The White House announced on Thursday that the US is initiating a probe into whether Chinese auto imports pose a risk to national security and may be subject to restrictions because of concerns regarding "connected" car technology.
According to the White House, the reason for the necessity of the US Commerce Department investigation is that vehicles gather a great deal of sensitive data on drivers and passengers and regularly use cameras and sensors on them to capture precise information on US infrastructure.
The investigation will also look into autonomous vehicles because they have the potential to be controlled or disabled remotely.
According to a statement from President Joe Biden, the policies of China could put their national security at risk by flooding their market with its vehicles. He will not allow it to occur on his watch.
There is no decision on a possible ban or limits on connected Chinese automobiles, according to White House officials, saying that it is too early to predict what action would be taken.
Officials said that the US government had broad legal authority and could take measures that could have a "large impact".
Biden described the action as an unprecedented one in an effort to make sure that vehicles from nations of concern, like China, do not jeopardize their national security.
The Alliance for Automotive Innovation, a trade association that represents almost all major manufacturers, including General Motors, Volkswagen, and Toyota, said that the Commerce Department ought to collaborate closely with the auto sector to evaluate the scale of any action.
The group asked Commerce to focus on transactions that bring undue threats to the national security and economy of the United States, while excluding low-risk transactions that might have unintended short-term effects on cutting-edge automobile safety technologies.
The United States imports a comparatively small number of light-duty automobiles manufactured in China. The administration is acting now, according to Commerce Secretary Gina Raimondo, to prevent these threats from spreading and endangering national security and privacy.
The main export markets for Chinese electric vehicle manufacturers have been Southeast Asia, Europe, and the Middle East. The largest electric vehicle manufacturer in the world by sales, BYD, has stated time and time again that it does not intend to sell its vehicles in the United States. However, on Wednesday, the company announced that it was searching for a place in Mexico to establish a plant that would produce vehicles for that market.
Cui Dongshu, the secretary general of the China Passenger Car Association, stated that it is unjust to single out cars from a particular nation and place limits on them alone out of all vehicles fitted with intelligent sensors.
In addition, officials are under new pressure to limit the import of Chinese electric vehicles from Mexico, and the Biden administration is thinking of slapping new tariffs on automobiles made in China.
In an effort to wean the American electric vehicle battery chain away from China, the US has enacted regulations that prohibit consumers and businesses from receiving tax benefits if they import materials from China for their supply chains.
China said in December of last year that this would break international trade regulations and jeopardize global supply chains. China rules the EV battery supply chain, and this sector is working feverishly to create a supply network that is free of Chinese influence.
A group of American lawmakers expressed concern in November over Chinese corporations gathering and using private information while conducting tests of self-driving cars in the US.
After receiving feedback for 60 days, the Commerce Department will think about drafting regulations to solve concerns. The investigation will also look for information regarding current American-assembled cars, such as where carmakers obtain software licenses.
Prior to this, the US had prohibited Chinese telecom firms from entering its market because of data security concerns. It also identified Huawei and ZTE as dangers and ordered US carriers to eliminate their products from US networks.
China, according to the White House, places severe limitations on international and American automobiles that operate in China. Biden asked then why China's connected cars should be permitted to operate in their nation without safeguards.
China has tightened its control over data management domestically in recent years, and most industries now need to ask for authorization before transferring data abroad.
Authorities in China tightened data regulations for the auto sector in May and suggested banning smart car data transfers directly to foreign countries, forcing Chinese automakers to use local cloud services instead.