[Source – businesstoday]
The ban on Chinese software and hardware in vehicles is set to take a significant step forward as the U.S. Commerce Department proposed a new regulation aimed at prohibiting these components in connected vehicles on American roads. This measure would effectively bar nearly all Chinese-made cars from entering the U.S. market and pose challenges to major automakers who rely on global supply chains.
The regulation, first reported by Reuters, is part of a broader effort by the Biden administration to protect U.S. infrastructure and citizens from potential threats posed by foreign adversaries. The proposal would require automakers in the coming years to ban on Chinese software and hardware from vehicles in the United States, a move that could have wide-reaching implications for the automotive industry.
Concerns Over Data Security and Foreign Manipulation
The Biden administration has expressed deep concerns regarding the potential for Chinese companies to collect data on U.S. drivers and infrastructure through connected vehicles. These concerns extend to the possibility of foreign manipulation of internet-connected vehicles, which could pose risks to national security. In February, the White House ordered an investigation into the potential dangers posed by connected vehicles manufactured by foreign adversaries, including China and Russia.
Commerce Secretary Gina Raimondo emphasized the seriousness of the threat during a recent briefing, stating, “When foreign adversaries build software to make a vehicle, it means it can be used for surveillance or be remotely controlled, which threatens the privacy and safety of Americans on the road.”
Raimondo further explained that in an extreme scenario, a foreign adversary could theoretically take control of all vehicles operating in the U.S. simultaneously, causing accidents and disrupting traffic nationwide. The proposed regulations would also prohibit Chinese automakers from testing self-driving vehicles on U.S. roads and extend to vehicle components made by other adversaries, including Russia.
Escalating Restrictions on Chinese Imports
This proposal marks a significant escalation in the United States’ ongoing efforts to limit Chinese influence in the automotive sector. Earlier this month, the Biden administration imposed steep tariff hikes on Chinese imports, including a 100% duty on electric vehicles (EVs) and new hikes on EV batteries and key minerals.
Although relatively few Chinese-made vehicles are currently imported into the U.S., Raimondo emphasized the need to act preemptively. “We’re not going to wait until our roads are filled with cars and the risk is extremely significant before we act,” she stated.
Most modern vehicles are considered “connected,” meaning they have network hardware that allows for internet access and data sharing with devices both inside and outside the vehicle. A senior administration official confirmed that the proposal would effectively ban all existing Chinese light-duty vehicles from the U.S. market but noted that Chinese automakers could apply for specific exemptions.
The risks are not merely theoretical. White House National Security Adviser Jake Sullivan cited ample evidence of China prepositioning malware in critical U.S. infrastructure. Sullivan warned that with millions of vehicles on U.S. roads, each with lifespans of up to 15 years, the risk of disruption and sabotage would only increase over time.
The Chinese Embassy in Washington responded by urging the U.S. to adhere to market principles and international trade rules. “China will firmly defend its lawful rights and interests,” a spokesperson said.
Further escalating restrictions on Chinese imports, the new regulation would enforce the ban on Chinese software and hardware starting with the 2027 model year for software and the 2030 model year for hardware. However, vehicles used for agricultural or mining purposes, which are not driven on public roads, would be excluded from the ban.
The Alliance for Automotive Innovation, representing major automakers like General Motors, Toyota, Volkswagen, and Hyundai, warned that adapting to the new regulations would take time. The group noted that connected vehicle hardware and software are developed globally, including in China, but it remains unclear how widespread Chinese components are in U.S. models.
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