The United States has moved to restrict foreign-made advanced robotics and drones, but industry analysts say China’s manufacturing scale may blunt the impact, likely producing a fragmented global market rather than a clean US-China split. In July and August, Washington tightened rules on foreign robotic systems and imposed steep tariffs on imported drones and components, citing national-security concerns. The drone tariffs take effect in September, with additional component tariffs following in 2027.
These actions are part of a broader U.S. effort to limit foreign technology in strategically important industries. The FCC’s Covered List, established in 2021, initially targeted telecommunications equipment from companies like Huawei and ZTE, then expanded to drones and, most recently, to advanced robotic devices. The latest move comes as Chinese manufacturers have built commanding positions in both drones and humanoid robots, often at prices U.S. and European rivals struggle to match.
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China’s Scale Advantage in Humanoid Robots
China dominates global humanoid robot manufacturing. Global shipments hit 22,000 units in the first half of 2026, with the vast majority from Chinese manufacturers, according to Counterpoint Research. The world’s five largest humanoid robot makers by shipments — AgiBot, Unitree, Galbot, UBTECH, and Leju Robotics — are all Chinese and together accounted for 86% of global shipments in that period.
U.S. companies operate at a far smaller scale, said Soumen Mandal, a principal analyst at Counterpoint Research. That advantage compounds: lower prices allow Chinese manufacturers to deploy more robots, generating real-world data that improves their technology, while higher production volumes drive costs down further, said Ankur Saxena, an investment director at TDK Ventures.
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Chinese humanoid makers are also pushing costs down by bringing more of the technology stack in-house. Unitree, for example, is developing more components internally, while automakers such as XPeng apply their experience in chips and vehicle manufacturing as they move into robotics.
“The United States leads in frontier AI, software and semiconductor innovation,” Saxena told TechCrunch. “China leads in manufacturing scale, supply-chain depth and cost.”
That manufacturing edge has let Chinese companies cut humanoid prices faster than most U.S. competitors can match. “You cannot sanction your way around a cost curve. You can only out-build it, and America has yet to begin making the decade-long investment that will require,” Saxena said.
Where Does China Go Next?
The answer may increasingly be outside the U.S. Even if Chinese robotics companies lose access to the American market, they still have a large domestic market and room to expand elsewhere, particularly in regions where demand for affordable automation is growing, Saxena said.
Chinese robotics companies are already targeting price-sensitive markets with severe labor shortages across Europe, Southeast Asia, Latin America, and the Middle East, said Mandal. He expects humanoid makers to follow a path similar to Chinese electric-vehicle companies: build scale at home, expand into overseas markets, and eventually establish local production.
The drone market offers an early glimpse of that fragmentation. The industry is splitting into two ecosystems: a U.S.-led market built around American-made, NDAA-compliant systems, and a China-led market focused on low-cost, high-volume production, said Bentzion Levinson, founder and CEO of Virginia-based drone maker Heven AeroTech.
Levinson said Western manufacturers are unlikely to beat Chinese companies in the low-end consumer drone market. Instead, U.S. and allied companies could increasingly compete in long-range autonomous systems for defense and critical infrastructure, where security requirements carry more weight.
“The next battleground is over who owns the next-gen energy and payload architecture,” he said, pointing to battery constraints in particular.
Agility Robotics welcomed the FCC’s decision in July, saying it could address security concerns around foreign-made advanced robots before they become deeply embedded in the U.S. market. The company pointed to its Digit humanoid, which is designed and assembled in the U.S., while also calling for continued access to the tools and technologies needed to advance robotics research.
A More Regional Robotics Market
“The alternative to China isn’t a purely domestic U.S. supply chain; it’s a diversified allied one,” Saxena said. That could create opportunities elsewhere in Asia. Japan has decades of experience in industrial robotics, South Korea brings strengths in electronics and batteries, and Taiwan is a major semiconductor player. But none can simply replace China, given how deeply Chinese components remain embedded across the global robotics industry.
Asian manufacturers could emerge as a middle ground between lower-cost Chinese robots and more expensive U.S. offerings, Mandal said. South Korea’s Hyundai, which owns Boston Dynamics, and Japan’s Toyota are among the automakers investing in robotics.
Yang Fang of Beagle Technology, a California-based agtech startup, told TechCrunch that robotics is likely to become more regional as companies design machines for the labor needs and working conditions in their home markets.
The result may not be two neatly separated industries. Instead, the restrictions could accelerate the emergence of regional markets: Chinese companies competing on cost and scale across much of the world, U.S. and allied manufacturers gaining ground where security requirements matter most, and manufacturers in Japan, Taiwan, and South Korea trying to carve out space between the two.
This article is for informational purposes only and does not constitute financial advice. The robotics and technology markets are volatile and subject to rapid change; readers should conduct their own research before making any investment decisions.
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