U.S Commerce Department’s proposed bill
The U.S. Commerce Department proposed a bill on Monday that would ban the import or sale of internet-connected cars with Chinese or Russian technology. The Biden Administration cites security as the reasoning. With internet connectivity increasingly found in technology-centered vehicles, the risk of Chinese or Russian hacking or spying in a crisis is too high.
Gina Raimondo, the Commerce Secretary, said in the announcement, “Cars today have cameras, microphones, GPS tracking, and other technologies connected to the internet. It does not 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.”
She continued, “To address these national security concerns, the Commerce Department is taking targeted, proactive steps to keep PRC and Russian-manufactured technologies off American roads.” They also fear the possibility of “external connectivity and autonomous driving capabilities in connected vehicles.”
The ban will apply to hardware or software able to process radio frequencies or be integrated into a vehicle’s automated driving systems. Referred to as a “connected car,” the ban would effectively include any modern car. It includes the software or hardware involved with Bluetooth, automated driving, Wi-Fi, and cellular devices. The ban would not apply to vehicles already on the road. It would start to go into effect for 2027 models and be fully in effect for 2030 models. There will be a 30-day public comment window. The regulation should go through in January before the end of Biden’s presidency.
Lin Jian, the spokesperson for China’s Foreign Ministry, responded to the recent regulations: “China opposes the U.S.’s broadening of the concept of national security and the discriminatory actions taken against Chinese companies and products.” He continued in the statement, “We urge the U.S. side to respect market principles and provide an open, fair, transparent, and non-discriminatory business environment for Chinese enterprises.”
Security or Economy?
The proposed move is seen as proactive, as very few American cars currently have such Chinese technology. It is also seen as another move in Biden’s economic actions against China. As CNN wrote, “The proposed regulatory action is part of a much broader struggle between the United States and China, the world’s two biggest economies, to secure the supply chains of the key computing technology of the future, from semiconductors to AI software.” The ban follows Biden’s tariff of up to 100% on Chinese electric vehicles put forth in May. The continued regulation is seen as the administration’s further push to protect the American automobile industry.
Raimondo shared that security, not economy, was the driving force behind the proposal. Lael Brainard, Biden’s national economic adviser, did emphasize the administration’s economic goals as well. He said, “The Biden-Harris administration believes the future of the auto industry is made in America by American workers, and today’s announcement ensures that Americans can drive the car of their choice safely and securely free from risks posed by Chinese technology.” Brainard also continued, “We can’t allow for a situation where our auto supply chains are dependent on China.”
The American automobile industry is struggling to move towards electric vehicles and find affordable alternatives to fossil fuel. Meanwhile, the Chinese electric automobile industry is booming. Chinese automakers able to make up to 10 million more vehicles beyond the Chinese market. They are looking to offload this surplus in other countries for much cheaper than their competitors can offer.
The Biden Administration is looking to protect the American automobile industry for future economic success. By imposing regulations and tariffs, they hope to make it difficult for Chinese companies to succeed in the American industry. Time will tell if the American automobile industry agrees with the regulations. The automobile industry is keen on protecting the economy from Chinese competition. The time to find affordable alternatives to Chinese-made hardware and software is perhaps too short. Only the future will know if the regulations and tariffs of today will have a positive impact on the American electric vehicle industry tomorrow.