Breaking the automotive industry chain is a strategic mistake

The US Department of Commerce has proposed banning the use of smart parts and systems developed by Chinese companies for intelligent Internet-connected vehicles (ICVs), writes romanian.cri.cn.

In February 2024, the government in Washington announced the launch of an investigation into the so-called “cyber risks” generated by Chinese cars connected to the Internet, under the pretext of “national security”. Last week, US Commerce Secretary Gina Raimondo accused Chinese car companies of “collecting personal data” from the US and decided to impose 100% additional tariffs on Chinese electric vehicles.

Reuters commented that the US approach is aimed at obstructing the US market of highly competitive Chinese automobiles, to buy time for its own branch and to establish a supply chain.

Professor Li Haidong of the China College of Foreign Affairs points out that the forced connection of normal economic activities with “national security” aims to lay the groundwork for extreme policies towards China in the future.

In turn, CNN reported that as the elections approach, the two parties in the US are using a tough attitude towards China to win votes. Especially in the “swing states”, where the auto industry is relatively concentrated, China has become a key objective for the two parties in winning votes.

It has been proven that breaking the industrial chain through political means is not feasible, especially in the automotive industry, where the global industrial chain is deeply integrated. In this branch, with technological and cost advantages, Chinese products such as sensors, LiDAR and other software and hardware systems have become an ideal option for multinational car companies.

Major car manufacturers such as General Motors, Toyota, Volkswagen and Hyundai have announced that their systems “cannot be easily replaced by products from other suppliers”, making it almost impossible to completely eliminate the influence of Chinese technology and components.

“These are not trade violations on the part of China, but strategic mistakes by the US,” said Joseph Stiglitz, former chairman of the Economic Advisory Council of the US government.