The US government's ban on DJI drones – which might well become law – was initially proposed by Saturday Night Live favorite Elise Stefanik (R). If it becomes law it will require DJI products to be added to a banned list at the FCC.
(Update: this is now even closer to being law having passed the lower house today - it still needs to face the Senate).
The legal phrasing is that "telecommunications or video surveillance equipment" from DJI will be added to List of Equipment and Services Covered By Section 2 of The Secure Networks Act, but you can bet from the name of the law – Countering CCP drones – that they consider any DJI drones to be "video surveillance equipment" and that the FCC will take a broad view.
Other companies that have been added to this list are Huawei (phones), Hikvision (CCTV cameras) and they are effectively banned from the US.
New DJI products would not have any access to things that the FCC license, which includes Wi-Fi and radio, so that essentially rules out not just drones but cameras like the DJI Action 4.
Existing products wouldn't stop working overnight, but it seems unlikely that DJI would even be allowed to supply software updates, so services would immediately stop.
A worse possibility is that all existing DJI drones are considered criminal users of the FCC spectrum, with revocation of existing licences. This would be very difficult to enforce; the government didn't come around and collect people's existing Huawei phones.
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Competitors that haven't been able to keep up technologically must be rubbing their hands with glee at either prospect.
Rather than producing products of similar quality at competing prices, they will now be protected from having to try. Americans will get less choice, and face higher prices, at least at first, simply because of DJI's dominance in so many parts of the drone market, especially higher-end consumer / prosumer types which are popular in photo and video applications.
In many cases there isn't much else in the best drones list available to replace DJI which isn't also Chinese, like the Potensic Atom for budget customers. American customers will rightly worry that their politicians will simply turn on the next most successful company if it is Chinese – or just 'not American'. These worries are around online already.
Certainly, the DJI ban is very fortuitous for competitors like Skydio, but it's more unfair for most pilots as Skydio don't even sell to consumers any more.
Perhaps DJI's consumer products won't be considered "surveillance" (or at least it'll try and make a case), while – no doubt anticipating this situation – DJI have begun licensing tech to a Texas-based company, Aznu.
It isn't just drones, either. What if, as an American, you want to buy one of the best action cameras though? Would you be able to choose a DJI Osmo Action 4 – currently our pick? It's probably surveillance equipment. So, failing that, can you even consider the 8K Insta360 Ace Pro or, because the company is Chinese, are you left with only GoPro?