Alliance for American Manufacturing
09/23/2024 | News release | Distributed by Public on 09/23/2024 15:08
Commerce Department Proposes Ban on Import or Sale of Connected Vehicle Technology from China, Russia
The Geely Galaxy L7, made by Chinese automaker Geely Auto. Photo via Wikipedia
It's a step forward in addressing the national security threat posed by autos from China, but there's a lot of work left to do.
The Commerce Department on Monday unveiled a proposed ban on the "sale or import of connected vehicles that incorporate certain technology and the import of particular components themselves from countries of concern, specifically the People's Republic of China (PRC) and Russia."
The Biden administration cited national security as the chief reason for the proposed prohibition, with the White House noting that "vehicles' increasing connectivity creates opportunities to collect and exploit sensitive information." Both hardware and software in connected vehicles could allow for the capture of critical data and "present opportunities for malicious actors to disrupt the operations of infrastructure or the vehicles themselves."
"Commerce has determined that certain technologies used in connected vehicles from the PRC and Russia present particularly acute threats. These countries of concern could use critical technologies within our supply chains for surveillance and sabotage to undermine national security," the White House wrote.
Under the proposal, certain connected vehicle systems from China and Russia would not be allowed to be sold or imported to the United States. The ban would apply to vehicle connectivity systems like Bluetooth, cellular, satellite, and WiFi, along with automated driving systems. The proposed rule also would include restrictions on connected vehicles that use these hardware and software systems.
Alliance for American Manufacturing (AAM) President Scott Paul called the proposal an important piece of the puzzle in responding to the grave threat posed by vehicles made in China:
"China has and will exploit any opportunity to undermine U.S. national security, and connected vehicles present an enormous leverage point. Commerce's proposed prohibition will be a key strategy in securing our data and our automotive sector in the United States, but it's only a first step in addressing the tidal wave of Chinese autos that will swath the globe. Truly grappling with the economic and national security threats posed by Chinese vehicles requires a holistic approach."
The Commerce Department's proposal not only applies to passenger vehicles, but also covers other vehicles that operate on streets, such as buses, something we urged the agency to do when we submitted comments to the Commerce Department on this issue back in April.
There's no doubt that this type of connected technology poses a national security threat to the United States, as giving China and/or Russia direct access into our vehicles could lead to data theft or hack into systems needed to keep vehicles operational. As Commerce Secretary Gina Raimondo put it: "It doesn't take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to both our national security and the privacy of U.S. citizens."
But Chinese auto imports in general also pose an existential threat to the American economy.
AAM warned in a report in February that the introduction of Chinese vehicles to the U.S. market "could end up being an extinction-level event for the U.S. auto sector," as these cars, trucks and SUVs are priced artificially cheaply, as they are backed by heavy subsidies from the Chinese government and (allegedly) utilize practices like forced labor.
Since our report's release, China has not let up on its auto ambitions, sharply increasing exports of its vehicles around the globe even as sales of automobiles within China have significantly slowed.
The Biden administration has responded by raising tariffs on Chinese electric vehicles to 100%, blocking most Chinese-made vehicles out of the U.S. market. But there are rising fears that China will dodge U.S. trade enforcement by using Mexico as a backdoor to the U.S. marketplace.
In our February report, we outlined a number of additional policy measures to take on China's unfair trade practices, including enacting the Leveling the Playing Field Act 2.0 to address circumvention tactics; fully enforcing and tightening rules of origin for all automotive content in the United States Mexico Canada Trade Agreement (USMCA); strongly enforcing the Uyghur Forced Labor Prevention Act; and reinstating Section 421 import surge protection.