UMAC, RCAT, ONDS, AVAV, KTOS Stocks Rise Overnight: Trump Takes Aim At Foreign Drones With New Tariffs

• Trump signed a proclamation imposing new tariffs on imported drones and components, citing national security concerns. 
• The tariffs vary by drone size, capabilities and origin, with duties reaching 100% for certain advanced drones. 
• The policy allows the Commerce Secretary to incentivize U.S. drone manufacturing.

Unusual Machines (UMAC), Red Cat (RCAT), Ondas (ONDS), AeroVironment (AVAV) and Kratos Defense (KTOS) stocks rose overnight as investors weighed President Donald Trump’s new drone tariffs targeting imported aircraft and components. The policy imposes duties as high as 100% while promoting U.S. manufacturing and strengthening supply chains for critical unmanned technology. 

The stocks rose between 1% and over 7% overnight on Thursday.

New Drone Tariffs Target Sensitive Technology

President Donald Trump signed a proclamation on Thursday, imposing new tariffs on imported drones and unmanned aircraft components, arguing that greater reliance on domestic production is necessary to protect U.S. national security and strengthen the industrial base.

“UAS [unmanned aerial systems]are a key technology in modern armed conflict and are critical for present and future U.S. military operations.”

The policy follows a Commerce Department investigation under the Trade Expansion Act. The review concluded that foreign-made drones and parts have gained substantial ground in the U.S. market, while domestic manufacturers lack sufficient capacity to meet military, government, and commercial demand.

Tariff Structure Varies By Risk

The new rules set different tariffs based on a drone’s size, features and country of origin. Some larger drones weighing more than 25 kilograms, along with thermal-imaging drones, docking stations and certain key parts, will face a 100% tariff. 

A second tier imposes a 25% duty on smaller drones that lack certain capabilities considered particularly sensitive, as well as on additional drone components. Products manufactured in the European Union, Japan, Liechtenstein, South Korea, Switzerland and Taiwan can face a 15% rate, while qualifying U.K. products will receive a 10% rate if all of their hardware, software and technology comes from the U.S. or those designated countries.

Manufacturing Incentives Added

The proclamation also authorizes the Commerce Secretary to establish an onshoring initiative to encourage companies to invest in new U.S. facilities for drone and component production. Most tariffs take effect 21 days after the proclamation, while duties on less-sensitive components generally receive a 180-day delay.

Unusual Machines makes NDAA-compliant drone components such as motors, flight controllers, cameras, and video gear, while Red Cat develops tactical military drones through Teal Drones and FlightWave, as well as autonomous maritime systems through Blue Ops. 

Ondas has evolved into a broad autonomous-systems company spanning drones, counter-UAS, ground robotics, secure communications and stratospheric platforms for defense and critical infrastructure. AeroVironment produces tactical drones, Switchblade loitering munitions and counter-drone systems. 

So far this year, UMAC and RCAT stocks have surged 113% and 29%, respectively, while ONDS, AVAV and KTOS stocks declined between 8% and 21%.  

Also See: Nike, FedEx Reap Billions From Tariff Refunds: Who Actually Gets To Keep Them?

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