US companies can no longer do business with drone maker DJI
Also included in this round of bans, Semiconductor Manufacturing International Corporation.
Even though President Trump is practically one foot out from the White House, his determination to block Chinese technology is unwavering, further escalating the trade war with China. His latest effort in that direction is banning all US-based companies from doing any business with DJI – one of the most popular and biggest drone makers worldwide.
The US Department of Commerce added DJI to its list of Chinese companies labeled a threat to US national security. The news was first reported by DroneDjand was later confirmed by Reuters. They got official confirmation from a senior commerce official.
However, it seems that the ban is not totally out of the blue as it was previously assumed. Long before the ban was put in place, the drone maker stands accused of playing a role in the oppression of minorities and human rights in China.
Allegedly, the Chinese Communist ruling party used DJI’s drones to monitor Uighurs, an oppressed Muslim minority in China. There is even a video of shackled Uighurs allegedly recorded by a DJI drone, operated by a state security member.
Amid Donald Trump’s policy to be “tough on China,” other Chinese companies were also banned from doing business with US-based companies. Last year in May, it was Huawei that found its place on the same list as DJI, while SMIC (Semiconductor Manufacturing International Corporation) is one of the latest additions to the list as well.
The level of disruption that the companies had to endure is different for each company
As far as DJI, it is still unclear the extent of their exposure as almost all of the parts it needs to make its drones are manufactured in China. If some parts are supplied from US-based companies, then the ban can disrupt their supply chain.
Despite the ban, DJI products will still be available on the US market in the same manner as Huawei products are.
In a Bloomberg article written by Ashlee Vance and Blake Schmidt, it was analyzed how DJI got to dominate the drone market and is accountable for 77% of all consumer drone sales in the US. Vance and Schmidt concluded and tried to elaborate with data and stats that DJI is now paying the price for their market dominance.
It remains unclear whether Joe Biden’s administration will continue Trump’s tough stance on Chinese companies deemed a threat to national security and international human rights.
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