Navigating trade barriers and scale in the global robotics industry

In July and August, Washington tightened restrictions on foreign-made advanced robotic systems and imposed steep tariffs on imported drones and their components, citing national-security concerns. The drone tariffs take effect in September, with additional component tariffs scheduled for 2027.

These actions build upon the FCC’s Covered List, established in 2021, which previously targeted telecommunications and surveillance equipment from companies such as Huawei, ZTE, and Hikvision before expanding to foreign-made drones and advanced robotic devices.

The manufacturing scale gap

These policy shifts coincide with Chinese manufacturers establishing dominant positions in both drones and humanoid robots, often competing at prices that U.S. and European rivals struggle to match.

According to a report by Counterpoint, global humanoid robot shipments reached 22,000 units in the first half of the year, with the vast majority originating from Chinese manufacturers. The world's five largest humanoid robot makers by shipments—AgiBot, Unitree, Galbot, UBTECH, and Leju Robotics—were all Chinese, accounting for 86% of global shipments during that period.

Industry observers note that lower prices allow Chinese manufacturers to deploy more robots into real-world settings, generating valuable operational data that feeds back into product improvement. Higher production volumes subsequently drive costs down further.

Global market fragmentation

Rather than creating a clean separation between the U.S. and China, the restrictions are accelerating the emergence of a more fragmented global market. Chinese companies continue to expand into price-sensitive regions with severe labor shortages across Europe, Southeast Asia, Latin America, and the Middle East.

Meanwhile, U.S. and allied manufacturers are increasingly concentrating on markets where strict security requirements take precedence, such as defense and critical infrastructure. The drone industry offers an early preview of this dual ecosystem, splitting into a U.S.-led market of NDAA-compliant systems and a China-led market focused on high-volume, low-cost production.

Regional alternatives

As the industry adapts, a diversified allied supply chain may emerge across Asia. Japan contributes decades of expertise in industrial robotics, South Korea provides strengths in electronics and automotive manufacturing, and Taiwan remains central to semiconductor production.

Ultimately, robotics may evolve into a more regionalized sector. Chinese companies will likely continue competing on cost and scale across multiple continents, while U.S. and allied manufacturers secure ground where security matters most, and other Asian industrial powers carve out a distinct middle ground.