A summer of restrictions
Washington spent July and August drawing fresh lines around foreign robotics. New tariffs on imported drones and their components are set to land in September, with another wave of component duties following in 2027. Both moves cite national-security concerns. The FCC’s Covered List — launched in 2021 to target telecom and surveillance gear from Huawei, ZTE and Hikvision — has since expanded to cover foreign-made drones and, most recently, advanced robotic devices.
Here’s the tension: the restrictions arrive at a moment when Chinese manufacturers dominate both drones and humanoid robots, often at price points Western rivals can’t touch.
The scale gap nobody can sanction away
Robotics isn’t semiconductors. There’s no single choke-point technology that one country can simply switch off, notes Ankur Saxena, an investment director at TDK Ventures. That distinction matters.
The numbers tell the story. Global humanoid robot shipments hit 22,000 units in the first half of this year, with Chinese manufacturers accounting for the vast majority, according to Counterpoint. The world’s five largest humanoid makers by shipments — AgiBot, Unitree, Galbot, UBTECH and Leju Robotics — are all Chinese. Together they shipped 86% of the global total.
That lead compounds. Lower prices mean more robots deployed. More deployments generate real-world data. That data improves the technology. Better tech drives costs down further. Saxena calls it a self-reinforcing loop that U.S. companies, operating at far smaller scale, simply can’t enter.
Chinese firms are also pulling the tech stack in-house. Unitree is developing more components internally. Automakers like XPeng are leaning on their chip and vehicle-manufacturing experience as they pivot into robotics.
Saxena sums up the divide bluntly: “The United States leads in frontier AI, software and semiconductor innovation. China leads in manufacturing scale, supply-chain depth and cost.”
His warning cuts to the core of the policy debate: “You cannot sanction your way around a cost curve. You can only out-build it, and America has yet to begin making the decade-long investment that will require.”
Where does China go next?
The likely answer: everywhere else. Even locked out of the U.S. market, Chinese robotics firms still hold a vast domestic base and room to expand into regions hungry for affordable automation.
Soumen Mandal, a principal analyst at Counterpoint, sees Chinese companies already targeting price-sensitive markets with acute labor shortages across Europe, Southeast Asia, Latin America and the Middle East. He expects humanoids to follow the playbook Chinese EV makers perfected: build scale at home, expand overseas, then set up local production.
The drone market offers a preview of this fragmented future. Bentzion Levinson, founder and CEO of Virginia-based Heven AeroTech, describes an industry splitting into two ecosystems: a U.S.-led market built around NDAA-compliant systems, and a China-led market focused on low-cost, high-volume production.
Western makers shouldn’t bother chasing the low-end consumer drone segment, Levinson argues — cost advantages there are simply too steep. Instead, U.S. and allied firms should compete in long-range autonomous systems for defense and critical infrastructure, where security requirements carry more weight than price tags.
The next battleground: power and payloads
Levinson sees the competitive frontier shifting from the drones themselves to what powers them and what they carry. “The next battleground is over who owns the next-gen energy and payload architecture,” he says, pointing to battery constraints as a particular pressure point.
Agility Robotics welcomed the FCC’s July decision, arguing it could address security concerns around foreign-made robots before they become as deeply embedded in U.S. markets as drones did. The company points to its Digit humanoid, designed and assembled stateside, while calling for continued access to the tools and technologies needed to advance robotics research.
A more regional robotics market
“The alternative to China isn’t a purely domestic U.S. supply chain; it’s a diversified allied one,” Saxena says.
That opens doors elsewhere in Asia. Japan brings decades of industrial robotics and precision manufacturing experience. South Korea has strengths in electronics, batteries and autos. Taiwan remains a semiconductor heavyweight. But none can simply replace China, given how deeply Chinese components remain embedded across the global robotics supply chain.
Asian manufacturers could carve out a middle ground between low-cost Chinese robots and pricier U.S. offerings. Hyundai, which owns Boston Dynamics, and Toyota are among the automakers investing heavily in robotics, drawing on their vehicle and autonomous-systems expertise.
Yang Fang of Beagle Technology, a California agtech startup converting conventional farm equipment into autonomous machines, expects robotics to become more regional as companies design for local labor needs and working conditions. Chinese firms may focus on products suited to China and nearby markets; U.S. companies will likely build for industries across North America.
The likely outcome isn’t two neatly separated U.S.- and China-led industries. It’s something messier: Chinese companies competing on cost and scale across much of the world, U.S. and allied manufacturers gaining ground where security matters most, and Japan, Taiwan and South Korea fighting to hold the middle.
The restrictions may protect parts of the American market. They don’t address China’s global manufacturing scale. And as the humanoid robot market expands and US drone import rules take effect, the real competition may simply move elsewhere.
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