# US Government’s Action Against Chinese Automakers: National Security and Economic Issues
The US government is intensifying its initiatives to protect the domestic automotive sector and tackle national security issues by focusing on Chinese automakers. Following a sequence of actions designed to diminish the impact of Chinese electric vehicle (EV) producers, the US Commerce Department is gearing up to enforce a *de facto* prohibition on the majority of Chinese vehicles. This decision is part of a wider strategy to constrain the utilization of Chinese-related car software and hardware on American roads, citing possible threats to national security.
## The National Security Justification
The main justification for the proposed prohibition is national security. According to Commerce Secretary Gina Raimondo, the interconnected characteristics of contemporary vehicles—many of which feature sophisticated software and hardware—present a considerable risk when foreign adversaries are involved in their creation. “When foreign adversaries develop software to enable a vehicle [to be connected], it means it can be employed for surveillance, can be accessed remotely, which endangers the privacy and safety of Americans on the road,” Raimondo elaborated.
The worst-case scenario, as described by Raimondo, entails foreign entities potentially seizing control of connected vehicles en masse, leading to widespread disorder on US roads. This could involve remotely instigating crashes or obstructing critical infrastructure, a situation reminiscent of Hollywood thrillers such as *Fate of the Furious* and *Leave the World Behind*. While these representations are fictional, the underlying fears are genuine.
### Instances in China
The US is not isolated in its worries regarding connected vehicles. In 2021, China prohibited Tesla vehicles from accessing military bases and other sensitive sites due to concerns that data gathered by Tesla’s cameras could be exploited for espionage. These fears were later substantiated when it was uncovered that Tesla employees had disseminated invasive videos and images captured by customer cars through internal messaging systems. This event underscored the potential for data misuse collected by connected vehicles, intensifying the US government’s concerns.
## Domestic Automakers and Data Security
It’s important to point out that US automakers have also been scrutinized for their management of customer data. Earlier this year, General Motors (GM) was found to be selling user information from its OnStar services to data brokers, who subsequently sold the data to insurance companies. This action resulted in increased insurance premiums for some drivers. In response to the resulting backlash, GM vowed to cease such practices. However, the incident highlights the broader dilemma of data privacy and the potential for misuse, even among domestic manufacturers.
## Economic Rivalry: The Larger Context
While national security worries are at the forefront of the Commerce Department’s initiative, this action is also part of a more extensive effort to shield the US automotive sector from what many perceive as unfair competition from China. The Chinese government has been heavily subsidizing its auto manufacturers, offering billions of dollars each year to enable them to market vehicles abroad at drastically lower prices. This strategy has allowed Chinese automakers to inundate global markets with economical electric vehicles, imposing pressure on US manufacturers.
US lawmakers from both parties have voiced concerns regarding the effect of Chinese EVs on the domestic market. Some have even advocated for a total ban on Chinese electric vehicles. Moreover, the US government has encouraged Mexico to refrain from providing subsidies to Chinese automakers wishing to set up factories in the region, complicating China’s ambitions to enhance its automotive presence in North America.
White House economic advisor Lael Brainard highlighted the dangers of permitting Chinese automakers to dominate the US market, drawing comparisons to the “China shock” of the early 2000s, which had catastrophic consequences for American manufacturing communities. “China is saturating global markets with a surge of auto exports at a moment when they are grappling with overcapacity. We have witnessed this strategy before,” Brainard cautioned.
## A Gradual Prohibition with Exceptions
The proposed prohibition would not take effect immediately. Instead, it would be implemented gradually over several years, allowing automakers the chance to adapt. The restriction on Chinese-connected car software would start with vehicles from model-year 2027 (to be sold beginning in 2026), while the hardware ban would apply to vehicles from model-year 2030.
Chinese automakers would have the chance to request exemptions, but the overall effect of the prohibition would likely be considerable. Given that most modern vehicles depend on various forms of connectivity, the ban could virtually prevent Chinese automakers from marketing their vehicles in the US market.
### Consequences for Global Supply Chains
The global nature of the automotive supply chain suggests that the ban could create ripple effects beyond Chinese automakers. John Bozzella, president and CEO of the Alliance for Automotive Innovation, pointed out that while the volume of Chinese technology currently utilized in US vehicles is relatively minor, the prohibition would still compel some manufacturers to seek alternative suppliers.
“You can’t simply flip a switch and transform the world’s most intricate supply chain overnight. It requires time,” Bozzella remarked, adding that while the lead time offered by the proposed regulation
