U.S. Lawmakers Urge Mexican President-Elect to Address Security Concerns

By David Shepardson

WASHINGTON (Reuters) – Approximately 20 Democrats in the U.S. Congress urged Mexican President-elect Claudia Sheinbaum on Tuesday to address the national security risks associated with internet-connected vehicles manufactured by Chinese automakers in Mexico.

Modern vehicles are equipped with onboard network hardware that provides internet access, allowing them to share data with both internal and external devices.

A group of lawmakers led by Representative Elissa Slotkin and Senator Sherrod Brown sent a letter to Sheinbaum, requesting that she establish a national review and send a delegation to the United States by early 2025 for discussions.

The U.S. government fears that China, regarded as a strategic and economic rival, might exploit the data collected by connected vehicles for surveillance purposes or, in extreme cases, gain remote control over these vehicles via the internet and navigation systems.

The letter stated, “We believe that this body of data, under the control of the Chinese Communist Party, is a national security threat,” and was also signed by Senators Gary Peters, Debbie Stabenow, and Tammy Baldwin.

Last week, President Joe Biden proposed banning Chinese-made software and hardware in connected vehicles on American roads, which would effectively exclude Chinese cars and trucks from the U.S. market and prevent new vehicles produced in Mexico by Chinese companies from entering.

In response to U.S. criticism, China has accused the U.S. of lacking factual basis and described the actions as a typical protectionist approach, stating they violate market economy principles and fair competition.

The Biden administration is actively pursuing measures to block Chinese automobiles from entering the U.S. market, as advocacy groups have raised concerns about alleged unfair competition from heavily state-subsidized Chinese electric vehicles.

Earlier this month, Biden increased tariffs on Chinese-made electric vehicles by 100%, despite only four Chinese light-duty vehicles being sold in the U.S. Congress had established legislation in 2022 to bar electric vehicles produced in China from being eligible for tax credits.

The lawmakers highlighted the growing presence of Chinese automakers in the Mexican market, which they believe raises significant concerns about attempts to use Mexico as a gateway into the U.S. market.

Notably, the letter mentioned Chinese electric vehicle maker BYD (SZ:002594), which is planning to construct a factory in Mexico. This development could potentially allow Chinese companies to avoid U.S. tariffs by increasing production in Mexico.