Source: Blog – Alliance for American Manufacturing

An BYD Han electric car on display in Cancun, Mexico. Getty Images

China has tripled its share of Mexico’s auto market since the start of the decade. That poses a national security risk to both the United States and Mexico, the lawmakers argue.

Democratic Members of Congress from both the Senate and House recently sent a letter to Mexican President Claudia Sheinbaum asking the newly inaugurated leader to take action to address the threat posed by connected vehicles made by companies with ties to the Chinese Communist Party (CCP).

Sen. Sherrod Brown (D-Ohio) joined with fellow Democratic Sens. Debbie Stabenow (Mich.), Gary Peters (Mich.), and Tammy Baldwin (Wis.) and 17 House members to write to Sheinbaum, calling for a “shared approach to Chinese vehicles and control of data collected therein.”

“Today’s vehicles – including those made by Chinese companies – are equipped with sophisticated sensors, powerful computers, and networking capabilities that allow these connected vehicles to gather, store and transmit large amounts of data about their occupants and their surroundings,” the lawmakers write. “This includes 3D mapping, live action video, and geolocation of individuals. Chinese automakers have made significant inroads in the Mexican market, more than tripling their share of Mexico’s market since the start of this decade – with the data from that fleet of vehicles accessible to the Chinese Communist Party. This growth has rightly raised significant concerns with us in Congress, and we believe that these Chinese companies, which receive huge state subsidies, are now seeking to use Mexico as a base to enter the U.S. market.”

House Members signing the letter include Reps. Elissa Slotkin (Mich.), Yadira Caraveo (Colo.), André Carson (Ind.), Angie Craig (Minn.), Don Davis (N.C.), Chris Deluzio (Pa.), Debbie Dingell (Mich.), Val Hoyle (Ore.), Dan Kildee (Mich.), Greg Landsman (Ohio), Hillary Scholten (Mich.), Mikie Sherrill (N.J.), Greg Stanton (Ariz.), Haley Stevens (Mich.), Tom Suozzi (N.Y.), Emilia Sykes (Ohio), and Susan Wild (Pa.).

The United States has taken steps to combat the threat of Chinese connected autos, including by issuing steep tariffs on Chinese auto imports. The Commerce Department also recently announced a proposed ban on the import or sale of hardware or software in connected vehicles that originate in China, citing national security concerns.

But there’s growing evidence that given these restrictions, China is aiming to use Mexico as a backdoor to get its autos into the U.S. market. Not only have Chinese auto exports to Mexico surged in recent years, but Chinese automakers and auto parts companies are building plants in Mexico, with more on the way.

In their letter to Sheinbaum, the Members of Congress argue that having all those connected vehicles in Mexico isn’t just a threat to the U.S., but also to Mexico, as the “body of data” collected by these autos is under the control of the CCP.

“These vehicles can gather private, personal data on individuals, gather intelligence valuable to a potential adversary like China, and can even launch cyber attacks against critical infrastructure systems,” they write. “Indeed, China itself recognizes the sensitive capabilities of connected vehicles and has taken actions to restrict the operation of foreign vehicles in China accordingly.”

Specifically, the lawmakers encourage Sheinbaum to formalize the current government’s policy “of refusing to grant federal economic development incentives – such as tax incentives and reduced utility and land costs – to firms with ties to the Chinese Communist Party, and to urge Mexican states to follow suit.”

They also ask the new president to establish a national security review process to “address risks posed by the manufacture or sale of vehicles built by Chinese firms to Mexico’s people, your national security, and the regional security of North American and Organization of American States nations.”

Finally, they call upon Sheinbaum to send a delegation by early 2025 to meet with top U.S. officials to “discuss how our nations can work together to address these risks.”

“For decades, our countries have worked together on issues affecting both our peoples,” the lawmakers write. “We have much work to do on issues such as international migration, the flow of narcotics and weapons across our shared border, economic and environmental policies and much more. And now it includes a shared approach to Chinese vehicles and control of data collected therein.”

Click here to read the full letter.

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