China's foreign ministry announced earlier this month sanctions against the company, Skydio, two other defense firms and 10 individuals, following the United States approving $567 million in defense assistance for self-ruled Taiwan.
Skydio said Wednesday that the sanctions by China were "for selling drones to Taiwan, where our only customer today is the National Fire Agency."
But the company said China -- which claims Taiwan as its own territory -- was also looking to give its own firms an edge and promote its interests.
"This is a clarifying moment for the drone industry. If there was ever any doubt, this action makes clear that the Chinese government will use supply chains as a weapon to advance their interests over ours," Skydio CEO Adam Bry said in a message on the company's website.
"This is an attempt to eliminate the leading American drone company and deepen the world's dependence on Chinese drone suppliers," added Bry, among the individuals sanctioned.
Due to the sanctions, he said Skydio's drone battery supply will be reduced for several months, since they source the crucial component from China.
The company will "have to take the drastic step of rationing batteries to one per drone" as it uses looks for alternative suppliers.
"We were targeted because we are the largest drone company outside of China, and because we serve critical customers that advance our national security," he added.
Drone warfare has been a key aspect of the Russia-Ukraine conflict, with both sides using unmanned aerial vehicles (UAVs) in air strikes and for surveillance.
Skydio said in July that its drones were being used by Ukraine to document alleged war crimes in the country.
Mathieu Duchatel, a policy analyst at the Paris-based Montaigne Institute think tank, said in a post on X that China's sanctions had triggered "a supply chain crisis to bolster its industry and support Russia."
China has boosted ties with Russia since its 2022 invasion of Ukraine but says it is a neutral party and denies selling arms to Moscow.
NATO leaders said in July that China had "become a decisive enabler" of Russia's war and voiced concern over Beijing's "large-scale support for Russia's defense industrial base."
burs-sco/md
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