The US Commerce Department has proposed a significant move that could reshape the automotive landscape: banning key Chinese software and hardware in connected vehicles on American roads. This proposal, fueled by national security concerns, effectively aims to bar nearly all Chinese cars from entering the US market.
The Biden administration is worried about data collection by Chinese companies on US drivers and infrastructure through connected vehicles. This concern has prompted an investigation into potential dangers, including foreign manipulation of internet-connected and navigation systems in vehicles. The proposed prohibitions would also prevent Chinese automakers from testing self-driving cars on US roads.
Commerce Secretary Gina Raimondo highlighted the risks, stating, “When foreign adversaries build software to make a vehicle that means it can be used for surveillance, can be remotely controlled, which threatens the privacy and safety of Americans on the road.” White House National Security Adviser Jake Sullivan added that the proposal would effectively ban all existing Chinese light-duty cars and trucks from the US market, though Chinese automakers could seek specific authorizations for exemptions.
The proposed ban is set to take effect gradually: software prohibitions would begin in the 2027 model year, while the hardware ban would take effect in the 2030 model year or January 2029. The Commerce Department is accepting public comments for 30 days and aims to finalize the rules by January 20.
This proposed ban comes amidst escalating trade tensions between the US and China. Just last week, the Biden administration imposed steep tariffs on Chinese goods, including a 100% tax on electric vehicles made in China. These tariffs also target Chinese solar panels, EV batteries, steel, aluminum, and other critical minerals. This move aims to boost US manufacturing and jobs, especially in battleground states like Michigan, which is a central hub of the American auto industry.
Adding to the trade war rhetoric, former President Donald Trump has vowed to impose 200% tariffs on Chinese-made cars produced in Mexico. Trump warned that if Kamala Harris wins the 2024 election, the US auto industry could collapse within two to three years due to EV production shifting to China.
In response to these developments, China has advised its automakers to keep advanced EV technology within the country, even as they expand factories abroad to avoid heavy tariffs. This strategy includes exporting knock-down kits for assembly at foreign plants, ensuring that key components are still produced in China.
The proposed ban on Chinese vehicles is a significant development that reflects the growing US-China trade tensions. The ban’s impact on the American auto industry, consumer choices, and the broader geopolitical landscape remains to be seen.
