TMTPost -- The U.S. government is reported to introduce new curbs on China’s auto industry, targeting the autonomous driving and internet-connected vehicles.

Credit：Xinhua News Agency

The Biden administration plans to propose a rule that would bar Chinese software in vehicles in the United States with Level 3 automation and above, which would effectively ban testing on U.S. roads of autonomous vehicles produced by Chinese companies, Reuters reported Sunday, citing unidentified sources. The reported proposal, which is expected to release in the coming weeks, also include barring vehicles with Chinese-developed advanced wireless communications abilities modules from U.S. roads. Automakers and suppliers are required to verify that none of their connected vehicle or advanced autonomous vehicle software was developed in a "foreign entity of concern" like China, according to the sources.

The U.S. government plans to propose limits on US sales of Chinese vehicle software as soon as this month due to data security concern, Bloomberg cited people familiar with the matter Tuesday. The restrictions would include curbs on use and testing of Chinese technology for autonomous vehicles, according to the sources. The U.S. Commerce Department may propose a phase-in period to allow automakers to find new domestic sources or supplies from US trade partners, though the proposed plans are not final yet, the sources said.

The U.S. Commerce Department "is concerned about the national security risks associated with connected technologies in connected vehicles," a spokesperson at the department commented Sunday. The department's Bureau of Industry and Security will issue a proposed rule that will focus on specific systems of concern within the vehicle, according to the spokesperson, adding that industry will also have a chance to review that proposed rule and submit comments.

A spokesperson for the Chinese Embassy in Washington urged the U.S. to earnestly abide by market principles and international trade rules, and create a level playing field for companies from all countries. China will firmly defend its lawful rights and interests.

China opposes the US’s generalization of the concept of national security and discriminatory practices against Chinese-made electric vehicles and connected cars, a Chinese Foreign Ministry spokesperson responded to questions about the recent report. “China urges the US to respect market principles and provide an open, fair, transparent and non-discriminatory business environment for Chinese enterprises,” the spokesperson said. “China will resolutely safeguard its legitimate rights and interests.”

The U.S. has limited Chinese automakers’ presence in the country with a 27.5% tariff introduced under former President Donald Trump, and his successor Biden has decided to tighten  up the export curb earlier this year.

The White House announced on May 12 that U.S. President Joe Biden directed his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of Chinese imports in order to protect American workers and American companies from China’s unfair trade practices. The Biden administration will sharply ratchet up tariffs on semiconductors, EVs,EV batteries, battery parts, solar cells and steel and aluminum, and impose new tariffs on cranes and medical products. The tariff rate on EVs under Section 301 will increase to 100% in 2024, quadrupling the current tariff of 25%.

Reuters reported U.S. officials disclosed details of the govenment’s planned rule at a meeting last Wednesday. The State Department said it co-hosted a meeting that  opens new tab with allies and industry leaders to "jointly address the national security risks associated with connected vehicles."  Bloomberg echoed by citing a document that U.S. officials hosted a summit last week focused on connected vehicles with representatives from Australia, Canada, Germany, the European Union, India, Japan, South Korea, Spain and the UK.