A major luxury automaker could face new restrictions in the United States as lawmakers push legislation aimed at reducing China’s influence over America’s automotive industry.
The proposal, which recently advanced through the Senate Commerce Committee, would prohibit the sale of connected vehicles made by automakers with significant Chinese ownership. If the legislation ultimately becomes law, Mercedes-Benz could be among the companies affected because Chinese investors own nearly 20% of the German automaker.
While no final decision has been made, the proposal reflects growing concern in Washington over national security, data privacy, and America’s economic competition with China.
Supporters of the bill say modern connected vehicles collect enormous amounts of information, including location data, driving habits, vehicle diagnostics, and other digital information. They argue that allowing companies with strong financial ties to China to sell these vehicles in the United States could create long-term security risks if sensitive data were ever accessed by the Chinese government.
The bipartisan legislation was introduced by Sen. Elissa Slotkin (D-Mich.) and Sen. Bernie Moreno (R-Ohio). According to the lawmakers, the bill would strengthen existing restrictions by preventing Chinese-linked vehicles, software, and key automotive technology from entering the American marketplace.
Slotkin argued that today’s connected vehicles are essentially rolling computers capable of collecting valuable information every time they are driven.
Moreno said the legislation is about protecting both America’s economy and its national security. He warned that China’s automotive industry has grown rapidly through aggressive government support and policies that have placed pressure on manufacturers around the world.
According to Moreno, protecting American manufacturing should remain a top priority as foreign competition continues to increase.
The proposal also aligns with broader efforts by President Donald Trump’s administration to reduce America’s dependence on China in critical industries while encouraging more manufacturing jobs to return to the United States.
Not everyone, however, agrees with the bill in its current form.
Sen. Ted Cruz (R-Texas), chairman of the Senate Commerce Committee, cautioned that the legislation could unintentionally prevent Mercedes-Benz from selling connected vehicles in the American market.
Cruz said Congress should carefully revise the proposal to ensure it targets genuine national security concerns without unfairly penalizing long-established companies that employ thousands of American workers.
He also accused General Motors of supporting provisions that could give its Cadillac luxury division a competitive advantage if Mercedes-Benz were restricted.
General Motors rejected that claim.
The automaker said its support for the legislation is focused on protecting American manufacturing, strengthening national security, and ensuring U.S. automakers can compete fairly against heavily subsidized foreign competitors.
GM added that American companies can compete successfully when the marketplace operates on equal terms.
Mercedes-Benz also emphasized its longstanding investment in the United States.
The company noted that it employs thousands of American workers, operates manufacturing facilities within the country, and remains committed to supporting legislation that protects U.S. national security.
At the same time, Mercedes-Benz said it hopes any final legislation is carefully written so it does not unnecessarily disrupt its American operations, employees, dealerships, suppliers, or customers.
The legislation does include a process allowing automakers to seek approval from the Commerce Department if their vehicles would otherwise fall under the proposed restrictions.
Supporters say that provision provides flexibility while still protecting America’s security interests.
Moreno also highlighted what he described as positive signs for domestic manufacturing.
According to the senator, General Motors plans to move production of the Buick Envision from China to the United States beginning with the 2028 model year. He also said Ford intends to relocate production of certain Lincoln models currently built in China.
If those plans move forward, they could create additional manufacturing opportunities inside the United States while reducing dependence on overseas production.
Moreno described those commitments as an important win for American workers and the future of U.S. manufacturing.
He also said Google’s self-driving technology company, Waymo, has reportedly begun exploring Detroit-based manufacturers for future vehicle platforms rather than relying on Chinese automaker Geely.
Meanwhile, Cruz expressed concern about another section of the legislation that he believes could require manufacturers to purchase higher-priced batteries from General Motors, potentially increasing vehicle costs by approximately $5,000.
That debate is expected to continue as lawmakers negotiate possible changes before any final vote.
The legislation comes shortly after another significant move involving Chinese-linked automakers.
Last month, the Trump administration announced that Polestar would no longer be allowed to sell new connected vehicles in the United States beginning with the 2027 model year because the company is majority-owned by China’s Geely.
Volvo Cars, another automaker with ties to Geely, previously received approval to continue selling vehicles in the United States under current federal rules.
The latest proposal demonstrates how concerns over Chinese ownership, connected vehicle technology, cybersecurity, and American manufacturing have become increasingly important issues in Washington.
Lawmakers from both parties have argued that future vehicles will generate even more digital information than today’s models, making data security a growing priority for federal regulators.
The bill still faces several major hurdles before becoming law.
It must first pass the full Senate before moving to the House of Representatives. If approved by both chambers of Congress, the legislation would then head to President Donald Trump’s desk for his signature.
For now, Mercedes-Benz continues to sell its vehicles in the United States, and no immediate changes are taking effect.
However, if lawmakers ultimately approve the proposal, it could reshape the U.S. auto industry, strengthen restrictions on Chinese involvement in America’s vehicle market, and mark another major step in the Trump administration’s broader effort to protect national security, support American manufacturing, and reduce reliance on China in strategically important industries.
