Baldwin Urges Mexican President to Take Action on China’s Connected Vehicles

WASHINGTON, D.C. – U.S. Senator Tammy Baldwin (D-WI) and a group of her colleagues are calling on Mexican President Claudia Sheinbaum to address the national security threat posed by advanced vehicles with ties to the Chinese Communist Party (CCP).

The letter asks Sheinbaum to take steps to scrutinize the manufacturing and sale of these vehicles and comes just after the U.S. Department of Commerce announced restrictions on the import and sale of connected vehicles tied to the CCP.

“As you prepare to take office, we ask that you quickly turn your attention to a new and growing issue: the national security risks to both our nations from the widespread presence of ‘connected’ vehicles built by companies with deep ties to the Chinese Communist Party,” said the members.

Today, nearly every new auto is a connected auto – with sophisticated sensors, computers, and the ability to transmit and receive data at long distances. These technologies enable important safety and convenience features, but they also gather, process, and transmit huge amounts of data with intelligence value for potential adversaries – including the Chinese Communist Party.

China has offered significant subsidies to auto manufacturers enabling them to export their vehicles and capture significant shares of foreign markets. One example is Mexico, where Chinese automakers have more-than-tripled their market share since the beginning of the decade. The U.S. has taken steps to combat this unfair trade practice, but there is concern that China may use its foothold in Mexico to circumvent those measures and enter the U.S. market.

“For our own national and economic security, the United States has taken action to confront this challenge, imposing targeted new tariffs on Chinese goods, including vehicles, because of these unfair trade practices,” the members continued. “The fact that Chinese companies, including automaker BYD, have announced plans for assembly plants in Mexico raises the potential for Chinese companies to attempt to circumvent these tariffs with production in Mexico.”

This letter was led by Senator Sherrod Brown (D-OH) and signed by Senators Debbie Stabenow (D-MI) and Gary Peters (D-MI). They are joined by U.S. Representatives Elissa Slotkin (D-MI-07), Yadira Caraveo (D-CO-08), André Carson (D-IN-07), Angie Craig (D-MN-02), Donald Davis (D-NC-01), Christopher Deluzio (D-PA-17), Debbie Dingell (D-MI-12), Val Hoyle (D-OR-04), Dan Kildee (D-MI-08), Greg Landsman (D-OH-01), Hillary Scholten (D-MI-03), Mikie Sherrill (D-NJ-11), Greg Stanton (D-AZ-04), Haley Stevens (D-MI-11), Thomas Suozzi (D-NY-03), Emilia Sykes (D-OH-13), and Susan Wild (D-PA-07).

A full version of the letter is available here and below.

Dear President-elect Sheinbaum,

Congratulations on your historic election victory as Mexico’s first woman president. Americans recognize the significance of your election and celebrate along with you, and we are looking forward to your swearing in on October 1, 2024. We know you will continue the productive relationship between our two neighboring countries.

As you prepare to take office, we ask that you quickly turn your attention to a new and growing issue: the national security risks to both our nations from the widespread presence of “connected” vehicles built by companies with deep ties to the Chinese Communist Party.

Today’s vehicles – including those made by Chinese companies – are equipped with sophisticated sensors, powerful computers, and networking capabilities that allow these connected vehicles to gather, store and transmit large amounts of data about their occupants and their surroundings. This includes 3D mapping, live action video, and geolocation of individuals. Chinese automakers have made significant inroads in the Mexican market, more than tripling their share of Mexico’s market since the start of this decade – with the data from that fleet of vehicles accessible to the Chinese Communist Party. This growth has rightly raised significant concerns with us in Congress, and we believe that these Chinese companies, which receive huge state subsidies, are now seeking to use Mexico as a base to enter the U.S. market.

We believe that this body of data, under the control of the Chinese Communist Party, is a national security threat. These vehicles can gather private, personal data on individuals, gather intelligence valuable to a potential adversary like China, and can even launch cyber attacks against critical infrastructure systems. Indeed, China itself recognizes the sensitive capabilities of connected vehicles and has taken actions to restrict the operation of foreign vehicles in China accordingly.

For our own national and economic security, the United States has taken action to confront this challenge, imposing targeted new tariffs on Chinese goods, including vehicles, because of these unfair trade practices. The fact that Chinese companies, including automaker BYD, have announced plans for assembly plants in Mexico raises the potential for Chinese companies to attempt to circumvent these tariffs with production in Mexico. We would note that U.S. officials are well aware of this potential and made clear that using Mexico in an effort to avoid U.S. tariffs could bring additional action by the United States.

Here in the United States, we have taken bipartisan steps to address these issues: tariffs, as mentioned above; executive orders to counter national security threats, and new legislative proposals to support these efforts. It is worth noting that many of these actions are reciprocal, mirroring restrictions that China has had in place for years on foreign vehicles. However, we remain concerned that Chinese companies will seek to use production in Mexico in an effort to bypass these measures.

With these facts in mind, we ask that your new Administration take the following steps to address these challenges:

• Formalize the current government’s policy, outlined in media reports, of refusing to grant federal economic development incentives – such as tax incentives and reduced utility and land costs – to firms with ties to the Chinese Communist Party, and to urge Mexican states to follow suit. This should include business partnerships with firms affiliated with the Chinese Communist Party, such as joint ventures with Mexican entities.

• Establish a national security review process to address risks posed by the manufacture or sale of vehicles built by Chinese firms to Mexico’s people, your national security, and the regional security of North American and Organization of American States nations. Such a process would follow-up the December 2023 Memorandum of Intent signed by the finance ministers of both our nations, which affirmed the importance of foreign investment screening in protecting national security.
• Send a delegation from your Administration to meet with officials from the U.S. Department of Commerce, the U.S. Department of Treasury, the Office of the United States Trade Representative, the National Economic Council, and the National Security Council by early 2025 to discuss how our nations can work together to address these risks.

For decades, our countries have worked together on issues affecting both our peoples. We have much work to do on issues such as international migration, the flow of narcotics and weapons across our shared border, economic and environmental policies and much more. And now it includes a shared approach to Chinese vehicles and control of data collected therein. This new challenge is complex and difficult, and is best met by working collaboratively – and we hope to take it on together.

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