U.S. Senate Passes Bill to Restrict Sales of Automakers with Over 15% Chinese Ownership—Mercedes-Benz Potentially Affected

On July 22, the U.S. Senate Committee on Commerce passed a bill that would prohibit automakers with more than 15% ownership by Chinese entities from selling vehicles in the United States. Introduced by Republican Senator Bernie Moreno and Democratic Senator Elissa Slotkin, the legislation aims to codify and expand upon vehicle-related restrictions on Chinese automakers initially implemented during the Biden administration. The bill not only restricts sales of complete vehicles but also covers Bluetooth, Wi-Fi, cellular, and certain satellite communication technologies used in those vehicles, citing alleged “national security” risks. Mercedes-Benz, whose shares include approximately 20% held by Chinese investors, could fall under these restrictions. Senate Commerce Committee Chairman Senator Ted Cruz (R-TX) stated that under the current language, Mercedes-Benz could be barred from selling cars in the U.S., though he noted the provision needs revision and emphasized that the U.S. “wouldn’t even consider” banning Mercedes-Benz sales. Moreno indicated that affected companies might be granted a transition period until 2030 and could apply for exemptions. Additionally, the bill encourages shifting automotive supply chains to the United States. General Motors plans to move production of the Buick Envision—currently manufactured in China—back to the U.S., and Ford will also shift production of certain Lincoln models currently made in China to U.S. facilities.