Trump Imposes 100% Tariffs on Some Drones, Countering China
(Bloomberg) — The Trump administration is applying a 100% tariff on imports of unmanned aircraft systems and their components in a bid to cut the US’s reliance on foreign supplies of drones.
The top 100% rate will apply to drones of a certain size or those that possess national-security capabilities, according to a White House statement. Other imports will face lower duties. The levies will take effect for many of the products in 21 days.
According to the proclamation released Thursday, Commerce Secretary Howard Lutnick concluded that import penetration from foreign drone producers is “substantial,” and that the US is “too reliant” on foreign unmanned aircraft systems and their parts.
Adding to the Washington’s urgency to protect its domestic industry, Russia’s war in Ukraine has showcased the military effectiveness of drones, helping both sides hold territory and ushering a new era of hybrid warfare. President Donald Trump, in the proclamation, declared the unmanned aircraft systems “essential to the national and economic security” of the US.
Smaller drones that lack national security abilities will be taxed at a 25% rate. These duties will take effect in 180 days.
The announcement could heavily affect the Chinese drone market and may increase pressure on the country ahead of the planned meeting between Trump and China’s Xi Jinping.
China is the world’s dominant manufacturer of remote-controlled aerial vehicles, with Shenzhen-based DJI Technologies accounting for about 70% of the US commercial drone market as of last year.
The announcement follows other actions aimed at China’s dominance in advanced technology, including a Federal Communications Commission restrictions on imports of some foreign-made drones including new DJI models, and a more recent ban on some foreign-made robots and power inverters, which provoked retaliation from China’s Ministry of Commerce.
Thursday’s decision also marks another move by Trump to impose tariffs since the Supreme Court ruled in February that he exceeded his authority by invoking emergency federal powers to impose sweeping global levies.
The drone duties rely instead on Section 232 of the Trade Expansion Act of 1962, which require an investigation before allowing import restrictions for national security grounds. Trump has invoked the same power to collect tariffs goods including steel and aluminum, semi-finished copper, and cars and auto parts. Probes into robotics and wind turbines are ongoing under 232 authority.
Tariffs on drones from several economies that struck trade deals with Trump will be 15%, so long as all hardware and technology originates from those places and the US.
Those locations include the European Union, Japan, Switzerland and Taiwan. The United Kingdom will be subject to a 10% tariff on its drones and components.
Shares of US dronemakers AeroVironment Inc. and Aevex Corp., and drone-parts company Unusual Machines Inc. jumped in postmarket trading after the announcement.
–With assistance from Derek Wallbank.
(Updates with details throughout, and market reaction in final paragraph.)
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