In a tit-for-tat escalation underscoring the fragility of global tech supply chains, China on Friday added 11 U.S. companies manufacturers to its “Unreliable Entity List.” It also imposed export controls on 16 more American firms — many of which are drone companies.

The move follows a wild few weeks of news around tariffs that have swept the entire U.S. economy. They also come in light of talks over the past couple years among U.S. politicians to ban Chinese drones.

But this move made on Friday, April 4 marks Beijing’s most sweeping retaliatory measure yet against the U.S. drone sector. The sanctions, announced by China’s Ministry of Commerce, target American companies it claims are involved in “military technology cooperation with Taiwan.”

The Chinese government’s list of companies are largely in defense-related industries and includes several drone companies. These are largely companies that build drones to support U.S. public safety, military, and critical infrastructure operations. The list includes American drone companies such as Skydio and BRINC.

A history of tensions between U.S. and China around drones

This latest move follows a series of increasingly antagonistic gestures between the world’s two largest economies in the drone space. In recent years, the U.S. has taken a cautious but deliberate approach to curtail its use of Chinese-made drones. In particular, that means drones from Shenzhen-based DJI, the world’s dominant drone manufacturer.

For example, some bipartisan lawmakers have sough to push forward the American Security Drone Act of 2023. That legislation would prohibit federal agencies from purchasing drones made by Chinese government-linked countries. And in May 2024, Representative Elise Stefanik (R-NY) introduced the Drones for First Responders (DFR) Act. That would have implemented a 30% tariff on Chinese-made drones.

Today, no blanket ban exists on DJI drones. However, certain federal agencies such as the Department of Defense and Department of the Interior are barred from procuring Chinese drones due to cybersecurity and espionage concerns.

Past China sanctions on American drone companies

For what it’s worth, this is not the first time China has announced sanctions on U.S. companies.

For example, in fall of 2024, China announced sanctions on Skydio for selling drones to Taiwan, which is democratically governed but that China claims as part of its territoory. Skydio says its one and only customer in Taiwan was its National Fire Agency. Though Skydio has always manufactured its drones in the U.S., it still sourced its batteries from China. Skydio CEO Adam Bry warned in a note to customers that the China sanctions would result in reduced battery supply — going so far as to ration batteries to one per drone.

“If there was ever any doubt, this action makes clear that the Chinese government will use supply chains as a weapon to advance their interests over ours,” Bry wrote in a 2024 note to customers. “This is an attempt to eliminate the leading American drone company and deepen the world’s dependence on Chinese drone suppliers.”

Tensions move from data privacy to economic retaliation in new China sanctions

But with the new China sanctions announced on Friday, the dynamic has shifted from defensive caution to economic reprisal.

“These retaliatory actions expose how vulnerable that progress remains,” said the Association for Uncrewed Vehicle Systems International (AUVSI), the leading industry group for drone and robotics companies, in a prepared statement. AUVSI, which represents manufacturers, operators, and researchers across the drone and robotics sector, warned that China’s actions — combined with its recent ban on the export of certain rare earth minerals to the U.S. — threaten “global supply chain stability and the continued development of secure technologies.”

“The PRC’s targeting of leading U.S. drone and autonomous technology firms, including multiple AUVSI member companies, is just the latest example of why the United States must prioritize its supply chain security and resiliency,” said Michael Robbins, AUVSI’s President & CEO. “We need immediate action from the White House and Congress to ensure the U.S. drone industry is competing on a level playing field.”

Though the United States has labeled certain Chinese drones a national security risk, it has stopped short of imposing comparable sanctions or export restrictions on China’s drone manufacturers the way China has now done toward U.S. drone companies.

China’s new measures could have immediate and far-reaching consequences for U.S. firms. In particular, it would hurt those dependent on Chinese suppliers for components. That includes gimbals, optical sensors or rare earth magnets or (as evidenced by Skydio) batteries. While American drone makers have been working to “reshore” their manufacturing processes and reduce reliance on Chinese parts, many remain tethered to global supply chains built over decades of globalization.

The timing of the announcement also reflects broader geopolitical tensions between Washington and Beijing — not only over Taiwan, but over technology sovereignty writ large. China’s targeting of U.S. drone companies appears calculated. It could stifle a burgeoning U.S. effort to build secure, homegrown alternatives to DJI and other Chinese manufacturers.

“Now more than ever, the United States must invest in domestic production capacity and enacting policies that strengthen our industrial base,” Robbins said.

To counter the sanctions’ effects, AUVSI is calling for a multi-pronged U.S. policy response. That includes smart regulatory reform, accelerated investment through the Defense Production Act and manufacturing tax incentives, and strategic partnerships with allied nations.

“This moment demands more than concern — it requires coordinated action,” said Robbins. “Government and industry must accelerate efforts to build a trusted, domestically driven drone ecosystem.”

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