Washington politics has hit a new peak of unintentional comedy: a proposed US Senate bill aimed at curbing Chinese influence in the automotive industry might accidentally ban Mercedes from American highways. The Senate Committee on Commerce, Science, and Transportation recently approved the draft text for full floor consideration, introducing a sweeping ban on the import, manufacturing, sale, and resale of connected vehicles if Chinese investors hold more than a 15% stake in the parent company.
On paper, the legislation targets foreign cybersecurity risks. In practice, Stuttgart finds itself caught directly in the crosshairs. While no single entity controls Mercedes, Chinese automotive giant BAIC holds just under 10%, while Geely founder Li Shufu owns nearly another 10%. Combined, that comfortably breaches the 15% limit.
Mercedes was quick to issue a statement reminding lawmakers that neither shareholder holds a seat on its supervisory board or exercises corporate decision-making power. However, nuance often gets lost when Capitol Hill drafts protectionist policy.
The potential collateral damage extends well beyond Germany. Detroit’s own domestic lineups are facing serious friction under the proposed rules. General Motors currently imports the Buick Envision from China, with domestic US production delayed until at least 2028, while Ford manufactures the Lincoln Nautilus there. Both companies also rely on vehicle software installed in China. Meanwhile, Polestar, owned by China’s Geely Group, is already staring at a forced exit from the US car market by 2027.
Sensing a looming crisis, Mercedes is reminding Washington of its massive American footprint. The luxury automaker highlighted that it supports roughly 160,000 jobs across the United States, anchored by major manufacturing plants in Tuscaloosa, Alabama, and Charleston, South Carolina. Having poured an average of $1 billion annually into the US economy over the last decade, Stuttgart is asking whether lawmakers really intend to jeopardize Southern manufacturing over corporate stock distribution.
Even within the Senate committee, key lawmakers seem uneasy with the bill’s blunt math. Republican Senator Ted Cruz advocated removing the 15% threshold altogether, questioning whether the figure was designed to unfairly penalize General Motors’ German rival. Both Cruz and fellow Republican Senator Bernardo Moreno insisted they do not actually want to block Mercedes sales in America. To soften the blow, the bill allows automakers to apply for Commerce Department exemptions, proving once again that Capitol Hill’s fiercest trade wars usually leave a very convenient backdoor open.
