Rajat Bhageria started his robotics company in San Francisco seven years ago with a simple business model: find the best parts for the lowest price. Now he’s scrambling to rebuild that model from scratch. Chef Robotics, like many U.S.-based firms, built its robot arms around inexpensive Chinese parts, until investors and customers began asking uncomfortable questions about national security.
The Trump administration has sharply expanded restrictions on Chinese technology imports, citing data protection and incentives for domestic manufacturing. Yet the policy is forcing companies to face an uncomfortable reality: decades of outsourcing have left American manufacturers unable to pivot quickly. Costs are rising, wait times are stretching, and companies face genuine uncertainty about keeping pace with Chinese competitors who’ve retained uninterrupted access to their own supply chains.
The Competitiveness Squeeze
Ben Armstrong, executive director of MIT’s Industrial Performance Center, put the problem bluntly: “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. 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.”
Bhageria saw this firsthand last year, when he tried to move production of his robot arm components as Trump raised tariffs on Chinese imports. His robot arms’ plastic grabbers are still made entirely in China. He looked for domestic alternatives, but the economics didn’t work. “It’s actually been a much harder process than we had initially hoped,” he said. Even specialized U.S. machine shops told him flatly: “We can’t do this.”
Restrictions keep growing. In July, the Federal Communications Commission added power inverters and advanced robotics to its restricted foreign-made technology list, including humanoid robots capable of running, jumping, dancing and fighting. The administration has also banned cars that use Chinese software and imposed a 100% tariff on Chinese electric vehicles. Drone tariffs took effect last month, after a ban on new drone models in December. A government ban on Chinese-sourced raw materials for neodymium magnets is due to start in January.
Real Costs for Real Companies
Michael Murray, chief executive of Kopin Corporation, which supplies optical components for U.S. military drones, moved micro display screen production from China to the United States. The process took more than two years. His conclusion: U.S. production costs approximately 25% more than Chinese alternatives. Department of Defense funding paid for the supply-chain move, but that subsidy won’t be available to every company facing similar decisions. “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 makes more micro displays in one week than the entire United States makes in a year. That gap reveals the scale of America’s manufacturing deficit.
Gavin Kenneally of Ghost Robotics, which makes industrial and military robot dogs, is looking for new sources of rare earth metals. China controls global supplies of these materials. His company has already shifted motor production to South Korea and sources neodymium magnets from Europe, but the raw material still comes from China and will be covered by the January ban.
“It’s an extremely difficult supply chain problem to solve in the short term,” Kenneally acknowledged. He said the government typically announces 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.”
Innovation Delays and Higher Prices
Saman Farid, founder of industry coalition Robots for America and Formic, which supplies industrial robots to U.S. factories, warned about the competitive stakes: “In the time that it takes an American company to build their first prototype, a Chinese company may already be on version three.” His customers haven’t faced restrictions yet, but he worries bans will spread faster than alternatives arrive. “If alternatives are not created fast enough, then it could be a real stumbling block for American businesses,” Farid said.
The restrictions also reach everyday consumer products. The FCC ban on mobile robots covers new versions of robot vacuums, pool cleaners, and lawn mowers, most of which are made in China. Jitesh Ubrani, director of consumer devices research at IDC, was blunt about the consequences: “It’s extremely difficult to move manufacturing to the US. 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.”
Universities and research institutions face particular pressure. Sayan Mitra, an engineering professor at the University of Illinois Urbana-Champaign, said several courses rely on Chinese robotic arms, drones, humanoids and vehicles. Replacing Chinese humanoids with American-made alternatives could cost ten times more. Some alternatives don’t 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.”
Ford Motor Company faced criticism from the Trump administration earlier this month over alleged improper links to Chinese technology, including its use of Chinese electric car batteries manufactured by CATL. Ford rejected claims that it was ceding U.S. manufacturing to Chinese entities.
Why This Matters:
Decoupling from Chinese technology is a genuine strategic choice with real economic consequences. National security concerns about sensitive consumer and government data deserve serious policy attention, and building domestic manufacturing capacity addresses legitimate sovereignty issues. But execution matters enormously. When restrictions outpace viable alternatives, they become a tax on American competitiveness and consumer wallets. Universities can’t train robotics researchers without robots to study. Small manufacturers can’t access components that don’t yet exist in U.S. supply chains. Consumers pay more for consumer products. The policy assumes domestic manufacturing capacity can grow quickly, though development may take years. During that transition, American companies and researchers operate at a disadvantage against Chinese competitors with uninterrupted supply access. Success requires not just restrictions, but simultaneous investment in alternative suppliers and manufacturing capacity. Right now, restrictions are expanding faster than alternatives are emerging.