Political efforts aimed at barring Chinese vehicles from the U.S. are intensifying, with new legislation being proposed to assess the security threat China poses to the U.S. auto industry.
The details: The bipartisan Automotive National and Economic Security Act of 2026—introduced by Congresswoman Diana Harshbarger (R-Tenn.) and Congresswoman Debbie Dingell (D-Mich.)—would direct the U.S. Secretary of Commerce to study the national and economic security risks posed by foreign adversaries, with China being the bill’s primary target, according to a press release from Harshbarger’s office.
The study would assess foreign ownership of and state-directed investment in U.S. automakers by foreign military organizations, political parties and state-owned enterprises.
It would also evaluate joint ventures, subsidiaries and commercial partnerships between U.S. manufacturers and foreign adversaries, as well as transfers of critical and emerging technologies to foreign adversaries.
More broadly, the study would require the Commerce Department to evaluate how auto-related business ties with countries deemed “foreign adversaries” affect U.S. national security, economic competitiveness and intellectual property protection.
What they’re saying: “China has a playbook, and we've watched them run it on critical minerals, shipbuilding, and batteries,” said Congresswoman Diana Harshbarger, per the release. “Now they're setting their sights on the global automotive market, building out their industrial base with state subsidies and flooding markets with artificially cheap products to undercut American manufacturers.”
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Why it matters: Greater scrutiny of foreign ownership, partnerships, and technology ties could have significant implications for which automakers and vehicles can operate in the U.S., potentially affecting the brands dealers can represent, the products they can sell, and future investment across the retail network.
Between the lines: The proposed legislation comes as Mercedes-Benz finds itself at a critical crossroads over its Chinese affiliations, with its ability to continue selling connected vehicles in the U.S. potentially hinging on the Senate’s Connected Vehicle Security Act of 2026.
The proposed Senate bill currently sets a 15% cap on Chinese ownership for automakers selling connected vehicles, a threshold Mercedes exceeds because 20% of its ownership has Chinese ties.
That 20% stake is split between two shareholders: China's state-owned BAIC Motor and Geely Chairman Li Shufu.
Mercedes-Benz argues that neither shareholder owns more than 10%, has board representation, or exerts meaningful influence over operations.
The Senate Connected Vehicle Security Act of 2026—introduced in April by Sens. Elissa Slotkin (D-Mich.) and Bernie Moreno (R-Ohio)—still awaits consideration by the full Senate and must pass both chambers of Congress before it can be sent to the president to be enacted.
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