Recently, the Biden administration in the USA is considering new regulations to prevent the sale and import of Internet-connected auto hardware and software from China and Russia. In response, a spokesperson from the Chinese Ministry of Foreign Affairs has stated that this action by the USA is harmful and will ultimately damage the country's own interests.

On Friday, US Department of Commerce published forecasts in the US Eastern Time, confirming the statements made by the spokesperson from the Chinese Ministry of Foreign Affairs.

The US Department of Commerce stated that if the proposed restrictions on Chinese networked car software, hardware, and regulations related to complete vehicles are implemented, US auto sales could decrease by up to 25,841 vehicles annually, leading to potential price increases and further raising living costs for American consumers.

New regulations from the USA against China harm its own interests.

Recently, the Biden administration in the USA has been drafting new regulations to ban the use of Chinese software and hardware in smart connected autos and vehicles equipped with autonomous driving technology on American roads. This move is viewed by the US Department of Commerce as a matter of 'national security'.

The spokesperson Lin Jian from the Chinese Ministry of Foreign Affairs stated that the US adopting discriminatory practices against specific foreign companies and products violates basic principles of the World Trade Organization, disrupts international trade and investment, disrupts the stability of the global production and supply chain, and will eventually harm the USA's own interests. China has also noted significant questioning from the US industry. The USA should stop using national security as an excuse to suppress other countries and create an open, fair, transparent, and non-discriminatory business environment for enterprises worldwide. China will firmly defend its legitimate rights and interests.

On Friday in the US Eastern Time, the US Department of Commerce admitted that American auto manufacturers and other manufacturers selling vehicles in the USA might have weaker competitiveness in the global market, as their car prices are relatively high.

The US Department of Commerce estimates that if the relevant restrictions on china national software & service, hardware, and passenger vehicles are implemented, the annual auto sales in the USA will decrease by 1,680 to 25,841 vehicles.

The US Department of Commerce also estimates that the regulation may prohibit Chinese or Russian companies from selling auto parts worth $1.5 billion to $2.3 billion to the USA.

A senior government official revealed that this regulation does not apply to vehicles already on the road in the USA with china national software installed. The US Department of Commerce states that the software ban will take effect for the 2027 models, while the hardware ban will take effect for the 2030 models. The public has 30 days to comment before the rules can be finalized.

US auto trade prices have reached near historic highs.

It is worth mentioning that just this week, morgan stanley analyst Adam Jonas has recently downgraded ratings for various US auto manufacturers including general motors, ford, and Rivian.

Jonas pointed out in the report that US auto manufacturers are facing issues of insufficient competitiveness in terms of price and product offerings, resulting in a continuous decline in market share of US auto manufacturers.

He also mentioned that the average transaction prices of US autos have reached near historic highs, putting pressure on American consumers. Despite the recent interest rate cuts by the Federal Reserve, the average monthly car payment in the USA has exceeded $700, which is a significant burden for American consumers.

US domestic auto manufacturers are also affected.

The U.S. Department of Commerce has previously stated that this regulation will effectively be equivalent to a ban on all Chinese vehicles, as all vehicles will be equipped with connected car software and hardware.

However, from the current data perspective, the quantity of car products manufactured in China and exported to the USA is relatively low, and some industry insiders also believe that the U.S. new regulations are considered "preventive" measures, with a limited short-term impact on overall Chinese car exports.

According to the China Passenger Car Association statistics, in 2023, the total number of passenger vehicles exported from China to the USA was 0.0748 million units, accounting for only 1.4% of total exports; new energy passenger vehicles were 0.0186 million units, accounting for only 0.4%.

However, it is worth mentioning that this U.S. regulation will not only affect Chinese car companies but also impact U.S. domestic car companies. According to this regulation, General Motors and Ford Motor will need to stop importing cars from China to the USA.

Currently, both the Buick Envision sold by General Motors in the U.S. market and the Lincoln Aviator sold by Ford in the U.S. are produced in China. In the first half of 2024, General Motors sold approximately 0.022 million Envisions in the USA, and Ford sold 0.0175 million Aviators in the USA.