Legislation to prohibit the sale of vehicles or connected software and hardware made by companies with significant links to China or other countries of concern was advanced by a U.S. Senate committee.
U.S. Sens. Bernie Moreno, R-Ohio, and Elissa Slotkin, D-Michigan, introduced the measure, saying the People’s Republic of China is targeting export markets and that so-called connected vehicles, which transmit data and can even allow for remote control of autonomous vehicles, pose “substantial economic and national security risks” in the United States.
But even as he allowed the bill to move forward on Wednesday, July 22, U.S. Sen. Ted Cruz, R-Texas, the chairman of the Senate Commerce, Science and Transportation Committee, said it isn’t likely to pass the full Senate without a change to a portion of the bill that limits ownership by a covered country to 15%.
That, Cruz said, would prohibit Mercedes-Benz (with just under 20% of its ownership tied to Chinese entities or individuals) from selling vehicles in the United States, even though the German-based automaker produces vehicles in South Carolina and Alabama. Cruz called for the bill to be amended in the future to let an interagency group, the Committee on Foreign Investment in the United States (CIFUS), determine whether ownership posed a risk no matter what percentage was controlled by foreign investors or countries.
He also said the 15% cutoff was “retaliation” by the UAW, which supports the legislation, for its failure to unionize two Mercedes-Benz plants in Alabama two years ago.
Cruz allowed the bill to proceed to the full Senate without a formal roll call vote on the committee.
As written, the legislation would, after Jan. 1, 2027, prohibit the import or sale of any connected vehicle made or designed in China, North Korea, Russia or Iran or by any manufacturer with more than 15% of its ownership based in those countries.
That same prohibition would apply on Jan. 1, 2027 to software for connected vehicles imported, made or sold by companies controlled by more than 25% by owners in those countries; in 2030, that prohibition would apply to hardware, which could include semiconductor chips and other onboard computer items modern cars and trucks use to communicate with each other and the manufacturer.
The law, however, allows for the Commerce Department to waive the prohibition in individual cases if it can be shown to not pose an undue risk, provided that it give Congress 60 days to determine otherwise before it does so.
Critics argue that with China becoming a leader in electric vehicle technology, prohibitions on their importation or domestic manufacture could rob American consumers of choice and provide a competitive advantage to U.S. automakers, which will stymie innovation. But Slotkin and others say the risk is too great.
“Chinese cars are surveillance packages on wheels, with the ability to collect on American citizens and transmit that data back to Beijing,” Slotkin said. “The Chinese Communist Party’s playbook of heavily subsidizing their product and underselling the competition puts Michigan’s auto industry and millions of American workers at risk.”
UAW President Shawn Fain also put out a statement in support of the legislation, as did all three Detroit-based automakers, with General Motors saying it “can compete with anyone in the world when we are given a level playing field.” Ford, meanwhile, said its leaders “look forward” to working with Congress on the bill; Stellantis said the bill “addresses important issues related to connected vehicle security and fair competition in the U.S. market.”
Contact Todd Spangler: tspangler@freepress.com. Follow him on X @tsspangler.
This article originally appeared on Detroit Free Press: Slotkin ban on Chinese cars clears Senate committee
Reporting by Todd Spangler, Detroit Free Press / Detroit Free Press
USA TODAY Network via Reuters Connect
By Todd Spangler, Detroit Free Press | USA TODAY Network
