Commerce Department Drops Drone Restrictions as Trump Prioritizes Xi Diplomacy Over China Hawks

I spent the morning reading a story that should make every drone pilot pay attention to what is happening in Washington, not just with the FCC, but with the broader diplomatic chess game being played between the United States and China. While the FCC’s December 22 ban on foreign drones grabbed all the headlines, the Commerce Department was quietly working on something far more sweeping. That effort just collapsed, and the reason why matters more than the headline.

The U.S. Commerce Department has withdrawn its plan to impose restrictions on Chinese drones to address national security concerns, Reuters reported Friday. The proposal, which was sent to the White House for review on October 8, was pulled from consideration on Thursday, according to government records. A government official told Reuters the decision to withdraw the drone rule appeared tied to the Trump administration freezing some actions targeting China ahead of the president’s planned meeting with Chinese President Xi Jinping in April.

What the Commerce Department Was Planning

We’ve been tracking the Commerce Department’s proposed drone restrictions since January 2025, when the agency first announced it was considering rules that could restrict or ban Chinese-made drones from the American market. The Commerce Department wasn’t just looking at banning drones. It was targeting the entire supply chain: onboard computers, communications systems, flight control systems, ground control stations, operating software, and data storage.

If implemented, these restrictions would have been separate from and potentially more severe than the FCC’s December action. The FCC ban blocks new foreign drones from receiving equipment authorizations. The Commerce restrictions would have gone after the technology inside the drones, regardless of who slapped their logo on the outside. This was the hammer that could have crushed DJI’s shell company strategy entirely.

In September, the Commerce Department announced it would issue regulations targeting Chinese drone imports as early as that month. Chinese imports dominate the U.S. commercial drone market, with more than half coming from DJI. The Commerce Department indicated it could also target drone systems including onboard computers, communications and flight control systems, ground control stations, operating software and data storage.

DJI’s December Lobbying Push

Reuters reports that the White House and Commerce held meetings on the drone proposal through December 19 and met with DJI officials on December 11. According to records posted online, DJI told officials that imposing blanket restrictions on drones manufactured in China would be “unnecessary, conceptually flawed, and would be extremely harmful to U.S. stakeholders.”

This wasn’t DJI’s first attempt to engage Washington. We reported in August that Adam Welsh, DJI’s head of global policy, spent nearly two weeks in Washington in July trying to secure meetings with lawmakers across parties. Most refused to sit down with him. Florida Republican Senator Rick Scott refused meetings, calling DJI part of a “despicable government” that wants to “spy on us.” New York Republican Representative Elise Stefanik similarly declined, with her spokesman labeling DJI a “Communist Chinese front group.”

DJI sent letters to five federal agencies on December 1 making what may have been its final appeal before the December 23 FCC deadline. The company has spent nearly $3 million on federal lobbying this year, not to avoid security reviews but to make them happen. The irony has always been that DJI was begging for the audit that nobody wanted to conduct.

The Trump-Xi Connection

The timing of this withdrawal is not coincidental. President Trump met with Chinese President Xi Jinping in Busan, South Korea on October 30, 2025, just three weeks after the Commerce Department sent its drone proposal to the White House for review. That meeting resulted in a temporary trade truce, with the United States suspending additional tariffs on China until November 10, 2026, and China agreeing to resume soybean purchases and relax some rare earth export restrictions.

More significantly, Trump accepted Xi’s invitation to visit Beijing in April 2026, with Xi expected to make a state visit to the United States later in the year. Washington has been freezing some actions targeting China ahead of these planned meetings. The Commerce Department’s decision to withdraw the drone rule appears to be part of that diplomatic calculation.

This creates a fascinating split in U.S. drone policy. The FCC ban remains in place. Chinese dronemakers cannot obtain approval to sell new models in the U.S. But the Commerce restrictions that would have targeted the supply chain and potentially blocked even the shell company workarounds are now dead. The FCC’s sweeping action on December 22 banned all foreign-made drones and critical components, but it was always a blunt instrument that gave DoD and DHS the power to grant exemptions.

The FCC Restrictions Remain

Let’s be clear about what did and didn’t change. The FCC restrictions mean Chinese dronemakers will not be able to obtain the necessary approval to sell new models of drones or critical components in the U.S. They do not prohibit the import, sale, or use of any existing drone models the agency previously authorized, nor do they impact any previously purchased drones.

As DJI confirmed in its response to the FCC ban: “Today’s development will not affect customers who already own DJI products. These existing products can continue to be purchased and operated as usual.”

The company also left the door open for future product launches, noting that “new products may, in the future, be cleared for launch based on determinations made by the Department of Defense and the Department of Homeland Security.”

The Commerce Department also launched a separate Section 232 investigation into drone imports in July, examining whether drone imports threaten U.S. national security. That investigation, which could lead to tariffs rather than outright bans, is apparently still ongoing. The commercial truck proposal mentioned in the Reuters report has not gone to the White House for review.

DroneXL’s Take

This is what happens when domestic policy collides with international diplomacy. The China hawks in Congress, led by Elise Stefanik and John Moolenaar, have been pushing for maximum pressure on DJI for years. They got their FCC ban through Section 1709 of the NDAA. But the Commerce Department restrictions required executive branch action, and the executive branch just decided that keeping the door open for Trump’s April summit with Xi matters more than closing every loophole in the drone restrictions.

For drone pilots, this creates a strange middle ground. You can’t buy the DJI Mavic 5 when it launches. But the Commerce Department isn’t going to come after the supply chain that keeps shell companies operating. DoD and DHS now have the discretion to exempt specific foreign drones or classes of drones from the FCC restrictions. Whether they’ll actually use that authority to help American drone operators remains to be seen.

My prediction: The Commerce restrictions are dead for as long as Trump is pursuing his China diplomacy. The April summit is the near-term milestone. If that meeting goes poorly, expect the Commerce Department restrictions to resurface. If it goes well, expect more freezes on anti-China actions. The drone industry has become a bargaining chip in a much larger game.

What do you think? Does pulling back on Commerce restrictions while maintaining the FCC ban make sense as policy, or is this just diplomatic theater? Share your thoughts in the comments below.

Editorial Note: This article was researched and drafted with the assistance of AI to ensure technical accuracy and archive retrieval. All insights, industry analysis, and perspectives were provided exclusively by Haye Kesteloo and our other DroneXL authors, editors, and Youtube partners to ensure the “Human-First” perspective our readers expect.