After tariffs on Chinese electric vehicles were officially raised earlier this month, the U.S. government is getting even more serious about keeping Chinese-made cars out of the country. On Monday, the U.S. Commerce Department proposed a new rule that would ban Chinese- and Russian-made automotive hardware and software from entering the U.S., with software restrictions going into effect as early as 2026.
The Biden administration says the measure is necessary for national security reasons, given how central technology is to today's increasingly sophisticated cars. In announcing the proposed ban, Commerce Secretary Gina Raimondo cited vehicles' internet-connected cameras, microphones and GPS equipment. “It doesn't take much imagination to see how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of American citizens,” she said.
The U.S. government is taking the step as China has dramatically increased the number of affordable vehicles, especially electric ones, it makes and sells abroad. China's auto exports grew by more than 30 percent in the first half of this year, raising alarm bells in Europe and the U.S., where officials worry that cheap Chinese vehicles could overwhelm the domestic industry. The U.S. and Europe had taken steps to make it harder and more expensive for China to sell its cars in those regions, but Chinese automakers have responded by setting up production sites in Eastern Europe, Africa and Mexico. All of this could one day create a loophole that could allow more Chinese-designed and -developed vehicles into new Western markets.
Still, the proposed rule focuses more on safety than competition. Raimondo has previously raised the specter of foreign actors using hijacked connected-car technology to wreak havoc on U.S. roads. “Imagine if there were thousands or hundreds of thousands of Chinese connected vehicles on U.S. roads that could be instantly and simultaneously shut down by someone in Beijing,” she said in February.
That situation isn’t entirely realistic, given how few Chinese and Russian companies currently supply automotive software or hardware to the U.S. A proposed ban on software and hardware is more preemptive than a reaction to an immediate safety risk, said Steve Man, global head of auto research at Bloomberg Intelligence, a research and advisory firm. “PRC and Russian automakers don’t currently play a significant role in the U.S. auto market, and American drivers are safe at this point,” a senior Biden administration official told WIRED.
Because the rule would apply to all connected vehicles, not just electric ones, it would create even stricter bans on Chinese-made auto technology. “If the 100 percent tariffs on Chinese-made electric vehicles were a wall, the proposed ban on connected vehicles would be a death sentence for China EV Inc. seeking to enter the U.S.,” said Lei Xing, former editor in chief of China Auto Review and an independent analyst. Under such a rule, he said, the chances of Chinese electric vehicles going on sale in the U.S. in the next decade are “almost zero.”
