A Bill To Crack Down on Chinese Cars Could Shut Mercedes-Benz Out of American Markets

A bill advancing in the Senate to crack down on Chinese cars could end up barring some European favorites from the U.S. market. 

Last week, the Senate Commerce, Science, and Transportation Committee unanimously advanced the Connected Vehicle Security Act of 2026. If passed, the bipartisan legislation would prohibit vehicles and vehicle software and hardware “linked to China or other foreign adversaries” from being imported, sold, or manufactured in the United States, according to a bill summary. Sen. Elissa Slotkin (D–Mich.), the bill’s cosponsor, described Chinese cars as “surveillance packages on wheels, with the ability to collect on American citizens and transmit that data back to Beijing.”

Thanks to tariffs and regulations, Chinese cars are already effectively banned in the U.S. market. However, this bill would take restrictions a step further by banning vehicles built by manufacturers that are more than 15 percent owned by China and other adversaries, including German luxury car company Mercedes-Benz, which has two Chinese shareholders—one state-owned—who both hold stakes under 10 percent. If Mercedes is barred from being sold or manufactured stateside, American consumers and the 5,800 workers the company employs at its Alabama plant would be at a loss. 

Mercedes-Benz would have legal avenues to appeal as the bill creates a formal authorization and waiver process. This would be similar to the one that Swedish luxury car brand Volvo—whose majority stakeholder is the Chinese company Geely—received in May.

While tackling foreign espionage may sound like a good idea, for all the fearmongering about Chinese vehicles—including from Sen. Bernie Moreno (R–Ohio), another cosponsor, who called Chinese cars “automotive fentanyl”—there is little evidence a coordinated, state-directed Chinese espionage campaign via cars is underway. 

And even in rare cases of susceptibility, companies have readily addressed the problem. In 2025, researchers flagged 13 software vulnerabilities in Mercedes-Benz vehicles. The manufacturer responded in turn with over‑the‑air patches, hardened network architectures, and formal vulnerability‑disclosure programs. 

Given that there doesn’t appear to be a serious threat of Chinese espionage on American roads, why did Slotkin and Moreno feel the need to write a bill with such wide-ranging implications on European manufacturers? Sen. Ted Cruz (R–Texas) may have provided the answer in the recent bill markup, when he called it “a very direct shot to inflict pain” on Mercedes for rejecting unionization efforts at its Alabama plant. He also posited that General Motors pushed the bill to weaken a rival automaker for its Cadillac model, reports The Wall Street Journal. 

“The current language in the bill is overly broad. It goes beyond the national security link this legislation is intended to address,” Cruz said during the committee hearing last week.

It would appear that Cruz is right that the bill has more to do with protectionism than national security. In her press release celebrating the bill’s passage out of committee, Slotkin accused the Chinese Communist Party of “subsidizing their product and underselling the competition” to the detriment of “Michigan’s auto industry and millions of American workers.” United Auto Workers (UAW) President Shawn Fain echoed the sentiment, calling for the end of “offshoring and outsourcing our auto industry” and the construction of more “affordable, high-quality vehicles for the American consumer, built by UAW autoworkers.” 

The evidence of a Chinese espionage campaign via connected cars like Mercedes-Benz is thin. The evidence of lawmakers trying to prop up unions and shielding them from foreign competition is not.