Lutnick threatens action on Chinese state-subsidized robotics imports a day after Beijing's rare earth retaliation

Commerce Secretary Howard Lutnick told business leaders at a private roundtable on Monday that the Commerce Department is reviewing Chinese state-subsidized robotics imports and could take action once the review completes, according to a Politico report published Tuesday citing three attendees.

Lutnick said the administration wants to avoid having “state subsidized robotics attacking us in America,” warning, “this is the arms race that is coming.”

The closed-door session brought together executives from SpaceX, Boston Dynamics, JPMorgan Chase, Goldman Sachs, Siemens, and Rockwell Automation. The focus, per Politico, was how to reverse decades of offshored manufacturing and build the domestic supply chain needed for next-generation robotics production.

US tariffs already apply to some Chinese-made robots, but several attendees said that the phrasing suggested action far beyond existing tariff structures, potentially including restrictions on exports, entity list restrictions, or investment controls.

The Pentagon is putting capital behind two US robotics startups

The most concrete signal at the meeting came not from Commerce but from the Defense Department. The Pentagon’s Office of Strategic Capital is reviewing loans for at least two American robotics startups, Foundation Robotics and Standard Bots, according to two attendees. The financing has not been finalized and would be matched with private investment. The Pentagon and Commerce did not respond to requests for comment.

Evan Beard, who is the CEO and co-founder of Standard Bots, was present at the meeting and applauded the efforts of the administration. According to Beard, “The administration is putting real money on the table,” which he referred to as “the missing link to making US robotics reshoring economically possible.”

Executives flagged financing bottlenecks and permitting delays as the two operational obstacles to factory construction, alongside the foreign-subsidy distortions Lutnick has been targeting.

The Commerce Department began moving toward this point in March, when it convened a roundtable on US robotics supply-chain dynamics. On April 30, Lutnick announced a formal Section 232-style study examining the national security implications of Chinese drones and robots. The June 22 closed-door meeting now signals the review has progressed to the stage where action is being telegraphed publicly, not internally.

China’s rare earth retaliation arrived 24 hours before the closed-door meeting

On June 22, the same day as the closed-door meeting, China’s Ministry of Commerce expanded its dual-use export ban to 10 US firms, including MP Materials and USA Rare Earth, the two companies leading domestic US rare earth refining and magnet manufacturing.

As Cryptopolitan reported yesterday, the new measures amount to a full ban on Chinese dual-use exports to the 10 named entities, tightening previous rules that only required licenses. Rare-earth permanent magnets, particularly NdFeB magnets, are critical components for robotic actuators, electric motors, and data center cooling systems.

Beijing’s move directly raised the input cost for any US robotics buildout at the moment Lutnick was telling Boston Dynamics and SpaceX that the administration plans to lock out Chinese finished robots.

The tit-for-tat illustrates how the US-China tech conflict has moved decisively into the physical-AI layer. The chip wars from 2022 to 2025 set the precedent. The robotics wars of 2026 are following the same script with tighter timing. China deployed about 1.8 million industrial robots in 2023, roughly four times the US figure, and is projected to control nearly 80% of the global humanoid robot market by mid-2026.

The Chinese have 63% market share dominance in the humanoid robots industry with Inovance Technology, Tuopu Group, and Unitree being their champions. The House China Select Committee spearheaded by the Chairman John Moolenaar has enacted legislation against Chinese State-sponsored humanoid robotics champions such as Unitree, among others, earlier this June.

The US response is forming inside a broader physical-AI investment race

Lutnick’s push lands at a time when there are many other parallel efforts to boost investments in physical AI. In Japan, the country has set plans to invest 10.5 trillion yen (65.1 billion dollars) in physical AI till 2040 across 17 major areas, where the plan serves both business and demographic needs.

South Korea’s Korea Trade Commission imposed antidumping duties of 15.96% to 19.85% on Chinese robots in March. SoftBank CEO Masayoshi Son has been working with Lutnick on Project Crystal Land, a $1 trillion Arizona industrial complex aimed at building AI and robotics manufacturing capacity in the US, with TSMC, Samsung, and federal tax incentives in the mix.

The robotics stocks responded to the situation instantly. iRobot increased by over 30 percent on Wednesday. The other robotics stocks that increased were Richtech Robotics, Serve Robotics, and WeRide. According to Sherwood News, the government had gone “all in” with US robotics.

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