US Customs and Border Protection Intercepts DJI Drone Imports Over 'Forced Labor' Concerns
DJI: A Leading Player in the Drone Industry
SZ DJI TECHNOLOGY CO LTD, also known as DJI, is a Chinese drone manufacturer that dominates the global market. This privately-held company, which is backed by state-owned enterprises in China, is recognized as a "Chinese military company" by the US Department of Defense. According to the Uyghur Human Rights Project, DJI supplies more than half of all drones in the US and is the most recognizable drone brand among consumers.
Import Challenges for DJI
However, a recent report from Reuters revealed that DJI has encountered obstacles in importing certain drone models into the US. This is due to the intervention of US Customs and Border Protection (CBP) under the Uyghur Forced Labor Prevention Act (UFLPA). DJI informed US importers via a letter that some drone imports were halted by the CBP to verify compliance with the UFLPA. This means ensuring the drones were not manufactured using forced labor in the Xinjiang Uyghur Autonomous Region of China.
US Government's Scrutiny of Chinese-Made Drones
The letter suggested that this action is part of a broader initiative by the Department of Homeland Security to scrutinize the origins of products, particularly Chinese-made drones. DJI refuted the US government's claims as "unsubstantiated and categorically false," but acknowledged that the law allows the withholding of goods without concrete evidence.
DJI's Risk Factors
Data from Sayari, a leading counterparty and supply chain risk intelligence provider, indicates that DJI has seven major risk factors, including exposure to a Xinjiang-based entity associated with forced labor concerns.
US Government Agencies and DJI Drones
DJI products are also extensively used by US government agencies. This has raised concerns among US lawmakers, who have warned about the potential national security threats posed by these unmanned systems.
Chinese Response to US Actions
In response to the incident, state-run Chinese media outlet Global Times interviewed Lü Xiang, a research fellow at the Chinese Academy of Social Sciences. Xiang criticized Washington for using the UFLPA to target the drone maker, suggesting that the move could raise global concerns about future China-US relations.
Implications for the US Drone Industry
The question remains as to which US drone industry the Biden administration is seeking to protect. Currently, there doesn't seem to be a US-based drone company that can match or surpass DJI in terms of affordability and performance.
Bottom Line
The recent actions by the US Customs and Border Protection against DJI, a leading drone manufacturer, highlight the growing concerns over forced labor in China and its potential impact on international trade. This development raises several questions: How will this affect the drone industry in the US and globally? Will this lead to a shift in drone manufacturing to other countries? What are your thoughts on this matter? Feel free to share this article with your friends and discuss it further. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
