Next week the US Senate Commerce Committee, chaired by Republican Ted Cruz, will vote on a law to ban the import, production, sale, and resale of Chinese cars and their components – both hardware and software – in the United States.
The law, called the Connected Vehicle Security Act, enjoys bipartisan support and would come into effect between 2027 and 2030. It would also formalize the rules defined in 2025 by the then Joe Biden administration, which specifically provided for the exclusion of Chinese cars from the American market for national security reasons: Washington fears that Chinese technologies for so-called “connected vehicles” could facilitate the collection of sensitive data on American infrastructure or citizens’ movements.
THE US GOVERNMENT BLOCKS POLESTAR
In May 2024, the Biden administration imposed 100 percent tariffs on electric car imports from China: a very high rate intended to keep these vehicles away from the US market in order to protect the national automotive industry, engaged in the transition to electric mobility.
However, Chinese manufacturers, thanks to their affordable prices, have gained ground in Mexico, where they hold about a 15 percent market share: the risk for Washington is that they could use the country as a base for re-exporting to the United States, taking advantage of the North American free trade.
The current Donald Trump administration has also acted against Chinese cars, despite the president stating he was in favor of opening plants of Chinese manufacturers on American soil: last month the government banned Polestar – a Swedish brand but controlled by the Chinese group Geely – from selling its vehicles in the United States starting in 2027.
WHO LIKES THE LAW AGAINST CHINESE CARS
The Connected Vehicle Security Act is favored by the three big US car manufacturers – General Motors, Ford, and Stellantis, which owns Chrysler – but also by German Volkswagen, Japanese Toyota, and South Korean Hyundai, for example, because it eliminates Chinese competition along the entire supply chain.
The United Automobile Workers union has said that the law “provides sensible barriers to address a serious threat to our country’s automotive industry.”
IS MERCEDES-BENZ AT RISK?
The Connected Vehicle Security Act does not only apply to car manufacturers based in China, but also to companies partially owned by Chinese investors with a stake of at least 15 percent. The German Mercedes-Benz is therefore at risk, since the Chinese – between the state group Baic and the Tenaciou3 vehicle of entrepreneur Li Shufu – together own about 20 percent.
