Some American politicians have become so obsessed with suppressing and attempting to block Chinese cars that they cant compete with China at all.
According to reports by American media outlets such as CNBC and Bloomberg on May 29, the U.S. Congress is proposing a new law aimed at restricting Chinese companies participation in the U.S. automotive market. Under the current version of the law, the German Mercedes-Benz Group, which has partial Chinese capital ownership, may be prohibited from selling or producing cars in the United States.
This bill was proposed by Brett Guthrie, chairman of the U.S. House Committee on Energy and Commerce, and a Republican representative from Kentucky. The bill stipulates that any automobile manufacturer whose shares are held by entities recognized by the United States as foreign adversaries must not produce or sell automobiles in the United States for a period of five years. The term foreign adversaries includes China, Russia, and North Korea.
According to reports, the Chinese state-owned automobile company BAIC Group holds approximately 10% of Mercedes-Benz shares. The chairman of Geely Holding Group also holds nearly 10% of Mercedes-Benz shares. Together, these two Chinese groups hold a combined shareholding of nearly 20%, which exceeds the legal threshold of 15%.
Several sources told CNBC that the wording of the bill is not entirely clear, so there is room for different interpretations regarding how it will be implemented. Two of these sources believe that if the bill passes as currently written, it will effectively prevent Mercedes-Benz from continuing its operations in the U.S. market, unless the content of the law is changed, or related shares are reduced or sold.
Bloomberg noted that although the legislation provides certain exemptions for companies that already produce and sell cars in the United States, allowing them to continue operating in the country, these exemptions do not apply to companies that hold shares in state-owned enterprises.
However, this bill is still under review. There is still a long process before it can officially take effect. It is expected that the bill will be combined with a broader transportation-related bill and then submitted to the entire U.S. House of Representatives for a vote. After that, it will need to be approved by the Senate as well.
An American worker works at the Mercedes-Benz factory in Alabama. Official Mercedes-Benz website
Nevertheless, the current design of the bill has raised concerns among the public. Mercedes-Benz, as a German luxury car brand, could become an unexpected victim under the ongoing U.S. policies that impose further restrictions on Chinas automotive industry.
Daniel Kelly, press secretary for the U.S. House Committee on Energy and Commerce, confirmed the details of the bill. However, he refused to comment on whether the bill could have an impact on individual companies like Mercedes-Benz.
Another source revealed that Mercedes is currently in discussions with U.S. government officials to find a solution. A Mercedes spokesperson stated in a statement that the company has always and will continue to communicate with U.S. lawmakers in good faith, so that any future legislation can ensure that the company can continue to serve its customers, dealers, employees, and suppliers in the United States.
According to US media, this situation highlights the challenges faced by the United States in trying to exclude the Chinese automotive industry from its domestic market through legislation and regulations. In recent years, Chinese automakers have expanded rapidly in global markets and established long-term, stable partnerships with many Western large automotive companies.
Mercedes-Benz has long been one of the most popular luxury car brands in the United States. Since the 1990s, the company began manufacturing cars in Alabama, hiring thousands of employees locally. Its factory in Tuscaloosa, Alabama, has produced over 4.5 million vehicles. It now serves as an important production base for Mercedes-Benzs SUVs worldwide. Approximately two-thirds of these vehicles are exported to other countries.
Analysis suggests that even companies like Mercedes-Benz, which are deeply integrated into the American manufacturing system, could be affected. This indicates that concerns in Washington regarding the competitiveness of Chinas automotive industry and its potential impacts are growing rapidly.
American automobile manufacturers are also concerned about this situation, and hope that the government will continue to restrict the entry of Chinese cars into the market. Jim Farley, president and CEO of Ford Motor Company, recently stated that allowing Chinese cars to enter the American market on a large scale would cause devastating damage to the American manufacturing industry.
Senator Elizabeth Slaughter from Michigan, a Democrat, and Senator Bernie Morneau from Ohio, a Republican, are working together to introduce a bipartisan bill. This bill aims to ban the production, import, sale, or resale of connected vehicles, software, and hardware products that are related to China or other foreign adversaries on the grounds of so-called data security concerns.
A similar bill has also been introduced in the U.S. House of Representatives. Deborah Dingel, a Democratic representative from Michigan, and John Muellerner, the chairman of the House Committee on China Issues and a Republican representative, have proposed a bill that would prohibit American industries from establishing cooperative relationships with Chinese companies.
Even so, the United States still faces real challenges when implementing these policies.
Stephen Ezer, vice president of global innovation policy at the renowned American non-profit public policy think tank Information Technology and Innovation Foundation, believes that compared to Chinese automakers, Mercedes-Benz poses much less of a threat to U.S. national security. If even this company is subject to U.S. restrictions, I believe this could be an unexpected consequence, leading to the loss of jobs and corporate profits.
Perhaps for similar reasons, the U.S. Department of Commerce granted a exemption to Volvo Cars this week, allowing it to continue selling cars that use Chinese-connected technologies in the U.S. market. Volvos headquarters are located in Sweden, but its controlling shareholder is Geely.
Regarding the USs actions to suppress Chinese automobiles, the Chinese Ministry of Foreign Affairs previously stated that the USs attempt to politicize economic and trade issues will only hinder the development of the US automobile industry. We urge the US to respect the laws of a market economy and the principles of fair competition. It should also stop using the concept of national security in a generalized manner, stop discriminating against and suppressing Chinese enterprises, and truly maintain an open, fair, and non-discriminatory business environment.
