President Biden on Thursday took steps to block internet-connected Chinese cars and trucks, including electric vehicles, from entering the U.S. auto market, citing the possibility that their operating systems could transmit sensitive information to the Chinese government. He said that this poses a risk to national security.
Immediate action was the launch of a Commerce Department investigation into safety threats that could lead to new regulations and restrictions on Chinese-made vehicles.
But administration officials say this is a broad-based move aimed at preventing low-cost Chinese electric vehicles manufactured in China or assembled by Chinese companies in countries such as Mexico from flooding the U.S. market. It has become clear that this is the first step toward a policy response. There is a possibility that domestic automakers will be forced out of business.
China has rapidly expanded electric vehicle production in recent years, putting it on a collision course with Mr. Biden's industrial policy efforts to help U.S. automakers dominate the electric vehicle market at home and abroad. There is. Some of the company's small cars sell for less than $11,000 each, significantly cheaper than comparable electric vehicles made in the United States.
The administration's action on Thursday comes after former President Donald J. Trump, Biden's likely opponent in November, criticized Biden for pushing automakers to transition to electric vehicles. The move comes as candidates seek to take a tougher stance on China.
The measure stems from discussions with Detroit automakers, auto workers unions and EV giant Tesla, which recently replaced Chinese company BYD as the world's largest electric vehicle seller.
“China is determined to dominate the future of the auto market, including through the use of unfair practices,” Biden said in a statement accompanying the announcement. “China's policies could flood our market with Chinese vehicles, posing a risk to our national security. We will not allow that to happen on my watch.”
Thursday's action does not immediately impose new barriers on Chinese electric vehicles, which already face high tariffs and have yet to penetrate the growing U.S. clean energy vehicle market.
At Mr. Biden's direction, the Commerce Department has launched an investigation into threats posed by technology embedded in Chinese electric vehicles. That includes Chinese versions of common car software, which government officials say can track where Americans drive, charge their cars, and even what music and podcasts they listen to on the road. It is said that even people can be tracked.
Administration officials noted that U.S. automakers selling vehicles to Chinese customers are essentially being forced by Chinese authorities to use Chinese software on their vehicles.
The announcement is the latest example of Biden's move to tighten technology regulations on China, continuing a bipartisan trend that has further sharpened trade ties between the world's largest economies. The Commerce Department investigation ordered by Mr. Biden is the first use of new powers established under an executive order issued by Mr. Trump in 2019.
Biden officials said the investigation could lead to new U.S. regulations on vehicles that rely on Chinese software.
Government officials are considering other measures to further curb imports of Chinese cars, which are already surging in European markets due to low prices, including significantly lower labor costs. This could include a 25% tariff increase on Chinese cars.
“We will continue to consider a variety of policies to ensure that our automakers and autoworkers remain the most competitive in the world,” Lael Brainard, chairman of the President's National Economic Council, said in an interview.
The Treasury Department has already proposed rules aimed at limiting China's ability to supply materials for cars and trucks that would qualify for the $7,500 electric vehicle tax credit included in Biden's signature climate bill. ing.
The investigation, announced Thursday by the Commerce Department, grew out of a series of conversations administration officials had with automakers last fall after the United Auto Workers strike, in which Biden joined the picket line on the union's side. It is. Automakers told government officials about restrictions they face selling in China, including on software.
Biden aides have begun to worry about what would happen if the U.S. did not impose similar restrictions on Chinese software, with administration officials saying only a handful of cars in the U.S. currently have the software installed. It states that
China is “flooding foreign markets with cars,” Brainard said. “Many of those vehicles can potentially be continuously connected to our infrastructure, such as the driver's smartphone or nearby vehicles. So they're collecting an enormous amount of information.”
“It's scary to think about the cyber risks and the risks of espionage,” Secretary of Commerce Gina M. Raimondo said in a briefing with reporters.
Brainard emphasized that Thursday's action was limited to software concerns. But he added, “A strong and vibrant U.S. auto industry and U.S. auto workers is also critical to America's economic security and national security.”
