It’s a sweeping industrial policy bound to fail. The US government has banned imports of all new drones from China — and from Ukraine. While US drone operators may continue using drones already in the country, they cannot import newly developed drones without an exception granted by Defense or Homeland Security. The goal, as President Donald Trump described his policy, is “unleashing American drone dominance.”
Full self-sufficiency is impossible to achieve. In theory, import bans can spur domestic production and create trusted clusters of firms with deep domestic supply chains. But as any student of basic economics understands, protectionism decreases general welfare. Even narrowly tailored bans, tariffs, and subsidies are difficult to remove once in place because they create rent-seeking entitlements for entrenched, uncompetitive firms and their underproductive workers.
A good example is American shipping. For more than a century, the Jones Act has required all vessels moving goods or passengers between American ports to be built in the US, but has failed to resuscitate American shipbuilding. It has hindered its development, effectively creating a “monopoly for a small number of US-owned, US-flagged vessels,” according to the Pacific Legal Foundation. “Many US vessels are old, inefficient, and incapable of keeping up with the demands of modern shipping.”
Similarly, wrong-headed industrial policy regarding drones will inhibit innovation. In Ukraine, the war against Russian invaders is rapidly producing military innovations with revolutionary effect. Low-cost autonomous Ukrainian drones are maturing at lightning speed.
NATO allies should take note. Instead, they underestimate Ukraine’s success. Armin Papperger — the CEO of German defense giant Rheinmetall — lamentably disparaged this process, dismissing Ukrainian drone assembly as mere “housewives with 3D printers in the kitchen.” In reality, decentralized, agile iteration is reshaping modern warfare. Ukraine has successfully built a massive domestic industry, but has only done so by expertly leveraging accessible Chinese components.
Under the current US ban, Ukrainian innovators face a regulatory gauntlet just to showcase their battle-proven systems in America. In contrast, they can freely collaborate with other European allies. Although it may represent an understandable security necessity to restrict Chinese drone control software from US airspace, it is counterproductive to ban all Chinese parts.
US drone policy must focus on the long term without operating as a permanent shield. The Pentagon’s plan to direct $54 billion toward domestic drone procurement is a welcome start. Here’s how the money should be spent.
- Spread the funding: Procurement officials must distribute capital across multiple suppliers through frequent competitions to incentivize rapid development.
- Leverage allied preferences: A portion of these contracts should explicitly favor allied nations. This promotes reciprocal organizational learning and allows the US military to legally license battle-proven Ukrainian technologies.
- Co-invest in future-shaping fields: Western nations must form combined investment strategies into pioneering tech sectors — such as artificial intelligence, quantum computing, and advanced autonomy — to ensure easy access to trusted innovations.
The US enjoys a prime opportunity to utilize its Ukrainian connections for “re-innovation” — accessing raw battlefield tech, refining it, and exporting its superior systems. A recent investment in a Ukrainian drone manufacturer by the US International Development Finance Corporation offers a brief glimmer of hope.
But hope does not represent a strategy. True drone dominance cannot be achieved through isolation.
James Hasik is a Non-resident Senior Fellow with the Transatlantic Defense and Security program at the Center for European Policy Analysis (CEPA).
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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