US examines potential security risks from Chinese car technology

US President Joe Biden announced on Thursday, February 29, an investigation into national security risks posed by Chinese technology in automobiles, warning that it could be used to collect sensitive data.

Biden ordered the Commerce Department to launch an investigation in response to the threats, focusing on vehicles with technology from “countries of concern” such as China.

“China is determined to dominate the future of the automobile market by using unfair practices,” the head of state said in a statement.

“China's policies could flood our market with its vehicles, posing risks to our national security,” he added.

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As Washington tries to increase its domestic manufacturing capacity, the US auto industry is trying to reduce its dependence on China.

The research covers personal devices, other cars, U.S. infrastructure, and vehicles that constantly connect with their manufacturers, including electric and autonomous cars.

As part of the investigation, the Commerce Department will collect information from industry and the public.

New vulnerabilities

Connected vehicles collect vast amounts of data on drivers and passengers, record information about U.S. infrastructure through cameras and sensors and can be turned on or off remotely, the White House said.

If a foreign government gains access to its systems or data, “new vulnerabilities” could emerge, he said.

“This is a new recognition by the Biden administration that important and emerging technologies will shape both economic growth and national security,” Thibaut Denamiel of the Center for Strategic and International Studies told AFP.

He added that the new measure considers “risks associated with technology transfer to the United States.”

Previous measures to limit foreign investment or impose restrictions on semiconductor exports have addressed threats posed by U.S. transfers abroad.

Preventive action

Biden said Beijing is “imposing restrictions on American cars and other foreign cars operating in China.” “Why should China's connected vehicles be allowed to drive in our country without safety?”

While there aren't many such vehicles with Chinese-made technology on American roads right now, Commerce Secretary Gina Raimondo highlighted the need to “understand the intent of the technology in these cars.”

As China's automobile export market is growing rapidly, it is important to act before such vehicles are invaded, including in Europe, a senior US official told reporters on condition of anonymity.

In a conference call after the January results, Tesla CEO Elon Musk said Chinese companies in the sector are “very competitive” globally and their success outside of China is predictable.

“If the trade barriers are not put in place, they will almost destroy the rest of the car companies in the world,” he said.

The Alliance for American Manufacturing welcomed the investigation and called for more measures to protect the sector, including raising tariffs and limiting tax incentives for electric vehicles.

In November, 14 members of the US Congress sent letters to 10 China-related companies involved in the auto industry, including Baidu, DD Chuxing and AutoX.

The White House said this week that Biden would also issue an executive order aimed at restricting the flow of sensitive American personal data abroad.