufacturers remain heavily dependent on Chinese components, according to Forbes.
Since Russia’s full-scale war began in 2022, China has been claiming neutrality but the US and European leaders
accused the country of being “the main sponsor of war” by supplying Russia with dual-use goods that can serve both civilian and military purposes.
These include high-priority components essential for Russia’s weapons production, such as microelectronics, machine tools, telecommunications equipment, radars, optical devices, sensors, and semiconductors. Ukraine’s President Volodymyr Zelenskyy also
accused China of supplying components like gunpowder and artillery-related materials, and even claimed evidence of Chinese representatives engaged in weapons production in Russia.
This dependence creates vulnerabilities as trade tensions escalate under President Trump’s tariff policies.
The issue with drones gained public attention when Mach Industries CEO Ethan Thornton acknowledged using Chinese components in a promotional video for the company’s new military strike drone after being questioned by Anduril CEO Palmer Luckey.
Though Thornton later
told Forbes that “all final production units ship without Chinese components,” the exchange highlighted a widespread industry problem.
According to research from Drone Industry Insights UG, China currently controls 90% of the global drone market, effectively making it a monopolist at the global level.
Additionally, China produces key drone components, including airframes, batteries, radio receivers, cameras, and screens. Due to mass production and accessibility, these components are highly competitive, making it challenging to create effective alternatives.
The cost of Chinese components, which is significantly lower than alternatives from the US or European countries, is equally important. This contributes to growing global demand, including among military forces that actively use products from companies like DJI.
“We are almost completely reliant on our major adversary for them, and our ability to make them,” said Josh Steinman, who previously managed supply chain security at the National Security Council.
The dependency extends to high levels of government. When Vice President J.D. Vance attended a Marine Corps drone demonstration at Quantico, he wore Chinese-made display goggles, though military officials stated they “were not military-issued” and were provided “solely for viewing purposes.”
Security implications for the US
Pentagon officials acknowledge that this dependency poses a threat to US national security.
“China could shut [the drone industry] down globally for a year,” warned Trent Emeneker, who leads the Defense Innovation Unit team that approves drones for military use. “It’s a national security issue, not just for the United States, but for the global West.”
The Pentagon attempted to address these concerns through initiatives like Replicator, which aims to fast-track the production of affordable drones. However, manufacturers complain about excessive bureaucracy, preventing them from independently organizing production.
The Defense Innovation Unit maintains a “Blue List” of approved drones for military use, but this year, only 23 companies were approved out of more than 300 submissions.
“It’s easier to get sanctioned by the [People’s Republic of China] than it is to get on the Blue List,” said Andrew Cote, BRINC’s head of strategy and growth.
Meanwhile, China imposed sanctions on the supply of certain components that could be used in military equipment, significantly complicating the situation for American manufacturers.
Some manufacturers have already experienced disruptions. Skydio, one of America’s largest drone makers with over $850 million in investor funding, had its battery supply cut off when China imposed sanctions in October. Six months later, the company has yet to announce a new supplier.
More than a dozen other drone companies with Pentagon contracts have also been sanctioned by China, with varying impacts.
DJI
Many industry leaders and national security experts believe that building a China-free drone supply chain requires removing the Chinese manufacturer DJI from the US market.
DJI, which became the world’s largest drone maker with support from both Chinese government subsidies and American venture capital, remains the dominant supplier to US farmers and police departments.
“Until DJI is entirely banned, there’s not enough market to stand up a US industrial base,” said Nathan Ecelbarger, chairman of the US National Drone Association.
However, DJI successfully resisted these efforts, lobbying against legislative measures that would ban its products and suing the Defense Department over national security designations. In December, a proposed ban on DJI products was dropped from the annual military spending bill.
“DJI has been unfairly targeted due to its national origins,” the company told Forbes.
The tariff dilemma
President Trump’s tariffs aim to encourage American companies to reduce dependence on foreign supply chains. However, industry leaders warn that an immediate ban on Chinese components would be devastating.
“Immediately removing all foreign adversary-based sources of supply for critical drone components would have a catastrophic effect on the American drone industry,” wrote Jai Ramaswamy, chief legal officer of venture capital firm Andreessen Horowitz, in a response to the Commerce Department.
National security experts counter that such short-term pain might be necessary. “You are going to have to pull the band-aid off at some point,” said Steinman. “And either you are going to choose or [China] will.”
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