Pentagon Faces Court Again Over Classified Evidence Labeling Brand Drone Giant DJI a Chinese Military Firm

The U.S. Court of Appeals for the D.C. Circuit ruled in favor of Chinese drone manufacturer DJI, handing the company a partial victory in its legal battle against the Department of Defense.

The court ordered a lower district court to reconsider whether it was lawful to place DJI on the Section 1260H "Chinese military company" blacklist.

DJI is a private, Chinese-owned company founded by Frank Wang and headquartered in Shenzhen, China.

The court ruled that the lower court erred by relying solely on unclassified public records, even though the Pentagon used heavily redacted or classified internal evidence to support its claims.

The case now heads back to the U.S. District Court for the District of Columbia, where a federal judge will conduct a private inspection of the Pentagon's classified filings.

The appellate court noted that there was "no publicly stated rationale" explaining why Defense Secretary Pete Hegseth's department believes DJI directly contributes to China's defense industrial base.

While DJI won a review on the redacted evidence, the court rejected several of its other legal arguments. It dismissed DJI’s Fifth Amendment due process claims, ruling that the designation has not broadly blocked its overall global commercial trade.

The court agreed that the Pentagon presented substantial evidence that DJI is a "National Enterprise Technology Center" in China, which qualifies it for state-backed tax breaks and subsidies.

If an individual flies a DJI drone commercially or recreationally in the United States, this specific ruling does not change day-to-day operations.

No immediate flight bans or grounded fleets result from this procedural step. However, placement on the 1260H list still prevents DJI from securing direct federal government contracts and grants.

A representative for the drone manufacturer welcomed the decision, calling it validation of their ongoing business stance.

DJI called the ruling a step toward correcting an "unjustified designation" and reiterated that it is a privately held commercial company rather than a military enterprise, noting its efforts to prevent combat use of its products.

Writing for the panel, Circuit Judge Garcia criticized the Pentagon's extensive redactions, which obscured its rationale from both the company and the court, leaving both the agency's reasoning and the factual basis for the determination unknown.

Representing the company, the firm noted the unprecedented nature of the blacklisting, emphasizing that the Defense Department's entire reasoning within the administrative record regarding DJI's alleged ties was completely classified.

While Donald Trump Jr. and Eric Trump have not publicly singled out DJI by name in personal press conferences or tweets, their business ventures and public statements explicitly target the Chinese drone dominance that DJI represents.

In March, both Trump sons joined the Florida-based military drone manufacturer Powerus by securing notable equity stakes. The company specializes in defensive drone interceptors and subsequently went public on the Nasdaq through a reverse merger with a Trump-supported Florida golf course holding company.

In mid-2026, Eric took on a high-profile role as an investor and advisor for Space-Eyes, an AI-powered counter-drone defense platform. Don Jr. serves as an investor and official advisory board member for Unusual Machines, a domestic drone component and parts manufacturer.

The brothers’ investments in domestic drone companies have sparked intense scrutiny from ethics watchdogs, legal scholars, and political opponents who allege a severe conflict of interest between White House policy decisions and the Trump family's private wealth.