US Government Adds DJI to Trade Blacklist for Chinese Government

DJI – one of the largest and most popular drone companies in the world – has been added to the US Department of Commerce’s list of entities, designating the Chinese company as a national security concern and banning US companies from exporting technology to the company. Reuters he first reported the news, citing a conference call with a senior sales official. The Commerce Department did not immediately respond to a request for additional details.

The ban was implemented through the same mechanism as the US government’s continued ban on Huawei products and focuses primarily on blocking the export of US technology to the drone manufacturer. However, the ban will make it difficult for US companies to supply parts or components for DJI to use in its drones, which is likely to disrupt the company’s supply chain. Depending on China’s response to the action, it may make it difficult to sell DJI products directly to US stores.

The ban is set to take effect when the list is officially updated at 11:15 AM ET.

The new additions to the list of entities came along with a more specific action against the Chinese company Semiconductor Manufacturing International Corporation, or SMIC, which was listed in response to alleged links between the company and the Chinese military.

Fewer explanations were given for adding DJI to the list, although Commerce said other companies had been added “for actions deemed contrary to national security or US foreign policy interest.” This is probably a reference to DJI’s involvement in providing drones to the Chinese government for the supervision of detention camps in Xinjiang Province, as detailed in a Bloomberg Working week report.

But the U.S. government has also mentioned several concerns in the past about drone security issues, which are largely made in China and contain Chinese parts. The Interior Ministry has announced plans to target its drone fleet while examining whether there are major security issues related to Chinese espionage or cyber attacks. The Justice Department also banned the purchase of overseas drones – which include DJI products – using the agency’s funds in October, citing similar security concerns. The Department of Defense has certified several other drones from competitors such as Parrot and Skydio for government use, after several years of review.

It is a significant escalation of President Trump’s continued efforts to block Chinese technology companies from operating in the United States. Trump placed Huawei on the list of executive entities in May 2019, citing national security concerns. Europe and the United Kingdom have largely refused to follow suit and continue to use Huawei hardware in their telecommunications networks. Trump has taken similar steps to prevent TikTok and WeChat from being hosted in US app stores, although efforts have been backed by court challenges and both apps remain widely available.

It is unclear whether President-elect Biden will continue these policies after taking office on January 20.