The Two Drone Policies That Pull Against Each Other

In July 2025, Defense Secretary Pete Hegseth put the contradiction in writing.

While our adversaries have produced millions of cheap drones, we were mired in bureaucratic red tape. — Pete Hegseth

The memo was an urgent call to close the drone gap — "our adversaries have produced millions of cheap drones, we were mired in bureaucratic red tape" — but it also named, in the same document, the mechanism that would make closing that gap more expensive.

Next year I expect to see this capability integrated into all relevant combat training, including force-on-force drone wars. — Pete Hegseth

That sentence now sits between two policies the United States is running simultaneously. On one side, a wall: 100 percent tariffs on foreign drone imports, imposed in September 2025 and renewed this week ^[1][2], and an FCC ban on "military-grade" Chinese drones that also closes the component-part loophole, barring any device containing logic-bearing hardware from Huawei or ZTE ^[3]. The effect is to make foreign drones — particularly those from DJI, which holds roughly 70 percent of the US commercial market — unavailable or unaffordable, a result that aligns with the administration's parallel push to build a domestic manufacturing base. On the other side, a pivot: after losing 45 MQ-9 Reaper aircraft worth over $1.3 billion during the Iran conflict ^[4], the Pentagon is racing toward cheap, expendable swarm drones. The Army wants a million drones by 2027 ^[5]. The Pentagon is negotiating $1.1 billion to stockpile 300,000 low-cost attack drones ^[6]. It is running a $100 million prize for autonomous swarming technology ^[7]. The direction is clear: quantity over cost, expendability over survivability. The problem is the math. Iran's Shahed drones cost between $20,000 and $50,000 each; the US interceptors designed to stop them run over $1 million — a ratio of twenty to one or worse ^[8][9]. Ukraine, fighting the same threat, built interceptors for $1,000 to $2,000 — but did so using the exact Chinese components the US is now banning ^[9]. The cheap-drone revolution the Pentagon wants to join was built on the supply chain the tariffs and the FCC just walled off. Ukraine is the model the US is emulating, and the numbers explain why. Its drone industry grew from ten producers in 2022 to more than five hundred by 2025, turning out roughly four million drones annually — a figure that surpasses the estimated combined output of all NATO countries ^[10][11]. The country is now targeting seven million by 2026. But even Ukraine is hitting the same wall. It has begun sourcing components from Taiwan through intermediaries in Poland, Czechia, and the United States — and paying more for them than it paid for Chinese parts ^[12]. The world's most successful cheap-drone producer cannot make cheap drones without the supply chain the US just banned. Taiwan offers a controlled experiment in what a China-free drone industry actually costs. The island is positioning itself as a non-Chinese supplier to the US military, with Anduril signing agreements and Thunder Tiger's Overkill kamikaze drone meeting Pentagon requirements ^[13]. But Taiwan's own target is 200,000 drones annually by 2030 ^[14] — a fraction of Ukraine's current four million. And it faces what its own officials describe as "high manufacturing costs for non-Chinese components and a lack of foreign contracts."

the country woke up to the opportunity — Betsy Shieh

The gap between 200,000 and four million is not a production shortfall that time will close. It is the cost of decoupling. The domestic industry is responding. The FCC reports that more than $4 billion has been tracked toward US-based drone production since December 2025 ^[3]. AeroVironment projects 13 percent annual sales growth with positive free cash flow expected next year ^[15]. The Air Force has successfully decoupled autonomy software from hardware in its Collaborative Combat Aircraft program, fielding prototype drone wingmen it intends to build by the thousand ^[16]. A Ukrainian manufacturer, General Cherry, is partnering with a New Hampshire firm to produce FPV and interceptor drones on American soil ^[17]. The industrial base is growing. But it is growing from a base too small to close the gap between Taiwan's 200,000-unit target and Ukraine's four million — and at a cost penalty the Pentagon has already admitted in writing. The Air Force's budget tells the rest of the story. The service has requested $996.5 million in fiscal year 2027 for Collaborative Combat Aircraft — the attritable, lower-cost replacement for the Reaper ^[18]. That is the pivot, in dollars. But Air Force Secretary Meink has also stated plainly:

No other platform is even close to the MQ-9. — Kenneth S. Wilsbach

The service that lost a quarter of its Reaper fleet in Iran is funding the cheap replacement while keeping the expensive platform in service. It is running both policies at once, because it cannot afford to choose — and because the cheap alternative is not yet cheap enough to replace what it is supposed to replace.