America proposes tariffs that will hurt American drone industry

The White House has proposed $50 billion trade tariffs against Chinese imports.

They may do more harm than good for the American drone industry. From a couple of angles.

So many parts of the drone and model aircraft food chain are covered, that it can only drive up the cost for end users. At the moment a 25% tariff is being put forward for consideration.

That would be fine for local manufacturers if they made the items being taxed, but they don’t. Various parts are just not made in bulk in America. Chinese manufacturers can use the rest of the world as a cushion. American products still won’t be bought in overseas markets, they will still be far more expensive.

The other elephant in the room for American drone manufacturers are ITAR restrictions, it is really hard to export an autopilot-equipped platform from the USA (legally), that is the reason 3DR made its autopilots in Mexico.

Is the US market really large enough to support the manufacture of all components?

If I were DJI I would drop my ticket price and finally crush any US drone making startups.

DJI have put themselves into apps that some people cannot operate without and have captured the emerging Part 107 operator market.

Several companies have tailored their offerings to match or fit DJI’s product putting all their eggs in one basket.

It is much easier for developers to create products for one platform. Interfacing with 100 different types all with a mix and match of cameras and communications would be a nightmare.

Will this be stormy waters and sinking ships for some silicon valley app companies already under pressure? They are under pressure because they don’t actually provide data outputs that can be banked. More interpretation than hard fact.

Serious business is not using many of the products that have received serious VC funding.

Plenty of emerging Part 107 operators know no better and are keeping these apps sellers wares going, only to find out after subscribing that they do not meet surveying standards.

The increased software and hardware costs may just be too much for many mom and pop 107’s. Good news for those that would be king and in command of most of the inspection market.

Military sUAS makers will be smiling, their underspecification, overpriced offerings might be the only local show left in town soon.

Intel might be well placed to prosper in this new age, they have international manufacturing and fingers in professional surveys.

Let’s see what the big military vendor advocacy group has to say about these proposed tariffs, my money is on them welcoming them. It will certainly cast a long shadow over their forthcoming dog and pony show.

My very quick take is, China wins.

Here are some items that caught my eye from the announcement.

85030035 Parts of electric motors under 18.65 W, stators and rotors

85044040 Electrical speed drive controllers for electric motors (static converters)

85065000 Lithium primary cells and primary batteries

85066000 Air-zinc primary cells and primary batteries

85069000 Parts of primary cells and primary batteries

85073080 Nickel-cadmium storage batteries, other than of a kind used as the primary source of power for electric vehicles

85079040 Parts of lead-acid storage batteries, including separators therefor

85079080  Parts of storage batteries,

85269250 Radio remote control apparatus other than for video game consoles

85299016 Printed circuit assemblies which are subassemblies of radar, radio nav. aid or remote control apparatus, of 2 or more parts joined together

85299019 Printed circuit assemblies, nesi, for radar, radio navigational aid or radio remote control apparatus

88010000 Balloons, dirigibles and non-powered aircraft, gliders and hang gliders

88021100 Helicopters, with an unladen weight not over 2,000 kg

88022000 Airplanes and other powered aircraft, nesoi, with an unladen weight not over 2,000 kg

88031000 Parts of airplanes and other aircraft, propellers and rotors and parts thereof

88032000 Parts of airplanes and other aircraft, undercarriages and parts thereof

88033000 Parts of airplanes and helicopters, nesoi

88039090 Parts of aircraft (o/than airplanes and helicopters), spacecraft (o/than comm. satell.) and suborbital and launch vehicles, nesoi

88051000 Aircraft launching gear and parts thereof; deck-arrestors or similar gear and parts thereof

88052900 Ground flying trainers and parts thereof, other than air combat simulators

90142040 Automatic pilots for aeronautical or space navigation