Commentary on Political Economy

Saturday 2 March 2024

U.S. launches investigation of Chinese vehicles, citing security risks

By Jeanne Whalen

February 29, 2024 at 18:00 Taiwan Time

The Biden administration on Thursday announced an investigation into possible security risks of Chinese-manufactured autos, saying that modern vehicles are full of sensors, cameras and software that China could use for espionage or other malign purposes.

The investigation comes as Chinese automakers become more powerful on global markets, exporting a flood of high-tech vehicles and posing new challenges to Western manufacturers.

Chinese-made vehicles aren’t yet widespread on U.S. roads but are becoming more common in Europe, Asia and other markets.

[Would you buy a made-in-China electric car? They’re coming.]

Launching the probe, President Biden likened modern cars to smartphones, saying they collect and share with the cloud a host of data about drivers and their everyday commutes.

“These cars are connected to our phones, to navigation systems, to critical infrastructure, and to the companies that made them. Connected vehicles from China could collect sensitive data about our citizens and our infrastructure and send this data back to the People’s Republic of China,” Biden said in a statement. “These vehicles could be remotely accessed or disabled. … Why should connected vehicles from China be allowed to operate in our country without safeguards?”

The investigation, led by the Commerce Department, won’t place any immediate restrictions on the import or sale of Chinese-manufactured automobiles, administration officials said in a call with reporters Wednesday evening, speaking on the condition of anonymity to preview the probe. But the agency does have the authority to prohibit or restrict sales if it finds serious risks, they said.

Many of the vehicles in question are electric, but it’s not their electric motors that pose a concern — it’s their use of high-tech software, cameras and sensors that could be exploited to collect data or sabotage vehicles, the officials said.

The probe could wind up echoing the long-running U.S. campaign against the Chinese telecom giant Huawei, which the United States accused of posing security risks to communications infrastructure. The United States has banned the import or sale of Huawei’s telecom-network gear and has urged allied nations not to use it. Huawei has long accused the U.S. of using national security as an excuse to clobber a globally competitive rival.

Detroit automakers have sounded increasing alarms about the onslaught of Chinese vehicles hitting the global market. Ford chief executive Jim Farley has said Chinese automakers such as BYD pose the biggest competitive threat in the new electric vehicle market.

Recent reports that BYD and other Chinese manufacturers are scouting for factory locations in Mexico have increased concerns among U.S.-based automakers, which worry about such vehicles entering the U.S. market with few trade restrictions, under the free-trade zone created by the United States-Mexico-Canada Agreement (USMCA), the successor to NAFTA.

[Ford to build U.S. battery plant with Chinese tech as political tensions rise]

Biden’s statement announcing the investigation stressed his desire to protect American automakers. “With this and other actions, we’re going to make sure the future of the auto industry will be made here in America with American workers,” he said.

Commerce Secretary Gina Raimondo said the probe will help the agency determine whether to take action under a Trump-era executive order that gave the president new powers to protect domestic information and communications technology from national security threats.

“Imagine if there were thousands of Chinese vehicles on American roads that could be immediately disabled by somebody in Beijing. It’s scary to contemplate,” Raimondo said in a call with journalists. “We are doing [the investigation] now before Chinese-manufactured vehicles become widespread in the United States and potentially threaten our national security.”

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