Alexander Glinz, CC BY-SA 3.0
China-based drone maker DJI challenges the U.S. Defense Department’s designation amid rising geopolitical concerns.
Following closely upon a report outlining a customs issue affecting imports, DJI has filed suit against the U.S. DoD. According to an article published on Reuters, DJI, the world’s largest drone manufacturer, filed a lawsuit against the U.S. Department of Defense (DoD) on October 18, challenging its inclusion on a list of companies alleged to have ties to the Chinese military. DJI claims that this designation is incorrect and has caused significant harm to the company’s business.
DJI, responsible for more than half of all commercial drones sold in the U.S., is asking a federal judge to order its removal from the list. The company stated it “is neither owned nor controlled by the Chinese military,” emphasizing that the Defense Department’s decision has led to financial losses and damaged its reputation. According to DJI, the “unlawful and misguided decision” has resulted in terminated contracts and a stigmatization of the company as a national security threat.
The Broader Geopolitical Context
As geopolitical pressures between the U.S. and China continue to rise, U.S. lawmakers are employing various strategies to limit the use of Chinese-manufactured technology, including drones. Security and supply chain concerns are at the forefront of these efforts. Recent evidence of Chinese state-backed hacking operations against US critical infrastructure have added to fears surrounding many Chinese-made technology products, further exacerbating the situation. (More information can be found here.) FBI Director Christopher Wray told Congress in January of this year that Chinese-backed hacking units are preparing to “wreak havoc and cause real-world harm” to the US.
Reuters reports that DJI’s lawsuit is the latest in a series of legal challenges by Chinese firms impacted by Washington’s actions. Other major Chinese companies on the Defense Department’s list include aviation giant AVIC, memory chip maker YMTC, and telecommunications company China Mobile. While some companies, such as lidar manufacturer Hesai Group, have recently succeeded in having their names removed from the list, Hesai was swiftly relisted on national security grounds, illustrating the intensity of U.S. scrutiny.
The Impacts on DJI
DJI’s inclusion on the Defense Department list has had substantial business implications. The company argues that U.S. and international customers have severed existing agreements and refused to engage in new contracts. The company also stated that it had attempted to engage with the DoD for more than 16 months but received no response, leaving it “no alternative other than to seek relief in federal court.”
The designation serves as a warning to U.S. companies about the potential national security risks associated with doing business with DJI. Federal agencies have also banned contracting with DJI as a result of the listing.
As tensions between the U.S. and China persist, drone manufacturers, particularly DJI, find themselves in the crosshairs of both government policy and public perception. With drone technology playing a critical role in defense, public safety, and infrastructure, the outcome of this lawsuit may have significant implications for the industry’s future.
Looking Ahead
This legal battle unfolds at a time when the U.S. is increasingly focused on securing its technology supply chains and mitigating risks from foreign-made products.
With the outcome of DJI’s lawsuit pending, the broader issue of Chinese-made technology in the U.S. remains unresolved. While lawmakers view the security issues for critical infrastructure as significant, some drone users and service providers say that the US drone industry cannot yet provide products of comparable price and functionality, particularly in the prosumer space, where DJI offers aircraft at under $2,000. As geopolitical tensions continue, the U.S. government is likely to increase scrutiny of foreign companies, while the commercial drone industry will need to adapt to this evolving regulatory landscape.
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