Seven years after launching Chef Robotics in San Francisco, Rajat Bhageria faces a choice he didn’t have when he started: build robots with American components or risk losing customers and investors to political pressure. Like dozens of U.S. robotics firms, his company has relied on Chinese parts because they’re cheap and plentiful. Now, that’s becoming impossible.
The Trump administration has expanded restrictions on Chinese technology across consumer and industrial sectors, citing national security and the need to rebuild domestic manufacturing capacity. In July, the Federal Communications Commission added power inverters and advanced robotics to its restricted list. Tariffs on drones took effect last month, and a ban on new drone models began in December. Starting in January, the government will ban the raw materials China supplies for neodymium magnets. The United States has also forbidden cars using Chinese software and imposed a 100% tariff on Chinese electric vehicles.
The policy reflects a real worry: decades of outsourcing have left American manufacturers unable to meet demand, while foreign supply chains pose genuine security risks. But the human cost is becoming clear. Companies can’t find domestic alternatives. Workers and students will pay more. Consumers will wait longer. Innovation may slow as the country rebuilds what it once made.
The Cost of Decoupling
Last year, as Trump raised tariffs, Bhageria tried to move production of plastic grabbers—the components attached to his robot arms—to the United States. He abandoned the effort. Domestic manufacturing would cost prohibitively more, and U.S. suppliers told him they couldn’t do the work. “It’s actually been a much harder process than we had initially hoped,” he said.
Michael Murray, chief executive of Kopin Corporation, which makes optical components for military drones, spent more than two years moving micro display screen production from China to the United States. U.S. production costs 25% more than Chinese manufacturing. Department of Defense funding absorbed the difference, but most companies don’t have that subsidy. “We don’t have the volumes to get the costs down as much as the rest of the market, so there is a price squeeze there that we have to accommodate for,” Murray said. China produces more micro displays in one week than the United States produces in a year.
Gavin Kenneally, whose Ghost Robotics makes industrial and military robot dogs, is searching for new sources of rare earth metals, which China nearly monopolizes globally. His company moved motor production to South Korea and buys neodymium magnets from Europe, but China still supplies the raw materials. Starting in January, the government will ban that supply. “It’s an extremely difficult supply chain problem to solve in the short term,” Kenneally said.
Universities and Research Face Sharp Price Increases
The restrictions reach well beyond defense contractors and startups. Universities are scrambling. Sayan Mitra, an engineering professor at the University of Illinois Urbana-Champaign, said several of his courses use Chinese robotic arms, drones, humanoids and vehicles. Replacing Chinese humanoids with U.S.-made alternatives could cost 10 times more. Other drone options may not exist at all.
“It’s like we are trying to do surgery on a patient that is already on their feet,” Mitra said. “If it is done in a very ad hoc, unpredictable way, it’s going to slow down everything. And in fact, the solution we are aspiring towards, like creating strong robotics researchers and having a domestic supply chain, can completely get derailed because we’re going to block the process of getting robots and experimenting with them.”
Jitesh Ubrani, director of consumer devices research at IDC, a tech intelligence firm, said the restrictions affect everyday products, too. The FCC ban on mobile robots covers new versions of robot vacuums, pool cleaners and lawn mowers, nearly all made in China. “It’s extremely difficult to move manufacturing to the US,” Ubrani said. “Long-term, sure, that could happen. But that’ll probably be very expensive, and so the US consumers end up just paying a whole lot more.”
The Innovation Gap
Experts warn the restrictions could undermine American competitiveness when it matters most. Ben Armstrong, executive director of MIT’s Industrial Performance Center, said the learning curve will be expensive. “A lot of our digital lives are built on the infrastructure of foreign-made components and goods assembled abroad, and that’s not going to change anytime soon,” he said. “We just don’t know how to make them in the US. So, there will be a learning curve, and during that learning curve process, the price will be high.”
Saman Farid, founder of industry coalition Robots for America and Formic, which supplies industrial robots to U.S. factories, warned that limits on access to China’s supply chain could slow U.S. progress in advanced industries like AI and robotics. “In the time that it takes an American company to build their first prototype, a Chinese company may already be on version three,” he said. “If alternatives are not created fast enough, then it could be a real stumbling block for American businesses.”
Kenneally took a longer view. He acknowledged that governments often announce such policies in advance, giving companies time to adjust. “In the long term, I think these bans have had the stimulative effect that the government had designed them to have,” he said.
Still, the gap between intention and reality remains vast. Bhageria worries more restrictions are coming. “You can imagine what’s the next shoe to drop, right? Like, the next thing might be fixed robot arms.”
Why This Matters:
Decoupling from Chinese supply chains reflects genuine security concerns and a legitimate desire to rebuild domestic manufacturing. But the policy’s execution reveals a central tension in center-left economics: restrictions alone can’t redirect markets overnight, and transition costs fall unevenly. Researchers, students, universities and consumers face immediate price increases and scarcity. Small companies like Chef Robotics lack the resources defense contractors have to absorb higher costs. Meanwhile, Chinese manufacturers retain an advantage in speed and scale. To make decoupling work without harming the industries it’s meant to protect, policymakers would need sustained public investment in manufacturing capacity, research infrastructure and workforce development—the kind of coordinated industrial policy that requires commitment beyond announcements and tariffs.