US automakers are pushing Congress to pass a law that permanently bans Chinese cars

It’s evident that the United States has a disdain for anything that has to do with the Chinese. There’s a whole laundry list about this, but we’ve already seen their government take action several times over the past few years, including increasing tariffs on China, a crackdown on China-sourced tech and apps, and more recently, a ban on selling Chinese cars within the US.

Now, a group called the Alliance for Automotive Innovation, which represents General Motors, Ford, Toyota, Volkswagen, Hyundai, Honda, Stellantis, and other major brands, is pushing their government to pass the law that will permanently ban Chinese vehicles from the United States, hopefully before the end of the year, according to a report from Reuters.

This isn’t something new, as the government has been proposing different ways to tighten down on Chinese automakers. A few months ago, we saw the Connected Vehicles Rule affect Polestar, which is now restricted from selling vehicles in the US, as it’s partly owned by Geely and utilizes connected vehicle technology from China.

According to the Alliance for Automotive Innovation CEO John Bozzella, he told Reuters that passing this bill would “send a clear and bipartisan message that China’s strategy to dominate global automotive manufacturing will be met with a national security response from the American government.”

Should the law be passed, it would effectively ban Chinese automakers from either selling or producing vehicles and light-duty vehicles for the United States market. However, there are some hitches to this, as some provisions in the bill would end up affecting other brands with more than 15% ownership by Chinese entities, which would end up banning the likes of Mercedes-Benz, Volvo, Lotus, and Aston Martin, meaning the bill needs some changes before it can become a law.

Of course, China isn’t taking it lightly. In fact, they’ve removed market access restrictions on foreign investment in manufacturing for international automakers, which explains how brands like Tesla, Buick, Toyota, and Ford also have manufacturing hubs and essentially have a foothold in the Chinese market.

Apart from the security and privacy concerns due to the advanced connected technology being used, it’s a way for the government to protect its automotive market, similar to how the US implemented the Voluntary Export Restraints back in 1981, which capped Japanese car imports at around 1.6-million for three years, and the Chicken Tax, which imposed a 25% import tariff on foreign-built light trucks from Japan.

While it seems a bit extreme compared to those previous effects, there’s no denying just how strongly China’s automotive efforts have been felt around the world. From being a “last resort” to now being the first choice for many, brands like BYD are quickly rising in the ranks, displacing legacy automakers. In fact, legacy automakers are also turning to China to help develop and produce their vehicles, and as mentioned earlier, there are already a handful making vehicles within China for export, like Tesla.

Apart from increasing geopolitical tensions, would this move help the US automotive market, or hinder it and the rate of innovation in general? And should other countries follow suit with a law like this as well?

^{Photos by Julian Panlilio, Sam Surla, and Polestar}