USA proposes ban on smart cars with Chinese and Russian technology

CNN
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The U.S. Commerce Department will propose on Monday a ban on the sale or import of smart vehicles that use special Chinese or Russian technology for national security reasons, U.S. officials said.

A U.S. government investigation that began in February uncovered a number of national security risks posed by software and hardware from China and Russia embedded in U.S. vehicles, including the potential for remote sabotage by hackers and the collection of drivers' personal data, U.S. Commerce Secretary Gina Raimondo said on a conference call with reporters on Sunday.

“In extreme situations, a foreign adversary could simultaneously disable or take control of all of its vehicles operating in the United States, causing accidents or blocking roads,” she said.

The rule would not apply to cars already on the road in the U.S. that already have Chinese software installed, a senior administration official told CNN. The software ban would take effect for “model year” 2027 vehicles and the hardware ban for “model year” 2030, the Commerce Department said.

The proposed regulatory measures are part of a much broader battle between the United States and China, the world's two largest economies, to secure supply chains for the most important computing technology of the future, from semiconductors to AI software.

China in particular has invested heavily in the market for connected cars and the progress made by Chinese manufacturers in Europe is causing concern among US authorities.

The Chinese government also has concerns about the data collected by Tesla (TSLA) vehicles and some Chinese government agencies have banned the vehicles from entering their premises, as CNN previously reported.

The Commerce Department's proposed rule affects “connected vehicles,” a broad term for virtually any modern car, bus or truck that uses network connections for roadside assistance, satellite communications or a range of other functions. It includes hardware and software that interact with key technologies that enable a vehicle to communicate with the outside world, such as Bluetooth, Wi-Fi and cellular technology.

There will be a 30-day public comment period on the proposed rule, and the Commerce Department intends to issue a final rule before the end of the Biden administration, a senior administration official told reporters. On Monday, the Biden administration will also release an economic analysis of the projected costs to automakers and consumers of complying with the proposed rule, the official said.

Raimondo said Monday's announcement was not a protectionist move, as Chinese critics had accused.

“This is not about trade or economic gain,” Raimondo said. “This is a purely national security measure.”

“For example, if (China) or Russia could collect data about where the driver lives, what school his children go to or where his doctor is, that would be data that would make the American in question vulnerable,” she said.

US authorities fear that charging stations and other infrastructure equipped with certain hardware or software could be exploited by hackers with ties to China, Russia or other foreign powers.

“We have already seen ample evidence of the PRC planting malware on our critical infrastructure to disrupt and sabotage it,” White House national security adviser Jake Sullivan told reporters on the conference call, using an acronym for the Chinese government. If millions more smart cars with vulnerable Chinese-made technology were on U.S. roads, “the risk of disruption and sabotage increases dramatically,” he said.

The Chinese government has rejected US allegations that its hackers infiltrated US infrastructure.

“China opposes the US expansion of the concept of national security and the discriminatory measures against Chinese companies and products,” Lin Jian, spokesman for the Chinese Foreign Ministry, said in a statement. “We call on the US side to respect market principles and provide Chinese companies with an open, fair, transparent and non-discriminatory business environment.”

It's the latest example of the Commerce Department trying to use its broad regulatory powers to protect U.S. consumers from foreign-developed software deemed a national security threat.

In June, the ministry banned the sale and provision of certain products and services of Russian cybersecurity company Kaspersky Lab, whose antivirus software is used by hundreds of millions of people around the world.

The proposed ban comes on the same day that the White House announced a series of new initiatives to support auto workers, particularly targeting the key swing state of Michigan – a crucial state for President Joe Biden's victory in 2020. Vice President Kamala Harris' campaign team is convinced that Michigan is a must-win in November.

Other initiatives announced by the White House on Monday include $1 billion in funding for small and mid-sized auto suppliers, a new pilot program to train workers in the state's most populous county for jobs in the automotive supply chain, funding to support additional training for workers to install electric vehicle chargers, and other initiatives across the state.

It's a series of measures aimed at one of Biden and Harris' key support groups: unionized autoworkers in the Midwest. Last year, Biden became the first president to visit a picket line during the United Auto Workers strike and has made union recruitment a key part of his policy message while in the White House.

Harris has taken on that role and has been to Michigan several times since taking the top spot on the ballot. The White House fact sheet announcing the new initiatives notably includes a quote from the Vice President touting the programs, but zero quotes from Biden.

“I believe in an economy where everyone has a chance to compete and succeed. Investing in the ambitions and aspirations of our people is the best way to grow the American economy and middle class,” Harris said in the statement. “Yet for far too long, we have seen a lack of investment in communities across America and significant barriers to economic opportunity – including in communities with historic manufacturing prowess like Detroit.”

CNN's Shawn Deng contributed to this report.