President Trump announced a slate of tariffs to address a national-security threat posed by imports of drones and their components, particularly from China.
In a statement, the White House said the drone-tariff program would protect the security of the U.S. and its defense and defense-adjacent industrial base, while creating jobs. "U.S. drone production needs to be expanded rapidly to ensure U.S. national and economic security," it said.
The decision gave a boost to shares of U.S.-based drone companies, including AeroVironment, Red Cat Holdings and Unusual Machines, which is backed by Donald Trump Jr. Shares of Unusual Machines, a drone-parts maker, jumped around 14% in pre-market trading.
The action is meant to counter Chinese dominance in the commercial drone market and reshore production to the U.S. Drones and components from China will face significantly higher levies than those from allied nations. The move also comes ahead of an expected Sept. 24 meeting between Trump and Chinese leader Xi Jinping.
According to the proclamation announced Thursday, the duties are tiered according to the capacity of the drones and their place of origin.
Bigger drones that have militarily sensitive abilities such as thermal imaging are subject to a 100% tariff based on their value, along with certain critical components. Smaller drones and components without the same implications for national security face a 25% levy.
U.S. allies will have lower rates. A 15% tariff will be imposed on products from the European Union, Japan, Liechtenstein, South Korea, Switzerland and Taiwan, with a 10% duty levied on drones from the U.K. under the condition that nearly all hardware, software and technology originate from within these countries and the U.S.
Those allied economies last year secured trade deals with the U.S. that capped many U.S. tariffs at 15% -- and 10% for the U.K. -- in exchange for concessions on tariffs and regulations on American goods. Those tariffs on drones from allied economies won't be added on top of other tariffs that Trump has imposed on the nations, such as his recent levies to address forced-labor concerns from more than 80 countries.
The proclamation also authorizes the commerce secretary to establish an onshoring program for companies making new investments in manufacturing drones and drone components, in line with the administration's push to bolster national-defense industries.
The new tariff action will be taken under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs to combat national-security risks. Trump last year ordered the Commerce Department to evaluate imposing tariffs on foreign-made drones, and the agency found that reliance on those products threatened national security.
Section 232 is the same provision that Trump has used to impose levies on steel, aluminum, automobiles and parts in his second term. Those national-security levies weren't affected by a Supreme Court decision in February that invalidated many of Trump's other global tariffs, and they are seen as more legally durable because the Section 232 provision has a long history of use.
The new tariffs come on the heels of other actions aimed at China's tech sector, including new restrictions from the Federal Communications Commission on some foreign-made drones and other bans on power inverters and robots.
In May, The Wall Street Journal reported that the Trump administration was pursuing funding deals with a group of drone companies as part of its bid to increase domestic production and lower the costs of the increasingly vital weapons.
Separately, Trump also signed a National Security Presidential Memorandum aimed at fixing long-term issues in Navy shipbuilding and ship-repair programs and at restoring capacity and competition to the maritime industrial base.
The memorandum directs the Defense Department to pursue more direct investments in the American shipbuilding industrial base, among other things, aiming to revitalize the shipbuilding industry and restore maritime dominance, the statement said.
The drone tariffs are set to take effect 21 days after the proclamation's signing. For components that aren't particularly sensitive, the duties will take effect after 180 days.