The United States House of Representatives passed a ban on the future sale of DJI drones in the U.S. on Friday, making the DJI ban more likely than not. The “Countering CCP Drones Act” is part of the United States’ 2025 National Defense Authorization Act (FY25 NDAA), a major piece of yearly legislation allotting defense spending for the coming year.
Drone maker DJI is based in China and controls over 70% of the world’s drone market share, a combination that threatens U.S. lawmakers
DJI has 90% market share of the U.S. hobby market, 70% market share of the industrial market and over 80% market share of the first responder market. And their main competitor is Autel Robotics which… is also a Chinese company
(my emphasis)
As I noted years ago, what’s going to happen, er, is happening, is the world splitting into two trade blocs. Problem is the Western bloc is smaller, economically and in terms of land mass, than the one led by China and Russia, which includes a big chunk of Africa and South America, in addition, and which is growing.
Now bans and tariffs aren’t automatically bad. They can give space to domestic industry to compete. China’s “overcapacity” is the result of a lower cost structure and, in many areas, fierce competition. There are twenty-two significant drone manufacturers on this list, for example, and there are hundreds more.
To compete, the US needs to create a competitive market again, and it needs to reduce its cost structure. The simplest ways to do that would be to reduce housing and medical costs; to enforce anti-trust laws vigorously and to reduce barriers to entry for new businesses.
But part of the problem is simple: the US market is no longer as big as the one China has access to. For a long time, access to the American market was what mattered, but that’s no longer the case. The US, and the West in general, has to catch up, and they have to do so in an environment where they are the underdogs. This reality doesn’t seem to have penetrated thru to policy makers—if it had, they wouldn’t still think that sanction after sanction does significant damage to China or Russia, or almost anyone else.
But, with an oligarchy and a commitment to neoliberal “crush wages and workers and embrace austerity” ideology, the West is damaging its internal demand and markets at the same time as it needs those markets to catch up.
The USSR lost to the West for fairly simple reasons, and the main was that the West had more industrial base and more population. Now the shoe is on the other foot. It’s not likely to work out better for us than it did for the Soviets.
Bill R
I did read a report that the US is planning on attacking China with millions of independent thinking drones. I wonder with the US losing its technological lead and its ability to manufacture a vast amount of chips, would it even be able to make those drone swarms or would they be overwhelmed by those opposing the US attacks.
On a different note, is the US able to even defend most of its empire if it can no longer rely on its aircraft carriers to get close to shore – with drones and aircraft destroying rockets it seems as vulnerable to defeat at the periphery of its empire as Japan after its carriers were sunk.
Bill R
I meant to say not just aircraft destroying rockets but also aircraft carrier destroying rockets.
Jan Wiklund
I don’t think it is as simple as Ian says – reduce cost structure and raise demand. “The West” is also stuck in a rentier economy where it is more profitable to play on the casino than to organize production, and also much, much easier for a generation of capitalists that has forgotten what production is like.
Perhas they will change in the face of annihilation. It has happened before – but these times the rentier interregnums were much shorter than it has been now. More about this at http://www.folkrorelser.org/inenglish/serious.html
different clue
@Jan Wiklund,
Are little countries on the edge of the “West” less stuck in a rentier-occupation economy? Little countries like Finland and Iceland? Or is every “Western” country equally under Financialist Rentierian Occupation?
Certainly the Rentier Occupation Classes in America itself don’t care whether America gets annihilated or not. They are always ready to grab the money and run to greener pastures and friendlier shores. Their view is that when the party’s over in America its just getting started somewhere else.
I think it is time for “The West” to give up on the goal of “Catching Up”. It is time for ” The West” to adopt the goal of “Survival”. What would a “Survival” agenda look like? What policies would be “pro-Survival” policies? What sort of political party-movement would push for the adoption of “Survivalist” policies in pursuit of the new goal of “Survival”?
The psycho-cultural problem is wider and afflicting more Americans than just the neoliberals and their neo-liberalist cult followers. Every American who believes in “American Greatness” is afflicted with nostalgia for that “American Greatness” past.
