U.S. Commerce Department Targets Chinese-Connected Vehicles in National Security Crackdown

The U.S. Commerce Department is set to propose rules targeting connected vehicles from China and other adversarial nations. This includes imposing restrictions on key software components. The move aims to address national security concerns raised by potential risks associated with Chinese vehicle imports.

The U.S. Commerce Department plans to issue proposed rules on connected vehicles next month, focusing on limiting specific software made in China and other adversary nations, a senior official announced Tuesday. “We’re looking at a few components and some software—not the whole car—but some of the key driver components of the vehicle that manage the software and manage the data around that car that would have to be made in an allied country,” said export controls chief Alan Estevez at a forum in Colorado.

In May, Commerce Secretary Gina Raimondo indicated the department’s intention to draft rules on Chinese-connected vehicles this autumn, with the possibility of banning them or imposing severe restrictions. This follows a February investigation by the Biden administration into national security threats posed by Chinese vehicle imports. Estevez’s recent comments provide the clearest outline yet of the administration’s strategy, which has sparked significant concern.

Connected cars, with onboard internet access, can exchange data with devices both inside and outside the vehicle. Estevez emphasized the risk, stating, “A car is a very scary thing. Your car knows a lot about you. A modern car has a lot of software in it. It’s taking lots of pictures. It has a drive system. It’s connected to your phone. It knows who you call. It knows where you go. It knows a lot about you.”

The Chinese foreign ministry has called on the U.S. to respect market economy laws and fair competition principles, asserting that Chinese cars are globally popular due to their competitive edge and technological innovation. Raimondo warned of potentially “catastrophic” outcomes if the software in millions of cars were to be disabled.

Currently, Chinese-made light-duty vehicle imports in the U.S. are minimal. The Biden administration has proposed significant tariff increases on Chinese electric vehicles and other goods, expected to take effect by August 1.