Due to growing national security concerns, on Monday, the U.S. Commerce Department introduced a bold regulation that seeks to prohibit the use of key Chinese software and hardware in connected vehicles on American roads, raising concerns about potential national security threats.
This move, which was first reported by Reuters, could effectively block Chinese-made cars and trucks from entering the U.S. market. It would also compel U.S. automakers, as well as foreign manufacturers, to remove key Chinese components from vehicles sold in the U.S. in the coming years.
President Joe Biden’s administration has expressed growing alarm over the data collection practices of Chinese-made connected vehicles. These concerns primarily stem from the possibility that foreign entities could manipulate U.S. drivers or the country’s infrastructure through vehicles equipped with Chinese software. To address this, the White House launched an investigation earlier this year.
The proposed restrictions, which could also extend to hardware and software developed in Russia, aim to prevent Chinese automakers from testing self-driving vehicles on U.S. roads. In a worst-case scenario, the U.S. fears that adversarial nations could control or shut down vehicles remotely, disrupting traffic and compromising public safety.
“When foreign adversaries build software to make a vehicle, that means it can be used for surveillance, can be remotely controlled, which threatens the privacy and safety of Americans on the road,” said Commerce Secretary Gina Raimondo.
The regulation is expected to take effect in two phases, with a software ban implemented as early as the 2027 model year and a hardware prohibition by 2030. However, the Commerce Department has left room for public feedback, allowing a 30-day comment period. Once finalized, the ban will apply to all on-road vehicles, excluding certain specialized vehicles like those used for agriculture or mining, as well as drones and trains.
This development marks a sharp escalation in the ongoing trade and security tensions between the U.S. and China. The Biden administration has already implemented a series of steep tariffs, including a 100% duty on Chinese electric vehicles (EVs) and higher taxes on EV batteries and key minerals. These actions align with broader efforts to safeguard critical infrastructure from foreign adversaries.
In a press briefing, White House National Security Adviser Jake Sullivan underscored the importance of the proposed regulations. “With potentially millions of vehicles on the road, each with 10- to 15-year lifespans, the risk of disruption and sabotage increases dramatically,” Sullivan noted, emphasizing the long-term risk of vehicles with foreign-made components.
While Chinese vehicles currently represent a small fraction of imports into the U.S., the proposal has prompted concerns among U.S. automakers. Companies such as General Motors and Ford could be forced to halt sales of vehicles imported from China. Liz Cannon, head of the Commerce Department’s information and communications technology office, acknowledged that manufacturers might need to shift their supply chains in response to the rule, stating, “We anticipate at this point that any vehicle manufactured in China and sold in the U.S. would fall within the prohibitions.”
The Alliance for Automotive Innovation, which represents major automakers like GM, Toyota, Volkswagen, and Hyundai, has expressed that some manufacturers may need additional time to comply. While the group acknowledges that there is limited hardware or software from China entering the U.S. market, the regulation may still force some automakers to find alternative suppliers.
In response to the proposed regulations, Chinese officials have called for fairness and non-discrimination in international business.
“China urges Washington to respect market principles and provide Chinese companies with an open, fair, transparent, and non-discriminatory business environment,” said Lin Jian, a spokesperson for China’s Foreign Ministry, adding that China would “firmly safeguard its legitimate rights and interests.”