Grounded Giants: The Expiration of the U.S.–China Tariff Deal and What It Means for DJI and the American Drone Market

On July 8th, 2025, the U.S.–China lowered tariff agreement quietly expired. Originally designed to exempt key technology products from steep Section 301 tariffs, this deal provided a crucial lifeline for imports, especially from China. With its expiration, tariffs of up to 145% are now being reimposed on a wide range of Chinese electronics, including drones and their components.

For DJI, the world’s leading drone manufacturer and the dominant player in the U.S. market, the implications are seismic.

Tariffs Take Flight: Prices Soar, Demand Dips

DJI drones are now subject to full duties of up to 145%. The result has been a near-tripling of retail prices in some cases. For example, Enterprise-class platforms like the Matrice 350 RTK have seen price jumps from around $11,000 to over $25,000, depending on configuration and markup.

These price hikes are already being felt across:

• Consumer markets, where buyers are pausing or shifting to secondary markets after customs issues buying directly from DJI

• Public agencies, particularly fire and police departments with limited budgets

• Commercial users, including utilities, agriculture, and construction firms, who rely on drones for inspections and data capture

Distributors, who anticipated the shift, imported inventory aggressively in Q2 2025—but those supplies have dwindled fast, and restocking at current costs is unsustainable for many.

CBP Detentions: A Quiet Blockade Since Late 2024

Even before the tariff shield came down, DJI was facing another critical challenge: U.S. Customs and Border Protection (CBP) began detaining DJI drone imports as early as October–November 2024, under the Uyghur Forced Labor Prevention Act (UFLPA).

The law prohibits goods manufactured wholly or in part using forced labor from entering the U.S. market, with special scrutiny applied to Chinese products tied to the Xinjiang region. DJI was added to the U.S. Department of Commerce’s Entity List back in 2020, and allegations have persisted about its supply chain’s connections to forced labor.

DJI denies the claims, stating it abides by all international labor laws and that its products are ethically manufactured. Nonetheless, since late 2024:

• A large share of DJI shipments have been flagged for inspection or denied entry altogether

• Delivery delays of 4–8 weeks became common by early 2025; now, delays are indefinite

• Retailers and enterprise buyers began seeking alternatives or halting procurement

• DJI has taken measures to reduce its direct-to-consumer sales and restrict US browser page visits by marking drones as "Not available in your country/region"

The detentions have functioned as a soft restriction, effectively acting as a de facto ban and throttling DJI’s pipeline of new inventory into the United States.

Looming Legislation: The Year-End Ban That Could Reshape the Market

Perhaps the most disruptive development still lies ahead: a bipartisan bill passed in Congress aims to ban the sale, operation, and support of all DJI products in the U.S. by the end of 2025. Section 1709 of the FY25 NDAA requires an assessment of the threat manufacturers like DJI and Autel Robotics pose to US national security.

A key point from this is that if no agency completes an evaluation, whether security issues are found or not, this legislation would automatically put DJI on the FCC Covered/Banned list. It could:

• Block federal agencies and grant recipients from using DJI equipment

• Ban commercial sales of DJI drones through U.S. retailers

• Disrupt software support or app access, limiting functionality of existing fleets

The ripple effect would be immense.

Enterprise and Public Safety: No Easy Replacement

Thousands of public safety agencies—police, fire, and emergency response teams—rely on DJI drones daily. Their affordability, reliability, and camera quality have made DJI the standard for aerial situational awareness and search-and-rescue operations.

If DJI drones become unsupported or illegal to operate:

• Departments will face costly transitions to U.S.-made or allied alternatives

• Operational capabilities may decline due to short-term gaps in performance or training

• Public safety response times and accuracy could be negatively affected, particularly in rural or high-risk areas

Commercial and Infrastructure Use: Productivity Under Threat

From inspecting power lines and bridges to mapping construction sites and crops, DJI’s enterprise drones have powered a data revolution. These systems are deeply integrated into workflows and cloud platforms.

A sudden ban could:

• Disrupt service delivery and project timelines

• Force companies to reinvest in training and system integration

• Drive up costs—often by 100% or more—for comparable capabilities from U.S. or European firms

Consumer Market: A Dominant Brand’s Exit

DJI holds more than 75% of the U.S. consumer drone market. No other manufacturer has its mix of price, performance, ease of use, and marketing reach. Without DJI:

• Consumers will have fewer choices at the entry level

• Remaining options may lack the same quality or software ecosystem

• FPV and DIY drone segments could grow as enthusiasts look for alternatives

Can U.S. Drone Makers Rise to the Occasion?

The disruption opens a rare window of opportunity for American drone companies like Skydio, BRINC, Teal Drones, and others—many of whom are part of the Pentagon’s Blue UAS initiative. But scaling up quickly won’t be easy.

Challenges include:

• Manufacturing capacity: Most U.S. drone firms lack the scale DJI enjoys from its global operations

• Component supply chains: Many rely on Chinese electronics, raising compliance and sourcing concerns

• Feature parity: DJI has spent years refining camera systems, AI features, and cloud integration

• Stalling innovation: without DJI to set the standard in the US, US-based manufacturers may not have an incentive to improve

Still, domestic interest is growing. Federal procurement agencies are increasing orders from U.S.-listed drone providers. Private capital is flowing into drone startups. And industry associations are pushing for government incentives, such as tax credits and accelerated approval pathways.

Final Thoughts: A Market in Transition

With the tariff agreement expired, CBP detentions ongoing, and a potential full ban looming, DJI’s future in the U.S. has never looked more uncertain. This trifecta of trade pressure, regulatory scrutiny, and national security policy is forcing the American drone industry into a new era.

For stakeholders—from first responders to farmers, from tech buyers to hobbyists—the next six months will be a test of adaptability and innovation. Will American and allied drone manufacturers seize this moment? Or will gaps in supply and capability open the door to black markets, workarounds, or unintended consequences?

One thing is clear: DJI’s reign in the U.S. is no longer guaranteed. And the airspace—once comfortably controlled—is now up for grabs.