China’s Attack on U.S. Drone Company Is a Warning

In October, the Communist government of the People’s Republic of China slapped sanctions on Skydio, America’s largest maker of consumer drones.  

Skydio’s supposed offense: providing drones to firefighters in Taiwan.  The company also sells drones to Ukraine, which uses them for military reconnaissance in its defensive war against Russia.

China’s action effectively blocks Skydio from obtaining indispensable lightweight batteries, which only China makes in significant quantities.  Skydio is now scrambling to find alternatives.

China’s attempt to hobble a U.S. drone-maker is disturbing.  But it should come as no surprise.

Experts have long warned that our supplies of key technologies are dangerously dependent on China.  Worryingly, China now has far more industrial capacity than the United States in drones and other defense-related sectors.

The numbers are staggering.

China dominates commercial shipbuilding, with more 50% of the world’s capacity.  By some measures, China’s commercial shipbuilding industry is more than 200 times the size of America’s.

Consumer drone sales are similarly lopsided.  The world leader, China’s DJI, holds more than 70 percent of the market for consumer and “prosumer” drones.  Skydio, the largest American competitor, is growing but still garners less than 10%.

In a military conflict, industrial capacity in these sectors could be the difference between victory and defeat.  

During World War II, America’s industrial base made us the world’s “Arsenal of Democracy.”  Ford stopped making cars and switched its assembly lines to Army jeeps and B-24 bombers.  Commercial shipyards built thousands of landing ships and other military vessels.

Our most senior military leaders have warned that China may try to invade Taiwan this decade. 

That could mean all-out war on a scale not seen since World War II.  In one simulation, “[t]he United States and its allies lost dozens of ships, hundreds of aircraft, and tens of thousands of servicemembers.”

In a long war, China’s advantage in industrial capacity could be decisive.  

Both sides would have to replace large numbers of ships, drones, missiles, and other systems.

China’s vast commercial shipyards could replace ships sunk by U.S. torpedoes and missiles.  And DJI’s drone production lines could churn out thousands of small kamikaze drones sent to kill American sailors.

Our industries, by contrast, would struggle to keep up.  Today, even without a major war, our defense industrial base can barely fill demand for key munitions used in Ukraine and the Middle East.

Congress must act now to remove China from key supply chains and restore industrial capacity needed for our nation’s defense.

The first step should be passing the bipartisan Countering CCP Drones Act.  The bill would require the Federal Communications Commission to add DJI to a list of companies whose products endanger national security.  It has already passed the House and could clear the Senate during the “lame duck” session this fall.

Opponents have argued that the Countering CCP Drones Act will raise prices and narrow the range of products available to consumers.  And well it might: for reasons fair and foul, Chinese products are often cheaper than their American competitors.  

But those costs are worth bearing.  By some estimates, Russia and Ukraine are each losing 10,000 drones per month in their war.  In future conflicts—especially a major war with China—we would need our own drone production lines to supply our forces in the field.  

Paying a bit more now for American-made drones is an insurance policy against a potential catastrophe: defeat in a war with China.  

It is also a deterrent.  If China believes that we could resupply our forces in a prolonged war, it will be less likely to start one in the first place.

Once President, Donald Trump and our new Congress can take further policy measures to rebuild our defense industrial base.  Targeted tariffs on Chinese imports in strategic industries could help re-shore or “friend-shore” those production lines.  The Commerce Department can use its authority to restrict Chinese drones that could be used for PRC espionage in the United States.

Incentives also have a role.  The Ships for America Act, for example, would use tax credits and deductions to persuade shippers to move cargo on ships built and flagged in the U.S.A.  Similarly, the U.S. government should offer incentives for American or allied companies to produce the lightweight, high-density batteries needed to power drones.

There is some good news.  With its clumsy attack on Skydio, the CCP has revealed the danger of making ourselves dependent on China for key industries.  It is a warning we would be unwise to ignore.

Adam Klein is Director of the Strauss Center for International Security and Law at the University of Texas at Austin.