Shares of U.S. drone manufacturers surged following Trump's new tariffs
The U.S. has imposed tariffs of up to 100% on imported drones and components / Photo: kratosdefense.com
Shares of U.S. drone manufacturers surged during trading on August 14. The rally was triggered by the Donald Trump administration’s decision to impose new import duties on drones and their components, in an effort to boost domestic production and reduce dependence on foreign suppliers.
Details
Shares of Unusual Machines—of which the president’s son, Donald Trump Jr., is a shareholder and member of the advisory board—jumped 25% at the close of trading on August 14. Red Cat shares rose 8.8%. Kratos shares rose by nearly 3%.
The stock price was affected by changes to the rules governing drone imports into the U.S. According to an executive order signed by Trump, imports of large drones with “sensitive” military capabilities, including thermal imaging equipment, will be subject to a 100% tariff. For small drones without such capabilities, the tariff rate will be 25%. For drones and components from the EU, Japan, Liechtenstein, South Korea, Switzerland, and Taiwan, the tariff rate is set at 15%, and for the United Kingdom, it is 10%.
The administration stated that the U.S. needs to rapidly ramp up drone production to strengthen national and economic security. Dependence on foreign suppliers of components, particularly from China, poses risks to U.S. security and cybersecurity.
The new tariffs will take effect within three weeks, except for those on non-critical components—which will take effect in six months. The Department of Commerce will also be able to launch a program to support the relocation of manufacturing to the United States, according to a White House press release.
The decision is part of the Trump administration's broader plans to develop the U.S. defense industry, according to CNBC. In February 2026, the U.S. launched the Drone Dominance program with a budget of more than $1 billion, aimed at increasing the production of small, low-cost drones. In addition, the administration has requested a record $1.5 trillion for defense in fiscal year 2027, including $75 billion for drones, CNBC notes.
This article was AI-translated and verified by a human editor
