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The U.S. Commerce Department may impose a rule that could curb or outright prohibit the use of Chinese drones in the country.
The U.S. Commerce Department is considering imposing a rule that could restrict or ban drones made in China due to the national security risks they pose.
The Commerce Department’s Bureau of Industry & Security (BIS) said in a Jan. 2 statement that foreign adversary involvement in uncrewed aircraft systems supply chains “including acute threats from the People’s Republic of China and Russia may offer our adversaries the ability to remotely access and manipulate these devices, exposing sensitive U.S. data.”
“Securing the unmanned aircraft systems technology supply chain is critical to safeguarding our national security,” Commerce Secretary Gina Raimondo says.
Ahead of a March 4 deadline, the BIS is requesting that private firms comment on the parameters and potential economic impact of the rule.
The exploration of this rule comes as the U.S. Congress considers banning the sale of new drones by China-based DJI and Autel Robotics. The 2025 National Defense Authorization Act currently mandates that within one year of its enactment, a designated national security agency must assess whether Chinese drone manufacturers’ products or those of their affiliates or subsidiaries pose an “unacceptable risk” to national security. If the Chinese drones are deemed to pose such a risk, they could be barred from operating in the U.S.
Chinese drones have a commanding presence in the U.S. market. Companies based in China and subsidized by the Chinese government control 90% of the consumer drone market, 70% or more of the enterprise market and 92% of the state and local first responder market, says the Arlington, Virginia-based Association for Uncrewed Vehicle Systems International.
Competitors of DJI and Autel see an opportunity to move in on their territory. During U.S. drone-maker Red Cat’s fiscal second-quarter earnings call, CEO Jeffrey Thompson said that the company assessed a total addressable market (TAM) of $975 million that would result from a ban on those two Chinese drone manufacturers. “So that’s a massive TAM that we are going to put some efforts toward now that DJI and Autel are going to be banned,” he added.
Red Cat’s share price has risen 45% over the past month. Though the company reported modest revenue of $4.3 million in its most recent quarter, its forecast for the 2025 calendar year is bullish: $80 million to $120 million.
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