Biden Takes Major Actions Affecting Chinese EVs and Automotive Technology

Boxes labeled "Made in China" on conveyor belts.

President Biden’s recent announcement on a 100% tariff on Chinese electric vehicles and looming bans on foreign automotive software and hardware has raised widespread concerns and curiosity.

At a Glance

  • The Biden administration proposed new rules to ban the sale or import of connected vehicle software from “countries of concern,” impacting all auto imports from China.
  • The White House cited national security threats such as sabotage and surveillance as reasons for the ban.
  • The rules will cover Bluetooth, Wi-Fi, cellular, and satellite components as well as cameras, sensors, and onboard computers.
  • New tariffs on Chinese imports include a 100 percent duty on electric vehicles and hikes on batteries and key minerals.

New Regulations and Their Implications

President Biden has announced a 100% tariff on electric vehicles produced in China in a bid to diminish Chinese influence in the U.S. automotive sector. Alongside the hefty tariff, the Department of Commerce has introduced bans on Chinese and Russian software and hardware in connected vehicles to come into effect in the coming years. These measures are seen as vital to protect national security by preventing foreign adversaries from exploiting advanced car technologies.

The ban on software will begin with models released in 2027, while the hardware ban will be enforced by 2030. This development could significantly affect companies involved in autonomous driving technology, such as the Google-backed Waymo. American automakers and suppliers who rely on Chinese-made software and hardware will need to devise alternative strategies to comply with these looming restrictions.

Addressing National Security Concerns

National Security Adviser Jake Sullivan highlighted evidence of China pre-positioning malware on critical infrastructure as a primary argument for the ban. Sullivan mentioned, “We’ve already seen ample evidence of [China] pre-positioning malware on a critical infrastructure for the purpose of disruption and sabotage. 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 newly imposed tariffs and upcoming bans are part of ongoing trade restrictions on Chinese-made light-duty vehicles and component parts. Currently, China is the world’s number one auto exporter, producing budget-priced EVs like the BYD Seagull, which have already gained traction in markets globally. The impact of these new measures could be monumental, as they would also affect key minerals and batteries imported from China.

Unified Support and Expectations

Commerce Secretary Gina Raimondo described the regulations as proactive measures to ensure national security. Raimondo underscored the minimal presence of Chinese cars on U.S. roads compared to Europe: “We’ve already seen ample evidence of [China] pre-positioning malware on a critical infrastructure for the purpose of disruption and sabotage,” she said. The context is particularly significant given that in 2023 alone, 104,000 Chinese-made cars were sold in the U.S., a noticeable 45% increase from the previous year.

“This is not about trade or economic advantage,” Raimondo said. “This is a strictly national security action.”

U.S. officials and auto executives are unified in their concern that cheap Chinese EV imports pose a threat to domestic manufacturers. With the introduction of these rules, the aim is to secure cars on American roads, bolster the automotive market, and ensure the security of U.S. drivers by preventing potential surveillance and remote exploits.

Sources:

  1. Biden’s car-tech ban is a powerful new weapon against Chinese EVs
  2. U.S. proposes ban on Chinese auto parts so cars ‘can’t be used against us’

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