China urged the U.S. to remove new tariffs on drones and related parts.
- President Donald Trump’s August 13 proclamation imposes tariffs of up to 100% on certain imported drones and components.
- The order also encourages companies to build drone production facilities in the U.S.
- China has called the tariffs discriminatory, ahead of President Xi Jinping’s September 24 U.S. visit.
Drone stocks, including Ondas (ONDS), Unusual Machines (UMAC), Red Cat Holdings (RCAT) and Kratos Defense (KTOS), are drawing attention as China reportedly urged the U.S. to scrap Section 232 tariffs on imported drones and related components, arguing the measures unfairly target Chinese products and hurt domestic companies.
U.S. Drone Tariff Action
The dispute centers on a proclamation President Donald Trump signed on August 13 imposing tariffs of up to 100% on imported drones and unmanned aircraft components, a move aimed at boosting domestic manufacturing.
Trump’s order sets different tariffs based on a drone’s size, capabilities and where it is made, with some advanced drones facing tariffs as high as 100%. Most tariffs start after 21 days, while some lower-risk parts get a 180-day delay. The White House says the move is needed to reduce U.S. reliance on foreign drone supplies.
“UAS [unmanned aerial systems]are a key technology in modern armed conflict and are critical for present and future U.S. military operations,” said the proclamation.
The order also allows the Commerce Secretary to launch a program encouraging companies to build new drone and parts manufacturing facilities in the U.S.
China Wants Washington To Remove Tariffs On Drones
According to a Reuters report, China has responded by calling on the U.S. to reverse the newly imposed tariffs on drones and associated parts. He Yadong, a spokesperson for China’s Commerce Ministry, made the demand Thursday during a routine press briefing in Beijing. He said Beijing objects to the U.S. trade measures and wants Washington to remove them without delay.
The tariffs “treat related Chinese products in a discriminatory manner and seriously harms the interests of Chinese companies,” the report quoted Yadong. China’s stance comes ahead of Chinese President Xi Jinping’s visit to the U.S. on September 24.
Following the report, Ondas, Unusual Machines and Kratos stocks edged lower between 0.6% and 0.8% in Thursday’s premarket, while Red Cat stock traded over 1% higher.
China has previously tightened drone export rules for the U.S. and sanctioned several U.S. companies in retaliation for the latter’s trade and technology restrictions. Beijing had then called for a case-by-case review for drone exports and key components. According to a Financial Times report, China remains a major global supplier of drones, with companies such as DJI, Autel Robotics and XAG having significant U.S. sales.
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