US ban on Chinese vehicles unexpectedly hits Mercedes
US Senate session (Photo: Getty Images)
The US Senate Commerce Committee has approved a bill that would effectively close the American market to Chinese automakers. The new rules could unexpectedly push even the prestigious German brand Mercedes-Benz off the country's roads, according to Reuters.
The new document establishes a strict ownership threshold: companies in which more than 15 percent of shares are owned by China will be banned from operating in the US. Mercedes-Benz has about 20 percent in passive Chinese investments.
Senator Ted Cruz has already warned of the danger to the German giant, and Senator Bernie Moreno noted that Mercedes will have until 2030. The company will be able to change its ownership structure or obtain a special exemption from the requirements.
Competition and "support for domestic manufacturers"
In the Senate, lobbying is openly discussed. General Motors is actively supporting these restrictions, wanting to push out Mercedes and make its Cadillac brand more successful.
However, politicians are promising a compromise: Cruz stated that a complete ban on Mercedes will never be seriously considered. But the bill contains another controversial provision: automakers would be required to purchase expensive batteries from GM. This could add $5,000 to the price of each car. This money, of course, will be paid by buyers, not by the companies.
Fate of Polestar and Volvo
The Trump administration is already putting pressure on the electric vehicle manufacturer Polestar. The company is owned by the Chinese holding company Geely. Its sales in the US could cease as early as the 2027 model year.
The Volvo Cars brand is in a better position. The company has received permission to operate but must confirm compliance with the new rules for its entire lineup.
Not just competition, but also national security
US senators see a threat in high technologies from China. Modern cars collect too much data, and now the following will come under strict control:
- Bluetooth and Wi-Fi systems;
- Cellular communication modules;
- Satellite navigation technologies.
Washington fears that China could use this data for surveillance of Americans. That is why the restrictions apply not only to hardware but also to software.
Returning "home"
The law is already producing its first results – American corporations have begun moving production capacity from China back to the US:
- GM will return production of the Buick Envision model by 2028.
- Ford has agreed to produce Chinese-made Lincoln models on US territory.
- The Google Waymo division has abandoned Geely platforms in favor of manufacturers from Detroit.
