US Senate panel targets China-linked autos

On July 22, 2026, the U.S. Senate Commerce Committee approved legislation aimed at strengthening the existing U.S. government ban on Chinese automakers entering the American market. The measure seeks to further limit the ability of automakers with significant Chinese ownership interests to sell vehicles in the United States. It reflects growing concern in Washington over the security and ownership profile of companies supplying vehicles to U.S. consumers.

A central feature of the bill is a prohibition on the import and sale of vehicles from automakers that are more than 15% owned by Chinese entities. This ownership-based threshold is designed to capture companies with substantial Chinese stakes, regardless of whether those holdings are characterized as passive or strategic. The rule would apply across the U.S. light-vehicle market, tightening access for Chinese-linked firms.

The 15% ownership cap has significant implications for non-Chinese carmakers that count Chinese investors among their shareholders. Mercedes-Benz (MBGd), which has nearly 20% passive Chinese ownership, would be directly affected under the proposed standard. Under the bill as drafted, this level of Chinese ownership could bar Mercedes-Benz (MBGd) from continuing to sell vehicles in the United States.

Senator Ted Cruz, who chairs the Senate Commerce Committee, warned during consideration of the bill that the 15% provision would, in practice, block Mercedes-Benz from the U.S. market. His remarks highlight the broader impact the legislation could have on global automakers with diversified investor bases. At the same time, Senator Bernie Moreno indicated that Mercedes-Benz would have until 2030 to bring its ownership structure into compliance with the requirement.

Moreno also stated that companies like Mercedes-Benz could obtain waivers under the bill, offering a potential route to maintain U.S. operations while adjustments are made. These elements introduce a degree of flexibility but do not alter the core direction of the legislation, which is to sharply limit Chinese ownership exposure among automakers selling vehicles in the U.S.

Beyond ownership thresholds, the proposed legislation targets the technological capabilities of modern vehicles. The rules would apply to key wireless and connectivity technologies found in cars, including Bluetooth, Wi-Fi, cellular connectivity and some satellite communications technologies. Lawmakers frame these provisions as responding to national security risks posed by networked vehicles with foreign-linked control or data access.

By linking market access to both ownership structure and connectivity features, the bill aims to address concerns that vehicles could be used to gather sensitive data or create vulnerabilities in digital infrastructure. Automakers seeking to sell connected vehicles in the U.S. would need to ensure that their Chinese ownership share remains below the 15% threshold or secure waivers where available. The legislation will now proceed beyond the committee stage for further consideration in the Senate.