Whether it is Trumpists saying Make America Great Again or Clintonites saying “America Is Already Great”, millions of people remain trapped in the Indispensible Nation thought-matrix.
We need a word for that. I offer the word ” toxic nostalgia”. If other people have a better word, this could be a place to suggest it.
If an overwhelming majority of Americans can decide to believe: ” f*ck Greatness. I! am an American Okayness ordinarian”, then that overwhelming majority of American Okayness Americans will be ready to think in terms of Survival.
America needs a cheaper dream.
Let the world lead the world and let America lead America.
MAOKA. That stands for Make America O K Again. That could go on a red hat.
And if the Trumpists sued, that would give MAOKA some needed publicity.
GlassHammer
Well much of the “costs” which the U.S. worker needs to out-earn is driven by private debts, mountains of them.
Those debts need to clear in order to significantly drop costs and that would be one he’ll of an economic earthquake.
Writedowns and bankruptcies is what we have been trying to avoid since the late 80s and early 90s.
Oakchair
is the US able to even defend most of its empire
—-
The US couldn’t stop the rich industrial powerhouse Venezuela from “annexing” BP controlled oil deposits in Guyana.
The US can’t even stop the technological advanced paradise of Yemen from shutting down a major trade route.
Israel can’t even militarily beat a concentration camp.
According to western sources NATO has sent more money/aid to Ukraine then Russia has spent on increased military spending.
Given that what would we expect if China entered the fray?
The USSR deserves props for not going out by waging war against everyone and everything.
bruce wilder
File under: “Be careful what you wish for”
Like a lot of things that have turned out predictably to have gone wrong, as neoliberalism has turned rancid, this is another illustration of the hazards of having an elite who do not know how or care to make the society they lead to work for the society itself
mago
Not parsing it as it’s a tired theme, although I will mention once again that western leadership suffered childhood trauma at the hands of their nannies who repeatedly dropped the little shits on their heads.
Then they received coddled conditioning through the elite institutions and cultures they inhabit.
The result being the muddled muck and mire in which the untermenschen’s heads are dunked by their addled overlords.
Tis a frightful scene.
Revelo
>>USSR lost to the West
USSR didn’t “lose”, if you are referring to the breakup. What happened is USSR politicians decided to steal government assets and simultaneously promote governers of constituent republics of USSR to Presidents of independent states each with their own military, Olympic team, seat at UN, etc. Analogous to USA breaking up and national parks being sold for $1 each to local pols, 50 states become 50 new members of the UN, each with its own military and Olympic team. Except USSR had a lot more government assets than national parks to be stolen by the politicians.
USSR did begin to fall significantly behind USA in the 1970s with regards to electronics and computers. But USSR had and Russia continues to have a strong science/engineering tradition, so they would eventually have narrowed this gap.
USA will only reform after it is humiliated in confrontation with the China/Russia/Iran/North Korea bloc. That bloc is not seeking confrontation, but each member does have grievances with USA interference in what they consider their neighborhood. China – Taiwan. Russia – Ukraine and other Former USSR states. Iran – all sorts of issues in mideast. North Korea – South Korea. USA could simply walk away from all these conflicts and remain natural world leader because it is incumbent leader, USA racial/ethnic diversity makes it a microcosm of the entire world, USA continues to be a military and economic superpower. However, USA foreign policy establishment seems hell bent on provoking war with the China bloc, war that the USA will almost certainly lose.
Ian Welsh
The rentier culture is part of the cost structure, which is why I mention creating actual competitive markets.
Jan Wiklund
Different clue: Of course the whole “western” global region is ravaged by rentierist exploitation. In my own country, Sweden, more than 50 percent of the business profit is made by the financial sector, and most of its business are about mortgages. Government contracts is also big business, i.e. getting paid for running a clinic or a school for a municipality or a county – of course it’s the regular employees that do the running, the contractors engage in cutting to increase the profit.
I don’t think getting rid of that is only about creating competitive markets, as Ian says. There can be a competitive market in government contracts, for example, where contractors frantically try to cut as much as they can to get any profit out from it. It is mainly to get the right focus in the economy. Getting away from the casino and into the workshop. Even monopolistic workshops, like GM in its heydays, are better than casinos.
