Yahoo Autos White House Proposes National Security Ban on Chinese Auto Parts
In a move that could have widespread repercussions for automakers based in those countries, the federal government is proposing to ban certain car parts made by Chinese and Russian companies starting in 2027, according to a proposal outlined by the U.S. Commerce Department on Monday, September 23.
The federal proposal focuses on connectivity hardware and software such as Bluetooth systems, satellite modules, and advanced driver assistance systems, according to Reuters. The proposal may also ban the import and sale of vehicles from China with key communications or automated driving system software or hardware.
Biden administration national security adviser Jake Sullivan said that the ban is focused on increasing national security and will benefit car owners by adding a layer of personal security. Given the kind of geolocation and video data collected by modern cars, software from China and Russia can't be trusted, Sullivan said.
"We've already seen ample evidence of [China] pre-positioning malware on a critical infrastructure for the purpose of disruption and sabotage," Sullivan said during a call with the media. "And with potentially millions of vehicles on the road, each with 10- to 15-year life spans, the risk of disruption and sabotage increases dramatically."
The move comes after the Biden administration launched an investigation last February into whether Chinese vehicle imports pose national security risks over connected-car technology. Commerce secretary Gina Raimondo explained in the call that the proposed ban is meant to be proactive, seeing as only around 104,000 Chinese-made cars were sold in the U.S. last year. That said, the number of China-born cars increased by 45 percent between 2022 and 2023.
"We'll secure our cars and we'll secure the American people, including our children, from potential surveillance, remote access and control, and protecting Americans from bad actors and trying to give every American peace of mind," Raimondo said. "You can imagine the most catastrophic outcome theoretically if you had a couple million cars on the road and the software were disabled."
If enacted, the software ban would go into effect for the 2027 model, while the hardware ban would come into play by the 2030 model year. The ban will apply to all vehicles on U.S. roads but not agriculture or mining vehicles, according to reporting by Reuters.
However, not all automakers are pleased with the potential ban, according to a trade group representing General Motors, Toyota, Volkswagen, and Hyundai. Given the extensive timelines associated with pre-production engineering and validation, swapping out parts suppliers and software systems won't necessarily be simple, according to Reuters. The parts ban could even effectively prevent any vehicles made in China from being sold in the U.S. once it comes into effect, as well as have potentially large repercussions for automakers that license Chinese-made software or buy Chinese parts for vehicles made elsewhere
The federal government insists this ban is strictly about keeping the American public safe, not protectionism for the Big Three."This is not about trade or economic advantage," Raimondo said to NPR. "This is a strictly national security action."
However, Biden levied a 100% tariff on Chinese EVs back in May, leading to price surges like the one seen with the Lotus Eletre. Additionally, White House economic adviser Lael Brainard has stated on the record that no matter what kind of propulsion style American car buyers choose, they should be aiming to buy an American-made one, especially with regard to electric vehicles, where Chinese automakers are attempting to take an early global lead.
"China is flooding global markets with a wave of auto exports on the back of their own overcapacity. We saw a similar playbook in the China shock of the early 2000s that harmed our manufacturing communities, and this administration is determined we will not see a second China shock," Brainard reportedly told the Detroit Economic Club. "That means putting safeguards in place now before a flood of unfairly, underpriced autos undercuts the ability of the U.S. auto sector to compete fairly on a global stage.
The proposed ban will be up for public comment for 30 days before a final decision is made.
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