In July and August, Washington tightened restrictions on foreign-made products. advanced robotic systems and tax high tariffs on imported drones and their components, both measures citing national security concerns. Tariffs on drones have an effect in September, followed by tariffs on additional components in 2027.
These measures are part of a broader US effort to restrict foreign technology in strategically important industries. The FCC Covered ListFounded in 2021, it initially focused on surveillance and telecommunications equipment from companies such as Huawei, ZTE and Hikvision before expanding into foreign-made drones and, more recently, advanced robotic devices.
The latest move comes as Chinese manufacturers have built dominant positions in both drones and humanoid robots, often competing at prices that their American and European rivals struggle to match.
Taken together, the restrictions are raising a larger question for the global robotics industry: If Chinese drones and humanoids are increasingly excluded from the United States, where will the competition move next?
The restrictions may protect parts of the U.S. market, but they do not directly address China’s global manufacturing scale or its cost advantages.
Analysts and industry executives who spoke to TechCrunch said the result may be less of a clear divide between the United States and China than a more fragmented global market, with Chinese companies expanding elsewhere while American and allied manufacturers compete in markets where security requirements are more important.
The scale gap
The American and Chinese robotics industries remain deeply connected, but the two countries enter the competition with very different advantages. Unlike semiconductors, robotics does not rely on a single technology that a country can easily control, said Ankur Saxena, chief investment officer at TDK Ventures.
China dominates global manufacturing of humanoid robots, with global shipments reaching 22,000 units in the first half of this year, the vast majority from Chinese manufacturers, according to a report. counterpoint report. U.S. companies, by contrast, are operating on a much smaller scale, said Soumen Mandal, principal analyst at Counterpoint Research.
The world’s five largest humanoid robot manufacturers by shipments (AgiBot, Unitree, Galbot, UBTECH and Leju Robotics) were all Chinese and together accounted for 86% of global shipments in the first half of 2026, according to Counterpoint.
That advantage could be compounded. Lower prices allow Chinese manufacturers to use more robots, generating real-world data that can improve their technology. Higher production volumes, in turn, can further reduce costs, Saxena said.
Mandal said Chinese humanoid makers are also reducing costs by bringing more technology in-house and leveraging China’s existing manufacturing base. Unitree, for example, is developing more components in-house, while automakers like XPeng can leverage its expertise in chips and vehicle manufacturing as they move toward robotics.
“The United States leads innovation in artificial intelligence, software and semiconductors,” Saxena told TechCrunch. “China leads in manufacturing scale, supply chain depth and costs.”
That manufacturing advantage has allowed Chinese companies to reduce humanoid prices faster than most American competitors can match.
“You can’t get around a cost curve. You can only get over it, and the United States has yet to begin making the decade-long investment it will require,” Saxena said.
Where is China headed next?
The answer may increasingly lie outside the U.S. Even if Chinese robotics companies lose access to the U.S. 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 in Europe, Southeast Asia, Latin America and the Middle East, Mandal said.
Mandal expects humanoid makers to follow a similar path as Chinese electric vehicle companies: build scale at home, expand into overseas markets and eventually establish local production. Countries facing labor shortages and demographic decline could become the first markets for humanoids, particularly in manufacturing, where robots can perform repetitive jobs.
The drone market offers an early glimpse of what that more fragmented robotics landscape could look like. The industry is increasingly splitting into two ecosystems: a U.S.-led market built around NDAA-compliant American-made systems, and a China-led market focused on high-volume, low-cost production, said Bentzion Levinson, founder and CEO of Virginia-based drone maker Heven AeroTech.
Levinson said Western manufacturers are unlikely to overtake Chinese companies in the low-end consumer drone market, where cost remains a major advantage. 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.
Levinson sees the next competitive frontier shifting from the drones themselves to the technology that powers them and the equipment they carry. “The next battleground is who owns the next-generation power and payload architecture,” he said, pointing in particular to battery limitations. As drones become more capable, he added, battery limitations could make power systems an increasingly important point of competition.
Agility Robotics welcome the FCC decision in July, saying it could address safety concerns around advanced foreign-made robots before they take deep root in the U.S. market, as has happened in the drone industry. The company highlighted its Digit humanoid, which is designed and assembled in the US, while calling for continued access to the tools and technologies needed to advance robotics research.
A more regional robotics market
“The alternative to China is not a purely domestic US supply chain; it is a diversified chain of allies,” Saxena said.
That could create opportunities in other parts of Asia. Japan has decades of experience in industrial robotics and precision manufacturing, South Korea brings strengths in electronics, batteries and automobiles, and Taiwan is a major player in semiconductors. But none can simply replace China, Saxena said, given how deeply embedded Chinese components remain in the global robotics industry.
Asian manufacturers could emerge as a middle ground between lower-cost Chinese robots and more expensive American offerings, Mandal said. South Korea’s Hyundai, owner of Boston Dynamics, and Japan’s Toyota are among automakers investing in robotics, leveraging their expertise in vehicles, manufacturing and autonomous systems as they move toward humanoid robots.
Yang Fang of Beagle Technology, a California-based agtech startup that uses artificial intelligence and robotics software to convert conventional farm equipment into autonomous machines, told TechCrunch that robotics is likely to become more regional as companies design machines for labor needs, working conditions and customers in their domestic markets. Chinese robotics companies, for example, may focus on products suitable for China and nearby markets, while U.S. companies are more likely to build for industries across North America, he said.
The result may not be two clearly separate US- and Chinese-led robotics industries. Instead, the restrictions could accelerate the emergence of regional markets: Chinese companies competing on cost and scale in much of the world, American and allied manufacturers gaining ground where safety requirements matter most, and manufacturers in Japan, Taiwan and South Korea trying to carve out space between the two.
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