After officially raising tariffs on Chinese imports of electric vehicles earlier this month, the U.S. government is taking a more sedate approach to keeping Chinese-made cars out of the country. On Monday, the U.S. Commerce Department proposed recent rules that would ban the import of some Chinese and Russian automotive hardware and software from the U.S., with software restrictions set to go into effect as early as 2026.
The Biden administration says the move is necessary for national security reasons, given the central role technology plays in today’s increasingly advanced cars. In announcing the proposed ban, Commerce Secretary Gina Raimondo replaced cameras, microphones and GPS devices connected to the internet in vehicles“It doesn’t take much imagination to see how a foreign adversary with access to this information could pose a significant threat to both our national security and the privacy of U.S. citizens,” she said.
The U.S. government’s move comes as China has dramatically increased the number of affordable vehicles, especially electric vehicles, that it produces and sells abroad. Chinese car exports have increased by over 30 percent only in the first half of this year, raising alarm in Europe and the U.S., where officials fear economical Chinese vehicles could overwhelm domestic industries. The U.S. and Europe have taken steps to make it harder and more costly for China to sell cars in those regions, but Chinese automakers have responded by setting up production bases in Eastern Europe, Africaand Mexico — all of which could one day become gateways to bring more Chinese-designed and -built vehicles to recent Western markets.
Still, the proposed rules focus on safety, not competition. Raimondo has previously raised the specter of foreign actors using hijacked connected-car technology to create chaos on U.S. public roads. “Imagine if there were thousands or hundreds of thousands of Chinese connected vehicles on American roads that could be turned off instantly and simultaneously by someone in Beijing,” she said in February.
That’s not entirely realistic, given how few Chinese and Russian companies currently supply automotive software or hardware in the U.S. The proposed software and hardware ban is more of a precaution than a response to any immediate security threat, says Steve Man, global head of automotive research at Bloomberg Intelligence, a research and advisory firm. “PRC and Russian automakers currently don’t play a significant role in the U.S. auto market, and U.S. drivers are currently safe,” a senior Biden administration official told WIRED.
Because the rule would apply to any connected vehicle, not just electric vehicles, it would create even stronger prohibitions on Chinese auto technology. “If 100 percent tariffs on Chinese-made EVs were a brick wall, the proposed ban on connected vehicles would be a death sentence for China EV Inc. that wants to enter the U.S. market,” says Lei Xing, former editor-in-chief of China Auto Review and an independent analyst. He says the prospects of seeing Chinese EVs on sale in the U.S. in the coming decade are “near zero” under the rule.