Trump tariffs send drone stocks flying
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Illustration: Brendan Lynch/Axios
American drone companies got a sudden lift in the stock market Friday after President Trump announced plans to impose tariffs on imported drones.
Why it matters: National security experts have long bemoaned the American reliance on foreign sources for drone production, particularly China.
- "President Trump's drone tariff program will protect the national security of the United States and its defense and defense-adjacent industrial base, supporting and creating American jobs," the White House said.
The big picture: Several drone stocks soared Friday, including:
- Unusual Machines, which was backed by Donald Trump Jr. in 2024 when he joined its advisory board, was up 24% in late morning trading.
- Red Cat Holdings, which pivoted from hobby drones to military ones, rose 8%.
- Ondas, AeroVironment and Kratos Defense & Security Solutions were up 5%, 1.2% and 2.1%, respectively.
Zoom in: Trump announced multiple different buckets of drone tariffs:
- 100% on large drones with "capabilities that are particularly sensitive for national security purposes," including thermal imaging.
- 25% on drone parts and smaller drones "that lack certain capabilities that particularly implicate national security."
- 15% on drones and parts from the European Union and several other key allies; and 10% on units from the U.K.
The desire to boost the American drone manufacturing sector has become increasingly urgent after the Russia-Ukraine war illustrated the significant utility of drones in modern warfare.
- "There are concerns, however, that the U.S. drone industry will be unable to provide the DOD with the platforms it will need in a future conflict," according to a recent report on the industry by the Center for Security and Emerging Technology at Georgetown University.
💠Our thought bubble via Axios Future of Defense author Colin Demarest: This deepens the U.S.-China rivalry at a time when sketchy weapon parts and complicated supply chains are top of mind.
