US says to investigate national security data risks from Chinese vehicles

By Thomson Reuters Feb 29, 2024 | 4:09 AM

By David Shepardson

WASHINGTON (Reuters) – The White House said on Thursday the United States is opening an investigation into whether Chinese vehicle imports pose national security risks and could impose restrictions due to concerns about “connected” car technology.

The U.S. Commerce Department probe is because Chinese assembled smart vehicles could collect sensitive data about U.S. citizens and infrastructure and send the data to China, the White House said.

“China’s policies could flood our market with its vehicles, posing risks to our national security,” President Joe Biden said in a statement. “I’m not going to let that happen on my watch.”

White House officials told reporters it was too early to say what action might be taken and said no decision about any potential ban or restrictions on connected Chinese vehicles had been decided.

Officials said on a call with reporters the U.S. government has wide authority under the law and an administration action could “potentially have a large impact.”

Biden called the effort an “unprecedented action to ensure that cars on U.S. roads from countries of concern like China do not undermine our national security” and directed the Commerce Department “to take action to respond to the risks.”

There are relatively few Chinese-made light duty vehicles being imported into the United States. Commerce Secretary Gina Raimondo said the administration was taking action “before Chinese manufactured vehicles become widespread in the United States and potentially threaten our privacy and national security.”

Chinese EV makers have been counting on Southeast Asia, the Middle East and Europe as their largest exporting markets. BYD, the world’s largest EV maker by sales, has repeatedly said it has no plan to sell its cars in the U.S. market.

Separately, the Biden administration is considering imposing new tariffs on Chinese-made vehicles and officials face new pressure to restrict Chinese electric vehicle imports from Mexico.

The White House said threats could arise because vehicles “collect large amounts of sensitive data on their drivers and passengers (and) regularly use their cameras and sensors to record detailed information on U.S. infrastructure.”

The White House also said vehicles could “be piloted or disabled remotely” and added the investigation will also look at autonomous vehicles.

The Chinese Embassy in Washington has repeatedly criticized Biden administration proposals to impose new restrictions on Chinese trade, urging the agency to “stop hyping up the ‘China threat’ theory and its unwarranted suppression of Chinese companies.”

In November, a bipartisan group of U.S. lawmakers raised alarms about Chinese companies collecting and handling sensitive data while testing autonomous vehicles in the United States.

The Commerce Department will seek comments for 60 days on the potential risks of Chinese connected vehicles and then consider drafting regulations to address concerns.

The notice being released Thursday also seeks details about current U.S. assembled vehicles including where automakers license software.

“We need to understand the extent of the technology in these cars that can capture wide swaths of data or remotely disable or manipulate connected vehicles,” Raimondo said.

The United States previously barred Chinese telecom companies from its market citing concerns about data and designated Huawei and ZTE as threats, requiring U.S. carriers to remove their equipment from U.S. networks.

The White House said China poses significant restrictions on U.S. autos and other foreign autos operating in China. “Why should connected vehicles from China be allowed to operate in our country without safeguards?” Biden said.

China has in recent years strengthened its oversight over data management within the country and requires most industries to store data generated locally and apply for permission before it can be transferred abroad.

In May, authorities tightened data rules for the auto industry and proposed to ban smart vehicles in China from transferring data directly abroad, pushing them instead to use domestic cloud services.

(Reporting by David Shepardson; Editing by Lincoln Feast.)