In a new move in the ongoing tension between the United States and China, Chinese authorities have targeted Skydio, a leading U.S. drone company. The company has been supplying drones to Ukraine for military use, but now faces serious challenges after China imposed sanctions that cut off its access to essential drone parts, especially batteries. This has left Skydio scrambling to find new suppliers in order to continue its operations, which could affect its commitments to Ukraine.
Skydio’s Critical Supply Chain Problem
Skydio, a California-based company known for its advanced drone technology, is the biggest American drone producer. Many of its drones are used by military forces, and the company recently provided more than a thousand drones to Ukraine, assisting in intelligence gathering and tracking Russian forces. Skydio’s drones are even used to record evidence of Russian war crimes. But these operations are now at risk.
On October 11, China imposed sanctions on Skydio. This means that Chinese companies can no longer provide Skydio with essential parts. This includes batteries from a supplier called Dongguan Poweramp, a subsidiary of Japan’s TDK that manufactures these batteries in China. The company relies heavily on these batteries to power its drones, and since it hasn’t yet found alternative suppliers, it has begun rationing the few batteries it has left. This shortage means Skydio cannot send as many drones with batteries as before, creating major supply concerns for Ukraine’s military, which counts on the drones for security and intelligence.
In response, Skydio has reached out to the U.S. government for support. The company’s CEO, Adam Bry, even met with key U.S. officials, including Kurt Campbell, the deputy secretary of state, and members of the White House staff. Skydio is pushing for the U.S. government to help find a solution quickly, as the company believes this supply crisis could affect more American companies if China continues using similar tactics.
China’s Reason for Sanctions
The sanctions on Skydio were imposed as part of China’s retaliation for recent U.S. military actions in Taiwan. The U.S. government recently approved the sale of advanced attack drones to Taiwan, an island close to China that the Chinese government views as part of its territory. China has long opposed any U.S. military support to Taiwan and has responded by imposing restrictions on U.S. companies like Skydio that operate in the defense sector.
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China’s choice to target Skydio is also strategic. The company is considered a competitor to DJI, a Chinese company that leads the global drone industry. By disrupting Skydio’s supply chain, China may be trying to give DJI an advantage in the international drone market. U.S. officials have stated that this is likely part of China’s broader attempt to weaken American companies while boosting Chinese businesses.
Skydio’s CEO Bry has shared his view that the Chinese government’s actions reveal a new reality: China is willing to use economic influence over supply chains as a weapon to advance its interests. According to Bry, the sanctions are an attempt to remove a major American drone company from the global market, possibly to encourage more dependence on Chinese suppliers.
Growing Concerns Over China’s Economic Influence
This is not the first time China has used economic measures to gain influence. China has previously controlled the flow of rare earth minerals, materials used in electronics, and other critical items to pressure countries on political matters. Recently, China warned Japan that it might restrict exports of important minerals if Japan adopts export rules backed by the United States.
This kind of strategy has raised concerns in the U.S. government, particularly regarding the American reliance on China for critical supplies. Several high-profile U.S. defense companies, such as Lockheed Martin, Raytheon, Boeing, and Anduril Industries, have already been sanctioned by China. These companies manufacture military equipment, including drones, that have been sold to Taiwan. Skydio’s recent contract to supply drones to Taiwan’s firefighting forces likely contributed to China’s decision to impose sanctions on it.
Now, with Skydio facing immediate supply shortages, the Biden administration and other U.S. leaders are watching the situation closely. They hope that this incident serves as a warning to other U.S. companies about the risks of depending on Chinese suppliers. Meanwhile, Skydio is looking for new battery sources in Taiwan and other parts of Asia to keep its production on track.
China’s actions have highlighted the vulnerability of U.S. companies with supply chains tied to Chinese suppliers, especially as tensions grow between the two superpowers. While Skydio and the U.S. government explore solutions, Chinese officials have made it clear that they may target more companies in the future as part of a larger strategy to exert economic influence.
