President Trump signed an order imposing tariffs of up to 100% on foreign-made drones and components, citing national security. Shares of Unusual Machines, Red Cat, Aerovironment, and Kratos all climbed on the news.
President Donald Trump on Friday signed an executive order imposing import tariffs on foreign-made drones and drone components, citing national security and the need to expand domestic manufacturing — a move that sent shares of several U.S. drone companies sharply higher.
Unusual Machines surged 15% following the announcement, while Red Cat climbed approximately 7%. Aerovironment and Kratos also posted gains.
"U.S. drone production needs to be expanded rapidly to ensure U.S. national and economic security," the White House said in a release, adding that outsourcing parts poses major security and cybersecurity concerns.
The order establishes a tiered tariff structure based on drone capability and country of origin. Large drones with "sensitive" military capabilities — such as thermal imaging — will face a 100% import duty, while smaller drones lacking those capabilities are subject to a 25% levy.
For drones and components from the European Union, Japan, Liechtenstein, South Korea, Switzerland, and Taiwan, the tariff is set at 15%. Imports from the United Kingdom face a 10% duty. The most sensitive tariffs take effect within 21 days; levies on parts that are "not particularly sensitive" will be phased in over 180 days.
The order also authorizes the Department of Commerce to launch an onshoring program to assist companies looking to invest in drone production on U.S. soil.
The directive fits within the Trump administration's broader effort to reindustrialize the defense sector and reduce reliance on foreign supply chains, particularly those connected to China, which has long dominated global drone manufacturing.
Earlier this year, the administration launched a drone dominance program valued at more than $1 billion, aimed at scaling U.S. production of small, low-cost drones. The second stage of that program is slated to begin this month.
The administration has also proposed a record $1.5 trillion defense budget for 2027, which includes a historic $75 billion allocation for drones within the Department of Defense.
One company at the center of the sector's political landscape is Unusual Machines. The drone manufacturer added Donald Trump Jr. to its advisory board in November 2024. As of Nov. 27, 2024, Trump Jr. held 331,580 shares in the company.
The tariff announcement comes as geopolitical pressures — including the ongoing war in Iran — have heightened demand for lower-cost unmanned systems capable of filling operational gaps in modern warfare.
With the second stage of the drone dominance program beginning this month and tariffs set to take effect on a rolling basis, domestic manufacturers face both near-term opportunity and longer-term pressure to build supply chains that can operate independently of foreign components.
Jay Goldberg is a staff writer at TechEchelon covering technology, markets, and policy. He files the breaking news and deal coverage that move the publication's core desks.
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