Jan Wiklund
Perhaps one should think about how this focus on the “real” economy instead of the “money” economy should come about. I believe one essential part of it (there may be others) is about taxing the extremely rich out of existence. The money bubbles are mainly run by them. Ordinary people, up to say the 98th percentile, mainly consume their incomes, i.e. lay them on the workshops.
Ian Welsh
I agree. I’ve written literally dozens of articles about getting rid of the rich.
Jan Wikund
Above was about the finance sector. Let’s see how one could strangle the other rentier sectors.
Patents and copyrights should be reduced to what they were during industrial capitalism, i.e. some ten years. Perhaps patents aren’t even necessary, that was what was argued by the Swedish Association of Small Business: competition is so hard nowadays that you have to innovate to survive, you don’t need any extra encouragement.
Land rent is caused by monopolization but it is not easy to produce land. Buildable land, however, could be created if zoning and other monopolistic devices were scrapped and landowners were permitted to build whatever provided they followed general building regulations. Of course they should be taxed for the land, not for the buildings, and of course this should apply only for reasonable centrally located land – sprawl is by itself a cost-rising phenomenon.
Public contracts have usually very little excuse for their existence. They should be used exclusively when the bought items can be easily compared with other products on the market, otherwise the public bodies should produce in-house. Tiny Holland could defeat the mighty Habsburg Empire because they run their army in-house while the Habsburgs relied on contractors.
Platforms should be considered infrastructure, and infrastructure is inherently monopolistic and should be run by a public body at cost price.
Concerning natural resources I admit that I don’t have any idea. But we should rely increasingly less on natural resources and use circular economies as much as possible.
GrimJim
I need to invest in tumbrils and guillotines… The only real long term investment left to us…
Purple Library Guy
I don’t have an inherent problem with the tariffs. There’s a lot to be said for tariffs. The problem is the tariffs being in the service of a stupid cold war which the country determined to fight it is not going to win. But it’s the cold war that’s stupid, not the concept of tariffs.
The tariffs are a stupid tactic in this cold war . . . but it’s not like there are any smart tactics. The United States is not going to invent a secret sauce which will enable them to once again become hegemon. They made it in the first place because simple basic fundamentals were on their side. Now those simple basic fundamentals are on China’s side.
But you know, most of the countries in the world are not the world’s hegemon, and many of them are nicer places to live for most of the citizens than the United States . . . and quite a few more would be if the US stopped fucking with them. Given the way predatory international trade and investment work in the real world, many of those countries would be better off still if they were in a position to do a bit more in the tariff, import substitution and industrial policy line. Partly because the purpose of international investment is to siphon wealth from the country invested in, not to give it value for money. Partly because if you have a political unit (like a country), it will do better the more it can control its economy, but the more important stuff you have to import the less control you have, and the freer your industries are to go elsewhere the less control you have; you’re stuck in a race to the bottom on things like wages, safety and the environment. In short, tariffs and controls on outside investment let you have unions and environmental regulations.
This will probably not result in you having the most efficient production in the world. But big deal. We’re almost post-scarcity at this point in terms of our basic ability to produce. As long as your efficiency is good enough, you can meet the needs of your people and then some, without endless competition to be the best in the world. There are three factors that work against this, but economic independence makes at least one of them better and none of them worse–those factors are overpopulation, ecological collapse and elite kleptocracy. Local control of the economy makes it easier to rein in elite kleptocracy, and probably makes it easier to control overpopulation and environmental damage.
So tariffs are fine. It’s squabbling to try to be the world hegemon that’s insane; all tactics used to that end are going to be stupid in one way or another.
StewartM
PLG
Tariffs, as Ian says, can be a part of the solution, but given the current situation they are just used to price better overseas products for ordinary USians out of reach, further eliminating competition, leaving ordinary USians at the mercy of crap products and crap customer service and any wage hikes can be eaten up with price increases. If the Chinese and/or Japanese bought out US companies and actually ran them right, i.e., customer-focused, then that actually I would count as a good thing.
