The U.S. Senate Commerce Committee approved legislation Wednesday that would ban Chinese-linked vehicles from the American market — and could also bar Mercedes-Benz from selling cars in the United States.
The Connected Vehicle Security Act sets a 15% foreign-ownership threshold that could ensnare Mercedes-Benz, which has nearly 20% Chinese investment
KIRILL KUDRYAVTSEV / Getty Images
The U.S. Senate Commerce Committee approved legislation Wednesday that would ban Chinese-linked vehicles from the American market — and could also bar Mercedes-Benz from selling cars in the United States.
The bipartisan Connected Vehicle Security Act would bar Chinese-linked vehicles equipped with wireless technology from being imported or sold in the United States starting in January 2027. The bill covers vehicles linked to Russia, Iran, and North Korea as well, according to Reuters.
The measure's provision barring companies with more than 15% Chinese ownership creates a complication for Mercedes-Benz. Senate Commerce Committee Chair Ted Cruz cautioned that the 15% ownership provision, if left unchanged, would effectively shut Mercedes-Benz out of the American market given that Chinese investors hold close to 20% of the company, according to Reuters. Sen. Bernie Moreno noted that Mercedes-Benz would be given until 2030 to come into compliance and that the company could apply for waivers during that period.
Chinese government-owned BAIC holds a 9.98% stake in Mercedes-Benz — its single largest individual shareholder — while Chinese billionaire and Geely founder Li Shufu controls an additional 9.69% through an investment vehicle, bringing combined Chinese ownership to roughly 19.67%, as reported earlier. Mercedes-Benz employs more than 11,000 people across U.S. facilities, including a large assembly plant in Tuscaloosa, Alabama, that has produced more than 4.5 million vehicles since opening in 1997.
The legislation, introduced by Sen. Moreno and Michigan Democratic Sen. Elissa Slotkin, is designed to give permanent legal standing to rules finalized under President Joe Biden in early 2025 that blocked Chinese automakers from the U.S. passenger vehicle market on national security grounds. The bill would make any future policy reversal harder to accomplish and would also empower the Commerce Department to identify and block high-risk vehicle technologies. A companion bill has been introduced in the House.
The bill has drawn support from General Motors $GM, the United Auto Workers, and the CAR Coalition. UAW President Shawn Fain said the legislation "puts common sense guardrails on a major threat to our nation's auto industry," in a statement.
The vote comes as the U.S. government has already moved to restrict Chinese-affiliated automakers. Polestar, majority-owned by China's Geely Holding, was forced to stop selling new vehicles in the U.S. after the Commerce Department denied its authorization request under the existing Connected Vehicle Rule. Volvo Cars, a Geely sister brand, was granted authorization roughly a month before Polestar's request was denied.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.