New Tariffs on US Drones Boosted Manufacturers' Stock Prices

Following U.S. President Donald Trump's imposition of new tariffs on drones and their components, shares of American drone manufacturers rose significantly on Friday.

Unusual Machines' stock increased by 14%, Red Cat Holdings by 8%, Ondas Holdings by 4%, and AeroVironment by 2.8%.

Trump signed an executive order aimed at strengthening the U.S. domestic drone production and supply chain. Under the new measures, a 100% tariff will be imposed on drones with a maximum takeoff weight exceeding 25 kilograms or devices equipped with thermal imaging technology. The same rate will apply to their stations and significant components.

On smaller drones and other components, the tariff rate will be 25%.

Additionally, reduced tariff rates will apply to products imported from certain U.S. allied countries. Products from the European Union, Japan, South Korea, Switzerland, Taiwan, and Liechtenstein will face a 15% tariff, while products from the United Kingdom will face a 10% tariff, provided the majority of technologies and components are manufactured in the respective countries.

Tariffs on the most sensitive products will take effect 21 days after the executive order is signed, while tariffs on less sensitive components will take effect after 180 days. Products approved for exceptions will also receive a tariff deferral.

The order also grants the Secretary of Commerce the authority to create a domestic production incentive program that will encourage companies seeking to make new investments in local production of drones and their components.

According to a White House statement, drones are critically important for modern armed conflicts and future military operations, while dependence on foreign components poses risks to national security and cybersecurity.