President Joe Biden’s outgoing administration is set to finalize rules on Tuesday effectively banning most Chinese cars and trucks from the U.S. market, targeting vehicle software and hardware from China.
Move Against Chinese Vehicles
Washington’s latest move against Chinese vehicles comes after the Commerce Department said this month that it was considering a similar crackdown on Chinese-made drones, in the wake of last year’s steep tariff hikes on imports of its electric vehicles.
National Security Concerns
“It’s really important because we don’t want two million Chinese cars on the road and then realize … we have a threat,” Commerce Secretary Gina Raimondo told Reuters in an interview, citing national security concerns.
In September, her department proposed a sweeping ban on key Chinese software and hardware in connected vehicles on American roads, with software prohibitions to take effect in the 2027 model year and those on hardware in 2029.
They also bar Chinese car companies from testing self-driving cars on U.S. roads.
Rules Also Cover Russian Vehicles
The rules also cover Russian vehicles and components.
The U.S. Commerce Department said in the final rules it was making some changes, such as exempting vehicles heavier than 10,000 pounds from the requirements, which would let China’s BYD continue to assemble electric buses in California.
On Monday the department said it planned to soon propose rules barring Chinese software and hardware in larger commercial vehicles, including trucks and buses.
A final decision will be up to the incoming Trump administration.
In a shift, the department said the bans would not cover Chinese software developed before the new rules took effect, so long as it was not being maintained by a Chinese firm.
That means General Motors, and Ford, could potentially continue to import some Chinese-made vehicles for U.S. buyers, a senior official told reporters.
Extension Bid Unsuccessful
The Alliance for Automotive Innovation, representing GM, Toyota Motor, Volkswagen, Hyundai Motor, and other major automakers, unsuccessfully sought an additional year to meet the hardware requirements.
Polestar, the Swedish automaker that is a brand of China’s Geely warned in October that without changes, the Commerce rule would “effectively prohibit” it from selling vehicles in the United States.
An administration official said officials expect Polestar would need to seek specific authorization under the final rule.
Polestar declined to comment.
Steep Tariff Hikes
In September, the Biden administration finalised steep tariff hikes on Chinese electric vehicle imports.
This month, the Biden administration put key Chinese battery company CATL on a list of firms accused of aiding the country’s military.
President-elect Donald Trump, who takes office on January 20, wants to prevent Chinese auto imports but is open to Chinese automakers building vehicles in the United States.
(With inputs from Reuters)
