US takes action to ban Chinese software, hardware in all cars in America – National
The US government is proposing to ban Chinese software and hardware from connected cars on US roads due to national security concerns, the White House said on Monday.
The move marks the latest crackdown on China’s auto industry by the Biden administration and will bar all Chinese cars from entering the U.S. market. It also raises questions about whether Canada will do the same, after matching America’s lead in slapping high prices on Chinese electric cars and weighing other restrictions.
The US Commerce Department’s planned regulation, which still needs to be finalized, will also force American and other major automakers in the coming years to remove key Chinese software and hardware from US vehicles.
A fact sheet from the White House says the proposed legislation targets technology and parts imported from “countries of concern,” including Russia.
“When foreign adversaries develop software to make a car, that means it can be used for surveillance, it can be controlled remotely, which threatens the privacy and safety of Americans on the road,” US Commerce Secretary Gina Raimondo told a press conference.
“In a worst-case scenario, a foreign adversary could shut down or take control of all their vehicles operating in the United States at once — causing crashes, blocking roads.”
But China has taken center stage amid fears that Beijing wants to flood the global market with low-cost EVs with more government subsidies that speed up domestic production.
The Biden administration this summer said it would impose a 100 percent tariff on Chinese-made electric vehicles and a 35 percent duty on imports such as batteries and precious minerals and metals such as steel and aluminum. The new taxes came into effect this month.
Canada has followed suit on the high costs of Chinese EVs, steel and aluminum and is facing discussions on whether to do the same for batteries, semiconductors and other components.
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Asked by MPs on the House of Commons international trade committee on Monday how Canada should proceed with those negotiations, Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, simply said: “Compare the steps in the US.”
The Canadian Vehicle Manufacturers’ Association applauded the Chinese EV tariffs and warned that there is a “great risk” to the industry and the wider economy “if Canada is not properly aligned” with US policy, especially as the Canada-United States-Mexico Agreement is coming up. will be updated in 2026.
There are a few Chinese-made cars or light trucks imported into the US and Canada. But Raimondo said the U.S. is working “before suppliers, automakers and auto parts with ties to China or Russia become mainstream and pervasive in the U.S. auto sector.”
“We cannot wait until our roads are full of cars and the danger is too great before we take action,” he said.
US concerns over Chinese software and security are behind a series of tech crackdowns in recent months, including legislation that could force a shutdown of Chinese-owned social media platform TikTok.
The organization that represents major companies including General Motors, Toyota, Volkswagen and Hyundai, the Alliance For Automotive Innovation, has warned that changing hardware and software will take time. The team could not explain how common Chinese-made parts are in US models.
Are measures to make EVs more expensive?
The actions by the US and Canada against China’s auto industry come as the two countries seek to establish their own domestic EV production bases, with connections between the two in the North American supply chain.
The Canadian government and provinces like Ontario have jointly pledged $53 billion in tax credits, production subsidies and other investments to entice companies like Volkswagen and Honda to build new EV production facilities in Canada, according to a June report from the parliamentary budget official.
Those commitments have attracted more than $46 billion in investment, the report said.
But experts warned other tariffs in parts of China could strain current supply chains in the short term and drive up EV prices.
Joanna Kyriazis, director of public affairs at Clean Energy Canada, told a House of Commons committee Monday that Canada needs to prioritize affordability and affordability in its EV policy going forward.
“Now that Canada has decided to apply a 100 percent tariff on EVs made in China, the important question is what will Canadian governments and manufacturers do with this time they bought themselves?” Kyriazis said.
He said Clean Energy Canada recommends that the government consider lower prices for EVs in China, keeping in mind affordability.
The group urged the federal government to adopt an EV accessibility package with three broad policy recommendations.
“First, defund and extend the federal incentive program that helps Canadian drivers go electric. This program has become more popular than before this year, but it will end in March 2025,” said Kyriazis.
The second proposal was to ensure that new and existing condos and apartments have EV charging.
“Millennial Canadians are the most interested in going electric, but they often live or rent apartments where charging is limited,” he said.
“And finally (the federal government should) maintain a strong EV availability standard, which requires automakers to make more EV models available to Canadians and will help lower the price of EVs.”
Kyriazis said that making EVs more accessible to consumers will also provide more market certainty for all stakeholders in the supply chain, such as EV charging providers, electric utilities and mining companies, to plan and invest in the EV future.
– via files from Reuters
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