Shares of drone manufacturers rose following Trump's announcement of new tariffs
Shares of drone manufacturers rose after U.S. President Donald Trump announced the imposition of import tariffs on drones and their components. According to CNBC, Unusual Machines shares rose 10%, while Red Cat shares rose about 5%. Shares of AeroVironment and Kratos also rose.
Under the directive, large drones with sensitive military capabilities, including thermal imaging systems, will be subject to a 100% tariff. A 25% tariff applies to smaller drones without such capabilities. A 15% tariff has been set on drones and components from the European Union, Japan, Liechtenstein, the Republic of Korea, Switzerland, and Taiwan, while goods from the United Kingdom will be subject to a 10% tariff.
The White House stated that drone production in the U.S. must be rapidly scaled up to ensure national and economic security. It also noted that outsourcing component manufacturing overseas poses significant risks to security and cybersecurity. According to the White House, the tariffs are intended to help create jobs and protect national security and the defense industrial base.
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The U.S. administration aims to increase domestic drone production and reduce dependence on foreign components, primarily from China, which has long dominated the drone market. The tariffs are set to take effect within 21 days. For drones and components not classified as particularly sensitive, the implementation of these tariffs has been deferred for 180 days.
The directive also authorizes the U.S. Department of Commerce to launch a program for companies planning to invest in domestic drone production. Earlier this year, the Trump administration launched the Drone Dominance program, worth over $1 billion, to expand the production of small, low-cost drones in the U.S. The second phase of the program is scheduled to begin this month.