(And as the Chinese can tell you, despite foreign ownership, if the factories are inside you’re borders, they’re really still yours).
DC
Interestingly enough, the “Great” US during WWII didn’t think like us today. I have been involved with arguments online of late with those claiming Lend-Lease “saved the USSR” (it didn’t; it may have helped the USSR win, but the USSR had already won its fight to survive before Lend-Lease ever was more than a trickle).
But then I was asked “if the Soviets were doing so good without help, why did we help them?” to which I answered “self-interest”. I pointed out that George C. Marshall and the US military leadership of the time didn’t believe in American hegemony and exceptionalism to the degree our deluded leadership does today. Marshall in particular thought that if he stood by and watched while a military of 12 million men fighting his common enemy go down to defeat, then he would become the biggest military blunderer of all history. Marshall and the US military leadership saw Soviet survival and Soviet resurgence as at least highly desirable, if not essential, to their victory. They weren’t at all sure they could triumph if Nazi Germany had won in the East and could start exploiting the USSR’s resources. In short, they felt they needed the Soviets.
This, I remind you, was when the US military did become (overall) the greatest overall power in world history (some nations might do some things better, but no one did everything as well as the US). Yet they didn’t have the hubris of our leadership today.
John9
Margaret Thatcher’s dictum, there is no such thing as society, has been so internalized by the majority in neoliberal societies that any collective effort, necessary to start up any low profit manufacturing process among many things, is virtually impossible.
That will take a long time to change, if ever.
Purple Library Guy
@StewartM I don’t think the Chinese would tell you that. They had rules from the beginning about foreign ownership of Chinese companies. China kept 51%. Those rules got relaxed recently, basically I think because the Chinese companies are now big enough and strong enough that the Chinese aren’t worried about foreign companies any more, but they were there for the early period, ensuring that all those factories making stuff for Apple and whoever belonged to majority Chinese companies.
As to the futility of tariffs for the United States given its current, as it were, economic culture . . . I don’t entirely buy it. We have a tendency to look at trends and cultural tendencies and treat the results as absolute things when they are actually relative. The United States offshored A LOT of its manufacturing . . . but a lot of things are still manufactured in the United States. The United States has a MORE financialized, grift-oriented approach to commerce than most other countries . . . but there are still plenty of USian firms oriented primarily towards making products (and there are financialist grifters in most countries, including China–the Chinese government just doesn’t let them run all the banks). If there was nothing in the US left to stimulate, that Biden green production subsidy bill wouldn’t have stimulated anything–but in fact it seems to have stimulated a good deal of investment, much of it into actual things that will probably get built. So I think that even now, for many possible tariffs there are US firms that would take advantage of them and substitute local production for imports . . . and this would on average be good for the US. Even if the local production is more expensive, it involves local jobs, and it increases the capacity for local politics to have control over the production process.
The United States has devoted a lot of effort and policy to ruining itself, but as someone noted with respect to Britain, there is a lot of ruin in a country–it’s not even like turning a supertanker, it’s like turning a massive flotilla with limited signaling and command; you can send a whole lot of the flotilla towards ruin, but they turn at different times and rates and some don’t listen at all. I’ve been reading articles for decades that talked about vicious neoliberal government policies of various stripes, which tended to predict their horrible outcomes. And what I’ve noticed is that while in fact the policies were harmful and the outcomes were bad, the impact tended to be a bit slower and more muted than most of the article-writers expected, because you can set a policy but all the actual people involved are mostly trying to create good outcomes. So destitute people would find desperate shifts to salvage something, and civil servants would find some old forgotten rule or policy to give people some scrap with, and so on. In Britain right now they are reaching the limits of this kind of process, to the point where they now have sufficiently widespread childhood malnutrition that the new crop of kids average shorter. Britain at this point is staring actual ruin in the face. But it took a lot of concerted effort over a long time. The US is not quite as far along; it still has some ruin in it. I think it’s frankly unlikely they’ll manage to pull back from the brink; their oligarchs are too powerful and too stupid. Tariffs at this point might be spitting into a hurricane, and doing it for the wrong reason at that, but they probably won’t hurt.