(TNS) The Biden administration on Monday proposed regulations that would ban U.S. automakers from selling vehicles with key parts and software made in China and Russia.
The proposal comes following an investigation launched in February by the U.S. Department of Commerce into national security risks posed by Chinese-made internet-connected vehicle technology.
“Today’s vehicles are equipped with cameras, microphones, GPS trackers and other internet-connected technology. 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,” Commerce Secretary Gina Raimondo said in a statement.
The move comes amid growing concerns that China could become dominant in the global auto industry and as Democrats and Republicans seek to take a tougher stance against China ahead of the 2024 presidential election. The proposed restrictions are aimed at aggressively protecting U.S. national security as Chinese auto technology makes its way into more cars around the world, even non-Chinese brands.
“The good news is that right now we don’t have many Chinese or Russian cars on our roads,” she added at the press conference. “But the example of Europe is instructive. In Europe and other parts of the world, Chinese cars went from being a tiny minority to being numerous very quickly. So we’re not going to wait until our roads are full of cars and the risks are too great.”
“There is already ample evidence that (China) is proactively planting malware on our critical infrastructure with the intent to disrupt or destroy it. With potentially millions of vehicles on the roads with life spans of 10 to 15 years, the risk of disruption or destruction increases dramatically,” National Security Advisor Jake Sullivan said.
If adopted, the rules would impose software restrictions starting with the 2027 model year, while hardware restrictions would take effect for the 2030 model year and Jan. 1, 2029 for units without a model year specified.
United States Secretary of Commerce Gina Raimondo attends the House Energy and Commerce Committee | Subcommittee on Innovation, Data, and Commerce hearing “Department of Commerce Budget, FY 2025” at the Rayburn House Office Building in Washington, DC on June 26, 2024.
Rod Lamkey/CNP via Zuma Press Wire/TNS
Biden administration officials said they developed the rules, including the deadlines, after receiving extensive feedback from companies in the U.S. auto supply chain, finding that while the deadlines could be shortened because Chinese and Russian software is uncommon, it would take longer for the industry to reduce use of hardware from rival countries.
Raimondo stressed that the proposed rule, from the Commerce Department’s Bureau of Industry and Security, “is not about trade or economic interest.”
“This is strictly a national security measure. We are focused on the national security threat, the very real threat that connected cars pose to our country and the American people,” she said, perhaps echoing a different view from some industry experts.
National Economic Council Director Lael Brainard addressed some of the economic aspects of the rule ahead of its announcement: “We cannot allow our nation’s auto supply chain to be dependent on China,” she said.
Brainard touted some of the administration’s economic policies regarding China and the auto industry.
“That’s why we imposed a 100% tariff on electric vehicles from China,” she said, “and in the Stop Inflation Act, we tied a $7,500 tax credit for (electric vehicle) purchases to final sourcing in North America. President Biden and Vice President Harris will continue to stand with us to ensure autoworkers and auto manufacturers can compete and win in the future.”
Democratic Rep. Debbie Dingell of Michigan praised the rule in a statement Monday.
“As vehicles become smarter, safer and increasingly connected, it is important that steps be taken to mitigate security risks, especially when this technology comes from countries of concern like China and Russia,” she said. “Commerce Department research has concluded that technologies from these adversarial countries pose real risks to both consumers and U.S. infrastructure.”
Nazak Nikahtar, a former Commerce Department international trade official under the Trump administration, said ahead of the rule’s announcement that he expected it would be easy for U.S. automakers to comply with the rules and that they wouldn’t affect vehicle prices because most companies already have in-house compliance teams.
“At the end of the day, the situation and the auto market are not changing,” she told The Detroit News.
Nikahtar added that the United States needs more multilateral cooperation and coordinated efforts among countries to more thoroughly address the economic and security threats posed by China’s auto industry to the United States and its allies.
Sullivan suggested as much.
“Many of our allies and partners share these concerns. Just a few months ago, we convened more than a dozen countries from across the Indo-Pacific, Europe and North America in Washington to discuss these national security risks. Many of our partners told us they are considering taking their own steps to mitigate these risks,” he said.
The proposed rules will be open for public comment for 30 days, and administration officials say they hope to make a final decision before Biden leaves office in January.
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