After officially raising tariffs on Chinese electric vehicle imports 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 some Chinese- and Russian-made hardware and software from entering the United States, with restrictions on software beginning in 2026.
The Biden administration says the move is necessary for national security reasons, given how central the technology is to today’s increasingly sophisticated cars. In announcing the proposed ban, Commerce Secretary Gina Raimondo The cameras, microphones and GPS equipment connected to the Internet of the vehicles mentioned“It doesn’t take much imagination to understand 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,” he said.
The US government’s move comes as China has dramatically increased the number of affordable vehicles, especially electric ones, it makes and sells abroad. Chinese auto exports grew by 1.2% more than 30 percent In the first half of this year, alarm bells have been ringing in Europe and the United States, where officials fear that cheaply made Chinese vehicles could overwhelm the domestic industry. The United States and Europe had taken steps to make it harder and more expensive to sell Chinese cars in those regions, but Chinese automakers have responded by setting up manufacturing bases in Eastern Europe, Africaand Mexico, all of which could one day provide a loophole to allow more Chinese-designed and manufactured vehicles into new Western markets.
The proposed rule, however, focuses on safety rather than competition. Raimondo has previously raised the specter of foreign actors using hijacked connected car technology to cause chaos on American public roads. “Imagine if there were thousands or hundreds of thousands of connected Chinese vehicles on American roads that someone in Beijing could immediately and simultaneously disable,” she said in February.
That scenario isn’t entirely realistic, given how few Chinese and Russian companies supply software or hardware for cars in the US right now. A proposed software and hardware ban is more preemptive than a response to any immediate safety risks, says Steve Man, global head of automotive research at Bloomberg Intelligence, a research and advisory firm. “Automakers from the People’s Republic of China and Russia currently do not play a significant role in the US auto market, and American drivers are currently safe,” a senior Biden administration official told WIRED.
Since the rule would apply to any connected vehicle, not just electric ones, it would create even harsher bans on Chinese-made auto technology. “If 100 percent tariffs on Chinese-made EVs were a wall, the proposed ban on connected vehicles would be a death knell for China EV, Inc. looking to enter the U.S.,” says Lei Xing, former editor-in-chief of China Auto Review and an independent analyst. With such a rule, he says, the prospects of seeing Chinese EVs on sale in the U.S. in the next decade are “almost zero.”
