China tightens drone exports, sanctions U.S. firms in latest tech retaliation

Beijing is leveraging its dominance over global drone production as it spars again with Washington over widening U.S. curbs on technology and trade, unleashing a barrage of retaliatory actions on Wednesday in what it described as a “restrained” response.

China’s Commerce Ministry stiffened controls on the exports of drones as it announced four sets of countermeasures to recent U.S. moves. It cited decisions such as the Federal Communications Commission’s ban on some foreign-made robots and power inverters and the blacklisting of more than 40 Chinese companies accused of using forced labor.

The tit-for-tat standoff now pitting Beijing against Washington is reviving tensions between the world’s two biggest economies and straining their fragile trade truce. President Xi Jinping is scheduled to meet President Trump in the U.S. next month, after agreeing to build a relationship of “constructive strategic stability” during their summit in the Chinese capital in May.

Beijing has been particularly irked by the timing of U.S. sanctions against the 43 Chinese firms, which came just a day after Vice Premier He Lifeng held a video call with U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer last week.

The recent U.S. measures “seriously violated the important common understandings reached by the two heads of state and severely damage China’s legitimate rights and interests,” a spokesperson for the Commerce Ministry said in a statement. “China has no choice but to take necessary countermeasures in response.”

But the spokesperson also signaled Beijing’s willingness to keep relations on track, calling its retaliation “generally restrained” while urging the US to immediately revoke its measures and return to consultations to resolve differences.

As part of the retaliation package, sales to the U.S. of drones, their key components and related technologies listed on China’s dual-use export control list will be subject to “strict case-by-case review,” the ministry said.

China is the world’s dominant manufacturer of unmanned aerial vehicles, with Shenzhen-based DJI Technologies accounting for about 70% of the U.S. commercial drone market as of last year.

But the U.S. has moved to reduce that reliance.

Last December, the FCC announced a ban on most foreign-made drones and critical components for unmanned aircraft systems. The prohibition applied only to new drone imports and sales and not those that had already been sold or were in use.

On Wednesday, the Commerce Ministry also sanctioned six U.S. entities, including Applied DNA Sciences and Stratum Reservoir, for what it said was their involvement in US sanctions over Xinjiang. In addition, it sanctioned Compliance Testing for helping the FCC impose the measures against China.

China will also conduct a foreign trade national security investigation, which takes aim at imported printers, copiers, and other office imaging equipment with imported software, the ministry said.

Beijing’s retaliation comes amid reports of further U.S. curbs on Chinese technology and products. The FCC is drafting an order to ban Chinese-made data center components, Bloomberg reported Tuesday, citing a person familiar with the matter. Reuters earlier said earlier the U.S. government agency was considering barring imports of new models of Chinese optical transceivers.

“If the U.S. side insists on introducing new restrictive measures against China, China will take further countermeasures,” the Commerce Ministry spokesperson said in the statement.