ARGUMENT: CHINESE DRONESU.S. Reliance on Chinese Drones: A Sector for the Next CHIPS Act?

Members of Congress from both parties are beginning to pay attention to the issue of drones and national security. The American Security Drone Act of 2023(ASDA) seeks to regulate federal agency procurement and use of certain foreign-made unmanned aircraft systems (UASs), or drones.

Annie I. Antón and Olivia C. Mauger write in Lawfarethat the Increasing Competitiveness for American Drones Act of 2023(ICADA) establishes a new office within the Federal Aviation Administration (FAA) to bolster the United States’ position in the China-dominated commercial drone industry. In addition, a discussion draft of a bill for drone research and development was the basis for a Senate hearingin late March.

They add:

These initiatives call attention to two aspects of the U.S.’s precarious global position with respect to drones. First,the U.S. is lagging in market share and innovation in the drone industry. The global drone marketwas worth over $30 billion in 2022 and is projected to increase to over $55 billion by 2030. However, China’s Da Jiang Innovations (DJI) had a 54 percent share of the global commercial drone marketas of 2021. Skydio, the most prominent American drone company, had approximately 3 percent share in the same year. Second, despite selected bans by various entities in the U.S.(most recently in Florida and Arkansas), numerous U.S federal agencies continue to rely on foreign-made drones,particularly DJI drones, with documented security risks.These risks are both political and technical. Politically, the risks stem from DJI’s obligation by lawto support the People’s Republic of China’s (PRC) state intelligence work. Technically, a study published in late 2022demonstrates that DJI drone security is easy to exploit by remote malicious actors using commonly available software and tools.

The recent Chinese “weather” balloon’sbrazen traversing over U.S. sovereign territory and use of DJI drones supporting war fighters on both sides of the Russia-Ukraine Warhave vividly alerted U.S. policymakers to Chinese leadership in this sector. On the battlefield, drones play a key role in reconnaissance and attacks. A foreign adversary dominating the world market could deny the U.S. effective drone support in warfighting or potentially disable U.S. drones in a conflict. Last year, a Chinese CH-4 military drone entered the Taiwanese air defense identification zone. The CH-4 is China’s counterpart to the U.S. military’s MQ-9 reaper. There are also reports that Chinese-made drones are already likely being used to conduct surveillance on U.S. infrastructure.In light of these risks,strategically and quickly strengthening domestic drone manufacturing capabilities is imperative to bolster U.S. national security.The ASDA and ICADA present a critical opportunity to address this need.

Building on the bipartisan consensus to enact the 2022 Creating Helpful Incentives to Produce Semiconductors and Science (CHIPS) Act, there is a compelling case that UASs should be a next sector for similar action. The CHIPS Act represents a $280 billion investment in domestic semiconductor production, research and development, and overall U.S. competitiveness in innovative technology. It could serve as a model for the drone sector as policymakers try to strengthen both the ASDA and ICADA within a national security context. 

Antón and Mauger conclude:

The CHIPS Act could serve as a model for addressing national security risks resulting from reliance on key foreign-provided technologies. Any new legislation could amplify and build on the UAS-relevant provisions of the CHIPS Act.
….
To build public support, Congress should consider the possibility of combining the ASDA and the ICADA, along with any R&D initiatives into an overall drone package reminiscent of the CHIPS Act…. To address the current national security and cybersecurity issues discussed above, policymakers could get on a path to a similar solution for the U.S. and its allies with respect to UASs. Thus, a unified piece of legislation that blends the ASDA and the ICADA could be considered for drones. As they currently stand, the ASDA is scoped for the government and the ICADA is scoped for the commercial delivery industry. Commercial safety risks, however, are not sufficiently distinct from national security risks to warrant a separate bill. This is increasingly important given that commercial off-the-shelf solutions may comprise key components of future strike and reconnaissance drones for the U.S. military. A combined bill could better focus attention on the serious challenges facing the entire UAS sector. 

In short, the objective is to ensure the U.S. is a global leader in producing secure and safe drone technologies with a strong manufacturing capability bolstered by a resilient and reliable domestic supply chain.