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. The drone tariffs take effect in September, with additional component tariffs phased in by 2027.
The moves are part of a broader U.S. effort to limit certain foreign technology in strategic industries. The FCC’s Covered List, established in 2021, began with telecommunications and surveillance equipment from companies including Huawei, ZTE and Hikvision and has since expanded to include foreign-made drones and, most recently, advanced robotic devices.
Chinese manufacturers have built large positions in both drones and humanoid robots, often selling at prices U.S. and European rivals cannot match.
If Chinese drones and humanoids are increasingly shut out of the U.S., where will the competition go next? The restrictions may protect segments of the American market, but they do not change China’s global manufacturing scale or cost advantages.
Executives and analysts speaking with Lakbima News said the likely outcome is a more fragmented global market. Chinese firms may expand in price-sensitive regions while U.S. and allied manufacturers focus where security rules matter most.
The scale gap
The U.S. and Chinese robotics industries are deeply connected, but they enter competition with different strengths. Unlike semiconductors, robotics does not rest on a single technology that one country can easily control, Ankur Saxena, investment director at TDK Ventures, told Lakbima News.
China dominates global humanoid robot manufacturing. Global shipments reached about 22,000 units in the first half of 2026, the majority from Chinese firms, according to a Counterpoint Research report. Soumen Mandal, principal analyst at Counterpoint Research, said U.S. companies operate at far smaller scale.
The world’s five largest humanoid robot makers by shipments — AgiBot, Unitree, Galbot, UBTECH and Leju Robotics — are all Chinese. Together they accounted for roughly 86% of global shipments in the first half of 2026, Counterpoint found.
That scale can compound. Lower prices let Chinese manufacturers place more robots into use, producing real-world data that improves performance. Higher production volumes then reduce costs further, Saxena said.
Mandal added that Chinese humanoid makers are lowering costs by bringing more of the technology stack in-house and leveraging China’s manufacturing base. Unitree is developing more components internally, and automakers such as XPeng can use 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 Lakbima News. “China leads in manufacturing scale, supply-chain depth and cost.”
That manufacturing edge has let Chinese companies reduce humanoid prices faster than most U.S. competitors can match. Saxena said sanctions alone will not change that cost curve; the U.S. would need sustained investment in production capacity to narrow the gap.
Where does China go next?
Even if Chinese robotics firms lose access to the American market, they still have a large domestic market and room to expand elsewhere, Saxena said. Chinese companies are already targeting price-sensitive markets with severe labor shortages across Europe, Southeast Asia, Latin America and the Middle East, Mandal told Lakbima News.
Mandal expects humanoid makers to follow a path similar to Chinese electric-vehicle companies: build scale at home, expand overseas and eventually set up local production. Countries facing labor shortages and demographic decline could become early markets, especially in manufacturing where robots can take on repetitive tasks.
The drone market offers an early example of a fragmented landscape. 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, Bentzion Levinson, founder and CEO of Virginia-based drone maker Heven AeroTech, told Lakbima News.
Levinson said Western manufacturers are unlikely to beat Chinese firms in the low-end consumer drone market. Instead, U.S. and allied companies could compete more in long-range autonomous systems for defense and critical infrastructure, where security requirements carry greater weight.
He also said the next competitive front will be the technologies that power drones and the equipment they carry, particularly energy systems. As drones take on longer missions, battery performance may determine which platforms succeed.
Agility Robotics welcomed the FCC decision in July, saying it addresses security concerns around foreign-made advanced robots before they become entrenched in the U.S. market, as happened with some drones. The company pointed to its Digit humanoid, designed and assembled in the United States, and called for continued access to tools and technologies needed for robotics research.
A more regional robotics market
“The alternative to China isn’t a purely domestic U.S. supply chain, it is a diversified allied one,” Saxena said.
That could create opportunities elsewhere in Asia. Japan has decades of experience in industrial robotics and precision manufacturing; South Korea has strengths in electronics, batteries and automobiles; and Taiwan remains central in semiconductors. None can fully replace China given how embedded Chinese components are across the robotics supply chain, Saxena added.
Asian manufacturers might emerge as a middle ground between lower-cost Chinese robots and higher-priced U.S. offerings, Mandal said. South Korea’s Hyundai, which owns Boston Dynamics, and Japan’s Toyota are among automakers investing in robotics, drawing on vehicle manufacturing and autonomous systems experience.
Yang Fang of Beagle Technology, a California-based agtech startup that uses robotics software to automate farm equipment, told Lakbima News that robotics will likely become more regional. Companies tend to design machines for labor needs, working conditions and customers in their home markets. Chinese firms may focus on products suited to China and nearby countries, while U.S. companies may target industries across North America.
The result may not be two neatly separated U.S.- and China-led industries. Instead, restrictions could accelerate regional markets: Chinese companies competing on cost and scale across much of the world; U.S. and allied manufacturers gaining ground where security requirements are strict; and firms in Japan, Taiwan and South Korea trying to carve out space between the two.
