The move comes as part of the Biden administration's broader approach to protecting the U.S. auto sector from China's unfair trade practices.
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General Motors and Ford Motor would have to stop importing vehicles from China to the United States under a proposed rule cracking down on Chinese software and hardware, a US Commerce Department official told Reuters on Monday.
The rule would also affect other automakers that sell or build vehicles in the U.S., such as Volvo Cars and BYD.
GM sells the Buick Envision and the Ford Lincoln Nautilus – both assembled in China – in the U.S. market. Ford did not comment. In the first six months of 2024, GM sold about 22,000 Envisions and Ford sold 17,500 Nautilus SUVs in the U.S.
“At this time, our anticipation is that any vehicle manufactured in China and sold in the United States would be subject to the ban,” said Liz Cannon, head of the Commerce Department's Office of Information and Communications Technology.
He said GM and Ford know that “going forward” production in China for the U.S. market “will have to be shut down and moved elsewhere.”
GM did not say whether it would have to halt sales of the Envision, but said the government “has an important role in setting clear policies” on safety issues.
The commerce ministry said this would allow companies to obtain “specific authorisation” to continue selling vehicles or components.
China's BYD North America, a unit of BYD that makes electric buses in Lancaster, California, could be affected. The company did not immediately comment.
“We have to work with them to better understand their supply chain,” Cannon said. “They have to come in for specific authorization.”
For example, if a software was developed for a Chinese automaker by a team of Chinese workers working in that country, it could be banned. But if a software was developed for a non-Chinese company by Chinese workers working in another country, it could be banned.
Reuters reported in May that four Chinese vehicle models are sold in the U.S., including the Polestar 2 and Volvo's S90 sedan. Polestar and Volvo are subsidiaries of Chinese automaker Geely.
Cannon said he expects companies like Volvo to meet with the Commerce Department and “work with us to discuss ways to mitigate the risk, and we're open to that” and that the agency may allow them to do so.
Volvo Cars said, “We are reviewing the US Department of Commerce's proposal and analysing any potential impact on us and the auto industry in the US.”
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First Publication Date: September 24, 2024, 07:21 AM IST