US launches probe into Chinese auto imports

President Joe Biden has ordered an investigation that could lead to new limits on vehicles made in China, citing concerns about national security and the potential for low-cost imports to dominate the auto market.

The investigation, led by the US Commerce Department, will look into alleged national security concerns from the technology in imported Chinese cars and trucks. The technology in those vehicles could collect sensitive data on drivers and domestic infrastructure, Biden said, in addition to giving Beijing the ability to remotely access or disable vehicles.

Biden also cited the economic importance of the auto sector to the US, along with Chinese restrictions on importing foreign vehicles, as the basis for the investigation. Biden has heavily promoted the auto sector's transition toward electric vehicles through federal funds for charging infrastructure, expansive tax credits and tougher tailpipe standards.

"China's policies could flood our market with its vehicles, posing risks to our national security," Biden said. "I'm not going to let that happen on my watch."

US automakers have warned that low-cost auto imports from China — Chinese automaker BYD this month said it was releasing an electric vehicle priced at $14,000 — could undermine their investments in electric vehicles. The Inflation Reduction Act offers billions of dollars in federal tax credits for investments in auto manufacturing, along with a tax credit of up to $7,500 per electric vehicle that is made in the US.

Low-cost Chinese auto imports could be an "extinction-level event for the US auto sector," the industry group the Alliance for American Manufacturing said in a report last week. The group called for added tariffs on vehicles made in China, which it says are being manufactured at low prices through "heavy state support." The US already places a 25pc tariff on imports of vehicles manufactured in China, in addition to a 2.5pc tariff on all auto imports.

The Commerce Department said it would issue an advance notice of proposed rulemaking that would look at national security risks of "connected" technology in vehicles. It does not take a "lot of imagination" to understand how governments with access to connected cars and trucks could pose national security or privacy risks, US commerce secretary Gina Raimondo said.

China's embassy did not immediately respond to a request for comment. China's commerce ministry has vowed to support its electric vehicle sector and recently issued guidelines intended to promote trade of those vehicles.

By Chris Knight