🧠 Food for thought

Implications, context, and why it matters.

US policy builds a digital barrier around connected vehicles

• The US goes beyond a 100% tariff. It bars certain deals involving connected-vehicle hardware and software tied to China, including imports of vehicles with some China-linked covered software and certain China-linked connectivity hardware 1.
• The rule covers parts that run cellular links, Wi‑Fi modules, plus Bluetooth and satellite systems. It also covers software that directly powers vehicle connectivity systems or automated driving systems, which creates a digital barrier 1.
• A connected-vehicle maker owned by, controlled by, or subject to the jurisdiction or direction of China cannot knowingly sell completed connected vehicles in the US if they include vehicle connectivity hardware or covered software. That applies even when the hardware or software comes from outside China 1.
• Because the rule rests on national security, it may be harder for automakers to get around than tariffs 2.

Chinese automakers move closer through Canada and Mexico

• Chinese automakers cannot enter the US market directly, so they are building operations near it 2.
• In Mexico, BYD and Geely are finalists to buy a Nissan–Mercedes-Benz joint venture plant in Aguascalientes. The site can build 230,000 vehicles a year, giving either company a North American manufacturing base 3.
• Canada also allows up to 49,000 Chinese-built EVs a year at a 6.1% tariff rate under the January trade deal 4.
• US automakers are already adjusting. Auto suppliers say the planned 2028 launch of refreshed Chevrolet Silverado, GMC Sierra, and Cadillac Escalade IQ electric trucks has been shelved with no new timeline 5.