Foreign Policy — 2024-03-01
Automotive Industry
The Biden administration on 29 February ordered the U.S. Commerce Department to investigate the potential national security threats posed by Chinese-made “connected vehicles,” marking Washington’s latest push to de-risk ties from Beijing and tighten the screws on China’s tech industry.
“These cars are connected to our phones, to navigation systems, to critical infrastructure, and to the companies that made them,” U.S. President Joe Biden said in a statement. Such vehicles “could collect sensitive data about our citizens and our infrastructure and send this data back to the People’s Republic of China,” he warned, while the cars themselves could be “remotely accessed or disabled.”
China has built itself into an electric vehicle (EV) production powerhouse, staking out a dominant position within the global industry that has rattled Washington and its European allies. The Biden administration’s announced investigation—the most recent example of how technology concerns have come to dominate U.S.-China relations—could lay the groundwork for future U.S. measures targeting the vehicles.
“China is determined to dominate the future of the auto market, including by using unfair practices,” Biden said. “China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on my watch.”
The Biden administration’s latest salvo fits into a broader escalation of U.S.-China competition over both the future of technology and technologies of the future. While the most high-profile actions have been against semiconductor chips, artificial intelligence, and outbound tech investment, Washington seems to be seeking more spigots to turn off.
“This appears to be part of the wider ongoing trade war between the US and China,” wrote Morgan Bazilian, the director of the Payne Institute at the Colorado School of the Mines, in an email to Foreign Policy, while noting that the Biden administration had invoked national security imperatives in its announcement.
“Certainly, there are real security threats on the cyber and data fronts, but the main impetus looks to me like an economic battle,” he added.
These economic worries aren’t limited to the United States. In recent months, fears about an influx of cheaper, Chinese-made EVs have also shaken Europe, one of Beijing’s main EV markets, even prompting European lawmakers to launch an investigation into alleged subsidies given by the Chinese government to domestic manufacturers of battery-powered EVs, undercutting EU manufacturers. As China’s EV exports have exploded by 851 percent in the past three years, most of the vehicles have landed in European markets.
While Chinese EV sales in the United States remain relatively small, similar concerns have also emerged in U.S. political debates, particularly as Biden and his likely Republican Party opponent, former President Donald Trump, gear up for a presidential election in November. Biden secured a major political win last month when the United Auto Workers union officially backed his reelection bid, while Trump has railed against Biden’s EV policies on the campaign trail in an effort to curry favor with autoworkers.
And indeed, in his statement, Biden didn’t exactly hide his political motivations. “As President I vowed to do right by auto workers and middle-class families that depend on the auto industry for jobs,” he said. “With this and other actions, we’re going to make sure the future of the auto industry will be made here in America with American workers.”
“The political economy around the automotive industry is very powerful and very important,” said Ilaria Mazzocco, an expert in Chinese business at the Center for Strategic and International Studies. “I think there is a serious concern that this could threaten a key industry in the developed world, in ways that would be extremely disruptive.”
Still, top U.S. officials stress that the investigation is rooted in national security concerns surrounding data. “It doesn’t take a lot of imagination to think of how foreign government with access to connected vehicles could pose a serious risk to both our national security and the personal privacy of U.S. citizens,” said Secretary of Commerce Gina Raimondo, who likened the vehicles to “smart phones on wheels.”
“We need to understand the extent of the technology in these cars that can capture wide swaths of data or remotely disable or manipulate connected vehicles,” she added.
The Biden administration’s latest announcement comes just one day after it issued an executive order focused on limiting the sale of Americans’ personal data to six “countries of concern,” including China and Russia. That order outlined six categories of sensitive information: genomic data, biometric data, financial data, personal health data, geolocation data, and certain categories of personally identifiable information.
But data flows may be more difficult to police, and the Biden administration’s latest curbs could have unintended consequences for U.S. citizens, the American Civil Liberties Union warned on Wednesday. “This executive order could further erode our right to share and access information without government interference, prohibit consumers from picking the online services that best meet their needs for privacy and security, and could actually end up harming privacy, rather than protecting it,” said Cody Venzke, a senior policy counsel at the ACLU, in a statement.
“To truly keep us safe online, the Biden administration should instead focus on pushing Congress to pass robust privacy legislation that stems the flood of data collected on us and embraces strong protections like encryption,” he added.
The two measures, coming close on the heels of each other, are the latest in a long line of presidential directives over the past few years aimed at cutting off China’s access to U.S. technology.
“If you take these policies all together, there is a shift—there’s a new paradigm,” said Emily Benson, a trade and technology expert at the Center for Strategic and International Studies. “Altogether, it’s a pretty clear symbol yet again that technology is at the forefront of this new economic and national security agenda, and that’s unlikely to change anytime soon.”