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Rules will effectively bar nearly all Chinese cars, trucks

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Final decision on rules to be left up to Trump

administration

By David Shepardson

WASHINGTON, Jan 14 (Reuters) - President Joe Biden's

outgoing administration is finalizing rules on Tuesday that will

effectively bar nearly all Chinese cars and trucks from the U.S.

market, as part of a crackdown on vehicle software and hardware

from China.

Washington's latest move against Chinese vehicles comes

after the Commerce Department said this month it was considering

a similar crackdown on Chinese-made drones, in the wake of last

year's steep tariff hikes on imports of its electric vehicles.

"It's really important because we don't want two million

Chinese cars on the road and then realize ... we have a threat,"

Commerce Secretary Gina Raimondo told Reuters in an interview,

citing national security concerns.

In September, her department proposed a sweeping ban on key

Chinese software and hardware in connected vehicles on American

roads, with software prohibitions to take effect in the 2027

model year and those on hardware in 2029. They also bar Chinese

car companies from testing self-driving cars on U.S. roads.

The rules also cover Russian vehicles and components.

The U.S. Commerce Department said in the final rules it was

making some changes, such as exempting vehicles heavier than

10,000 pounds from the requirements, which would let China's BYD

continue to assemble electric buses in California.

On Monday the department said it planned to soon propose

rules barring Chinese software and hardware in larger commercial

vehicles, including trucks and buses. A final decision will be

up to the incoming Trump administration.

In a shift, the department said the bans would not cover

Chinese software developed before the new rules took effect, so

long as it was not being maintained by a Chinese firm.

That means General Motors ( GM ) and Ford could

potentially continue to import some Chinese-made vehicles for

U.S. buyers, a senior official told reporters.

The Alliance for Automotive Innovation, representing GM,

Toyota Motor ( TM ), Volkswagen, Hyundai Motor ( HYMTF )

, and other major automakers, unsuccessfully sought

an additional year to meet the hardware requirements.

Polestar, the Swedish automaker that is a brand of China's

Geely warned in October that without changes the

Commerce rule would "effectively prohibit" it from selling

vehicles in the United States.

An administration official said officials expect Polestar

would need to seek specific authorization under the final rule.

Polestar declined to comment.

In September, the Biden admnistration finalized steep tariff

hikes on Chinese electric vehicle imports and this month it put

key Chinese battery company CATL on a list of firms

accused of aiding the country's military.

President-elect Donald Trump, who takes office on Jan. 20,

wants to prevent Chinese auto imports but is open to Chinese

automakers building vehicles in the United States.