U.S. Robotics Firms Struggle to "De-China" Supply Chains as Restructuring Costs Mount

Seven years after founding his robotics company in San Francisco, Rajat Bhageria is confronting an unprecedented challenge: building robots without relying on China. His company, Chef Robotics, sells robotic arms to food manufacturers for automating the assembly of prepared meals. Like most of its American peers, the company's core components are heavily dependent on Chinese supply chains.

According to a CNN report on October 3, China's unmatched ability to produce inexpensive components at scale has made it an indispensable link in the global technology supply chain. But as Washington continues to tighten restrictions on Chinese technology on national security grounds, a growing number of U.S. companies are being forced to rethink their supply chain strategies.

Bhageria admits that the company's procurement logic used to be simple: find the best components at the lowest price. Now, investors and customers are asking a very different question—"Why are you still using foreign-made parts?"

The Ban List Keeps Expanding

The U.S. Federal Communications Commission (FCC) in July added power inverters and new advanced robots—including humanoid robots capable of running, jumping, dancing, and even sparring—to its list of restricted foreign-made technologies. The U.S. had already banned cars using Chinese software from its roads and imposed 100% tariffs on Chinese electric vehicles. Similar tariff measures targeting drones also took effect last month after new models were banned.

The expanding scope of restrictions has made it difficult for even American manufacturing giants like Ford Motor to stay clear. Earlier this month, the legacy automaker drew criticism from the Trump administration for using EV batteries made by China's CATL, with allegations of improper ties to Chinese technology. Ford has denied claims that it is ceding American manufacturing to Chinese entities.

Bhageria's company still has some breathing room, since the components used in its robotic arms have not yet been banned. But he is not optimistic the outlook: "You can imagine what comes , right? For example, stationary robotic arms could be ."

Chef Robotics performs final assembly in the United States, but the mechanical tooling components mounted at the end of its robotic arms are currently all manufactured in China. Last year, as the U.S. raised tariffs on Chinese imports, Bhageria attempted to shift that production elsewhere—only to find that manufacturing plastic grippers domestically was prohibitively expensive, and many suppliers outside China simply lacked the capacity to take on his orders.

"The process has been far more difficult than we initially anticipated," he said. "We'd even find some really excellent machine shops in the U.S., but they'd say, 'We can't do this.'"

Ben Armstrong, executive director of the Industrial Performance Center at MIT, points out that decades of outsourcing have left American manufacturers without the capacity to meet market demand. "Our digital lives are built largely on an infrastructure of foreign-made components and overseas-assembled products, and that's not going to change anytime soon."

He added: "We simply don't know how to make these things in the United States. So there's inevitably going to be a learning process, and during that learning process, costs are going to be very high."

Kopin Corporation, which produces optical components for U.S. military drones, offers a more concrete case study. CEO Michael Murray revealed that relocating some microdisplay production from China to the U.S. took more than two years, and manufacturing these components in America costs up to 25% more. Although funding from the U.S. Department of Defense offset some of the supply chain relocation costs, Murray acknowledged: "We don't have the production scale to drive costs down as aggressively as others in the market, so we have to absorb that pricing pressure."

He offered a sobering comparison: China produces more microdisplays in a single week than the U.S. produces in an entire year.

The Rare-Earth Supply Chain Dilemma

Ghost Robotics, a maker of industrial and military robot dogs, faces an even more complex challenge. The company has already moved motor production from China to South Korea and currently sources neodymium magnets from a European company—but the raw materials for those magnets still come from China, which holds a near-monopoly on rare earths. That means starting January, Ghost Robotics' magnet procurement will be subject to U.S. government restrictions.

Ghost Robotics co-founder Gavin Kenneally called it "a supply chain problem that is extremely difficult to solve in the short term." He believes such policies typically signal their intentions in advance to give companies time to adjust, and that in the long run, the bans are indeed producing the stimulus effect the government intended.

Saman Farid, founder of the industry coalition Robots for America and industrial robotics supplier Formic, framed the potential cost of restrictions in terms of competitive pace. He noted that in the time it takes an American company to build its first prototype, a Chinese company may already be on its third iteration.

Farid worries that the scope of restrictions will continue to expand, at which point manufacturers will be forced to abandon the most competitive equipment and technologies available. "If alternatives don't emerge quickly enough, this could genuinely become a stumbling block for American businesses."

Ripple Effects in Research and Consumer Markets

The impact of supply chain disruptions extends beyond the commercial sector. Sayan Mitra, an engineering professor at the University of Illinois Urbana-Champaign, said multiple courses at the university use robotic arms, drones, humanoid robots, and vehicles from China. Replacing Chinese humanoid robots with American-made alternatives could cost up to 10 times more; for certain drones, alternatives may simply not exist.

"It's like trying to perform surgery on a patient who's already up and moving around," Mitra said. "If you do it in a very ad hoc, unpredictable way, everything slows down. In fact, the very things we want to achieve—training great robotics researchers, building a domestic supply chain—could go completely off track, because we'd be cutting off access to robots and the ability to experiment with them."

Consumer products are also affected. The FCC's ban on mobile robots covers new models of automated devices including robot vacuums, pool cleaners, and robotic lawn mowers—the vast majority of which are also manufactured in China.

Jitesh Ubrani, research director for consumer devices at market research firm IDC, pointed out that moving manufacturing to the U.S. is extremely difficult. It may be possible in the long term, but costs would likely be very high, and the end result would be American consumers paying significantly higher prices.

China's Ministry of Foreign Affairs has repeatedly emphasized that China firmly opposes the U.S. practice of overstretching the concept of national security to suppress Chinese companies. Protectionism does not enhance U.S. competitiveness; it only harms American businesses and consumers.

Analysts and executives broadly agree that while U.S. suppliers struggle to catch up, restricting access to China's vast supply chain could hinder American development in cutting-edge industries such as artificial intelligence and robotics, as well as in traditional manufacturing. Whether the pain of supply chain restructuring will translate into long-term competitiveness for American manufacturing remains an open question.

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