The United States is tightening restrictions on foreign-made drones and advanced robots in the name of national security.
But China’s huge manufacturing base and ability to produce cheaper machines could make it difficult for Washington to keep Chinese robotics companies out of global markets.
In July and August, the U.S. introduced new restrictions on advanced foreign-made robots and imposed steep tariffs on imported drones and their components. The drone tariffs are due to take effect in September, while additional tariffs on components are expected in 2027.
The moves are part of a wider U.S. effort to reduce its dependence on foreign technology in industries considered important to national security.
The Federal Communications Commission’s Covered List, created in 2021, initially targeted telecommunications and surveillance equipment from companies such as Huawei, ZTE and Hikvision.
The list was later expanded to include foreign-made drones and, most recently, advanced robotic devices.
The measures come as Chinese companies have built strong positions in both drones and humanoid robots. Their ability to produce large numbers of machines at relatively low prices has put pressure on American and European competitors.
That raises a bigger question for the robotics industry: If Chinese companies face growing restrictions in the U.S., where will they sell their products?
Analysts and industry executives say the answer is likely to be markets outside the United States. Rather than creating two completely separate robotics industries, the new restrictions could lead to a more divided global market, with Chinese companies expanding in other countries while American and allied manufacturers focus on markets where security is a bigger concern.
See also: Musk’s Gas Turbine Plan Raises Fresh Pollution Concerns
China already has a major advantage in humanoid robots because of the scale of its manufacturing industry. Global shipments of humanoid robots reached 22,000 units in the first half of 2026, with Chinese companies making up most of those shipments, according to Counterpoint.
The five largest humanoid robot makers by shipments AgiBot, Unitree, Galbot, UBTECH and Leju Robotics were all Chinese. Together, they accounted for 86% of global shipments during the first half of the year, Counterpoint said.
American companies are producing humanoid robots on a much smaller scale, according to Soumen Mandal, a principal analyst at Counterpoint Research.
China’s advantage could become even greater as production increases. Cheaper robots make it easier for companies to put more machines into factories and other workplaces. Those robots can then collect real-world data that companies use to improve their technology. Producing more machines can also bring down manufacturing costs.
Chinese companies are also making more of their own components instead of buying them from outside suppliers. Companies such as Unitree are developing more parts internally, while automakers such as XPeng can use their existing experience in vehicle manufacturing and electronics as they move into robotics.
Ankur Saxena, an investment director at TDK Ventures, said the U.S. remains ahead in areas such as advanced artificial intelligence, software and semiconductor technology. China, however, has an advantage in manufacturing, supply chains and cost.
That difference is already showing in the prices of humanoid robots. Chinese manufacturers have been able to lower prices faster than many American competitors.
“You cannot sanction your way around a cost curve,” Saxena told TechCrunch. “You can only out-build it.”
If Chinese robotics companies face greater restrictions in the U.S., they still have a large home market and plenty of opportunities abroad.
Mandal said Chinese companies are already looking at Europe, Southeast Asia, Latin America and the Middle East, where many countries are dealing with labor shortages and are looking for affordable ways to automate work.
He expects the humanoid robot industry to follow a path similar to China’s electric-vehicle industry: companies first build up production at home, then expand overseas and eventually establish factories in other countries.
Countries with aging populations and shrinking workforces could become important markets for humanoid robots, particularly in factories where robots can perform repetitive jobs.
The drone industry offers an early example of what this could look like.
Bentzion Levinson, founder and CEO of Virginia-based drone company Heven AeroTech, said the drone market is increasingly developing into two broad systems. One is centered on American-made drones that meet U.S. security requirements, while the other is led by China and focuses on producing large numbers of cheaper drones.
Levinson said American and other Western companies are unlikely to beat Chinese manufacturers on price in the low-cost consumer drone market. Instead, they could focus on more expensive systems used by the military, governments and critical infrastructure companies, where security is more important than price.
He also expects competition to move beyond the drones themselves. Batteries, power systems and the equipment carried by drones could become increasingly important as the machines are expected to fly farther and carry heavier loads.
Some American robotics companies have welcomed the new restrictions. Agility Robotics, which makes the Digit humanoid robot, supported the FCC’s decision in July. The company said it was important to address security concerns before foreign-made advanced robots become widely established in the U.S. market.
But building a completely American robotics supply chain may not be realistic.
“The alternative to China isn’t a purely domestic U.S. supply chain; it’s a diversified allied one,” Saxena said.
Japan, South Korea and Taiwan could benefit as companies look for alternatives to Chinese suppliers. Japan has decades of experience in industrial robots and precision manufacturing. South Korea is strong in electronics, batteries and automobiles, while Taiwan is a major producer of semiconductors.
Still, these countries cannot simply replace China. Chinese parts and suppliers remain deeply connected to the global robotics industry, making it difficult for manufacturers to remove China from their supply chains overnight.
South Korean and Japanese companies could instead find a middle ground between cheaper Chinese robots and more expensive American systems. Hyundai, which owns Boston Dynamics, and Toyota are among the major automakers investing in robotics.
Yang Fang of California-based Beagle Technology, which develops AI and robotics technology for farming, said the industry could become more regional as companies build machines for the needs of specific markets.
Chinese companies may increasingly design robots for China and nearby countries, while American companies could focus on customers in North America.
The result may not be a simple split between American and Chinese robotics. Instead, the industry could develop into several regional markets, with Chinese companies using their manufacturing scale and lower costs to compete around much of the world, while American and allied companies focus on markets where security and trusted supply chains are more important.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
