The U.S. government, which formally increased import tariffs on Chinese-made electric vehicles earlier this month, is getting more serious about blocking Chinese-made cars from entering the country. On Monday, the U.S. Commerce Department proposed new rules that would ban some Chinese- and Russian-made automotive hardware and software from the U.S., with software restrictions starting as early as 2026.
The Biden administration says the measure is necessary for national security reasons, given how important the technology is to today’s increasingly sophisticated vehicles. Commerce Secretary Gina Raimondo referred to internet-connected cameras, microphones and GPS devices in cars in announcing the proposed ban. “It is not difficult to imagine how foreign adversaries with access to this information could pose serious risks to both our national security and the privacy of Americans,” she said.
The U.S. government’s move comes as China is dramatically increasing the number of low-cost cars it makes and sells overseas, especially electric vehicles. China’s auto exports grew more than 30 percent in the first half of this year alone, raising alarm bells in Europe and the U.S., where officials worry that cheap Chinese-made cars will overwhelm the domestic industry. The U.S. and Europe have taken steps to make it more difficult and expensive for China to sell cars in those regions, but Chinese automakers have responded by setting up manufacturing bases in Eastern Europe, Africa and Mexico. All of this could provide loopholes for more Chinese-designed and engineered cars to enter new Western markets in the future.
Still, the proposed rules focus more on security than competition. Raimondo has previously raised fears that foreign powers could use hijacked connected-car technology to wreak havoc on U.S. roads. “Imagine what would happen if there were thousands, hundreds of thousands, of Chinese connected cars on American roads and someone in Beijing could instantly disable them all at the same time,” she said in February.
This situation is unrealistic, given that few Chinese or Russian companies currently supply automotive software or hardware in the United States. Steve Mann, global head of automotive research at research and consulting firm Bloomberg Intelligence, says the proposed software and hardware ban is more preventative than a response to imminent security risks. “Chinese and Russian automakers currently do not play a significant role in the U.S. auto market, and American drivers are safe for now,” a senior Biden administration official told WIRED.
The rules would apply to all connected cars, not just electric vehicles, further tightening the ban on Chinese-made auto technology. “If a 100% tariff on Chinese-made EVs is the wall, the proposed connected car ban would be a death sentence for China EV Inc. as it tries to get into the U.S.,” said Ray Xin, former editor-in-chief of China Auto Review and an independent analyst. Under such rules, he said, the chances of Chinese-made EVs being sold in the U.S. over the next decade are “almost zero.”
