WASHINGTON, Sept 23 (Reuters) – The U.S. Commerce Department announced a proposal on Monday to prohibit critical Chinese software and hardware in connected vehicles operating on American roads, a move that would effectively prevent the import and sale of Chinese-made cars and trucks in the United States.
The planned regulation, first reported by Reuters, would also compel U.S. and other major automakers to remove essential Chinese software and hardware from their vehicles sold domestically in the coming years.
The Biden administration has voiced concerns about the data collection practices of connected Chinese vehicles, particularly regarding U.S. drivers and infrastructure. There are also concerns about the potential for foreign manipulation of vehicles connected to the internet and navigation systems. The White House initiated an investigation in February.
The proposed prohibitions would extend to vehicle software and hardware produced by Russia and could be expanded to other U.S. adversaries, as well as prevent testing of self-driving cars on U.S. roads by Chinese automakers.
Software prohibitions would be enforced beginning with the 2027 model year, while the hardware ban would take effect in the 2030 model year or January 2029.
The Commerce Department is opening a 30-day public comment period on the proposal, with the aim to finalize the rules by January 20. The rules would apply to on-road vehicles but exclude agricultural or mining vehicles not used on public roads, along with drones and trains.
This represents a significant escalation in U.S. restrictions on Chinese vehicles, software, and related components. Earlier this month, the Biden administration implemented steep tariff increases on Chinese imports, including a 100% duty on electric vehicles and hikes on EV batteries and key minerals.
“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,” stated Commerce Secretary Gina Raimondo. “In an extreme situation, a foreign adversary could shut down or take control of all their vehicles operating in the United States all at the same time causing crashes, blocking roads.”
According to Raimondo, there are comparatively few Chinese-made cars or light-duty trucks currently imported into the U.S. The department is acting “before suppliers, automakers and car components linked to China or Russia become commonplace and widespread … We’re not going to wait until our roads are filled with cars and the risk is extremely significant.”
Modern cars and trucks are increasingly “connected,” featuring onboard network hardware for internet access allowing data sharing with devices both inside and outside the vehicle.
The Commerce Department indicated the rule would essentially ban all vehicles manufactured in China, but allow Chinese automakers to seek “specific authorizations” for exemptions.
“We anticipate at this point that any vehicle that is manufactured in China and sold in the U.S. would fall within the prohibitions,” said Liz Cannon, head of the Commerce Department’s information and communications technology office. She added that the regulation would force companies like General Motors and Ford Motor to cease selling vehicles imported from China in the U.S.
“With potentially millions of vehicles on the road, each with 10- to 15-year lifespans the risk of disruption and sabotage increases dramatically,” said White House National Security Adviser Jake Sullivan, citing evidence of China prepositioning malware in critical American infrastructure.
Chinese Foreign Ministry Spokesperson Lin Jian responded, stating that China urges Washington “to respect market principles and provide Chinese companies with an open, fair, transparent, and non-discriminatory business environment. China will firmly safeguard its legitimate rights and interests.”
The Alliance For Automotive Innovation, which represents major automakers including GM, Toyota, Volkswagen, and Hyundai, noted that some automakers may need more time to comply. The group stated there is “very little” connected vehicle hardware or software “that enters the U.S. from China. But this rule will require auto manufacturers in some cases to find alternate suppliers.”
Reporting by David Shepardson; Editing by Edwina Gibbs and David Gregorio
