Raimondo Says Connected Vehicle Rule Could Ban Chinese Cars at 'Most Extreme'

Commerce Secretary Gina Raimondo told the House Energy and Commerce Committee that the content of a rule on connected vehicles made by Chinese companies hasn't been decided yet, but she said the more she learns about the ability for surveillance by advanced cars, the more it scares her.

"In the most extreme case, we could say no Chinese connected vehicles allowed in America," Raimondo told Rep. Debbie Dingell, D-Mich. "We could say the software has to be American made. We could say the data has to reside in the U.S."

The advanced notice of proposed rulemaking (see 2402290034) could affect cars assembled in countries other than China, even potentially the U.S., if the ownership of the company is Chinese. Volvo is Chinese owned, and makes cars in South Carolina; Polestar, a new Chinese EV maker that spun off from Volvo, is building a factory in South Carolina.

Raimondo said that she hopes the rule will come out later in the fall, but said it certainly will come out by the end of the year. She said the agency received a lot of comments, and that Commerce officials are "working with industry to make sure we don’t have unintended consequences" (see 2405060040).

Rep. Jeff Duncan, R-S.C., asked Raimondo if she agreed the U.S. is in an economic Cold War with China. She didn't endorse that term, but said the two countries are in a "great competition," and that she agreed that Section 301 tariffs help the U.S.

Duncan asked her if Commerce is taking an antidumping duty request by Electrolux seriously (see 2406050020). He said that Chinese steel and Chinese parts go to Thailand, where they are assembled into low-cost refrigerators by Chinese appliance giant Midea. That company asked CBP for a Customs ruling in 2020, about whether the refrigerators would be subject to Section 301 tariffs, and the New York ruling, N309293, said that the Chinese evaporator, compressor and metal don't make the appliances Chinese, it's the more complex manufacturing in Thailand that causes substantial transformation, and therefore confers country of origin.

Duncan said Midea's market share in top-mount refrigerators quickly grew from 8% to 28% last quarter, and that their appliances are half the price of U.S. competitors' products. He said this import substitution has resulted in the loss of 160 jobs in his district so far.

Raimondo said that because antidumping cases are a quasi-judicial process, "I’m limited in what I can say here. We’ll take it seriously and if we need to, we’ll assess a duty to level the playing field."