China's stakes in Mercedes threaten US sales ban
A committee in the U.S. Senate has introduced a bill that, if enacted, could ban the sale of Mercedes-Benz vehicles in the United States due to China’s stake in the German automaker, potentially paving the way for a clash as the proposal advances through Congress.
The Associated Press reported that members of the Senate Commerce, Science, and Transportation Committee unanimously voted on Wednesday to refer the “Connected Vehicle Security Act” to the full Senate for consideration. However, deliberations during Wednesday’s hearing revealed divisions that cast doubt on the bill’s chances of passage in its current form.
Under the bill, the sale of internet-connected vehicles would be prohibited for automakers in which Chinese entities hold more than 15% ownership, according to Bloomberg News.
Chinese state-owned automaker BAIC Motor owns nearly 10% of Mercedes-Benz, which has lobbied for amendments to the legislation.
Additionally, Li Shufu, the billionaire founder and chairman of Chinese automaker Geely, holds nearly 10% of Mercedes-Benz shares, placing the company above the bill’s 15% ownership threshold.
Ownership provisions were the main point of contention during the committee’s consideration of the legislation on Wednesday. Senator Ted Cruz, a Republican from Texas who chairs the Senate Commerce Committee, criticized the 15% rule and called for replacing it with more nuanced national security risk assessments, modeled after those conducted by the Committee on Foreign Investment in the United States (CFIUS).
For his part, Senator Bernie Moreno, a Republican from Ohio and a co-sponsor of the bill, disputed claims that the measure was specifically targeting the German automaker.
Moreno stated that Mercedes-Benz would have until 2030 to comply with the bill if it becomes law. He added that companies could apply for exemptions from the Department of Commerce if they fail to meet the bill’s requirements.
Bloomberg reported that Mercedes-Benz has lobbied for amendments to the bill, including raising the permissible Chinese ownership threshold to 25%.
