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TMTPOST -- The Biden administration is working to impose more curbs on China in its final push. In addition to reported further export restricitons on artificial intelligence (AI) chips, the U.S. government plans to formulate rules targeting China’s auto industry.

Credit：Xinhua News Agency

Next week, the Biden administration will finalize rules cracking down on Chinese vehicle software and hardware, U.S. Commerce Secretary Gina Raimondo told Reuters. Raimondo said that the rules are important because " it’s critical that we act now to prevent the potential threat of having millions of Chinese-made cars on the road."

Raimondo’s remark mark conclusion of the rulemaking process initiated in last September. U.S. President Joe Biden that month announced strong action to protect America from the national security risks associated with connected vehicle technologies from countries of concern. The Commerce Department the same month proposed a rule to prohibit the sale or import of connected vehicles that incorporate certain technology and the import of particular components themselves from countries of concern, specifically China and Russia.

According to the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), the proposed rule focuses on hardware and software integrated into the Vehicle Connectivity System (VCS) and software integrated into the Automated Driving System (ADS). These are the critical systems that, through specific hardware and software, allow for external connectivity and autonomous driving capabilities in connected vehicles. Malicious access to these systems could allow adversaries to access and collect our most sensitive data and remotely manipulate cars on American roads. The proposed rule would apply to all wheeled on-road vehicles such as cars, trucks, and buses, but would exclude vehicles not used on public roads like agricultural or mining vehicles.

The prohibitions on software would take effect for Model Year 2027, and the prohibitions on hardware would take effect for Model Year 2030, or January 1, 2029 for units without a model year.

BIS said the agency and its Office of Information and Communications Technology and Services (OICTS) have found that certain technologies originating from China or Russia present an undue risk to both U.S. critical infrastructure and those who use connected vehicles.

The proposed rule mainly involves the software and hardware related to intelligent connected vehicles, including intelligent driving software, driver assistance software, and vehicle control software, Cui Dongshu, secretary general of the China Passenger Car Association (CPCA), told the state-backed newspaper Global Times.

For Chinese companies that manufacture the components, should they face restrictions, they are well-positioned to explore alternative markets, including Europe, Southeast Asia, and Russia, Cui said. However, international companies, particularly those that manufacture in China and sell back to the US, such as some models from General Motors (GM) and Ford , will be mainly impacted by the rule, according to Cui.

The paper also cited experts that American automotive industry will likely bear a high cost for the attempt to replace the Chinese supply chain.

Earlier this week, the Biden administration was reported to plan an additional round of curbs on AI chip exports from American giants like Nvidia Corporation. It was reported the U.S. government wants restrict the sale of AI chips used in data centers on both a country and company basis, with the goal of concentrating AI development in friendly nations and getting businesses around the world to align with American standards.

The regulations represent an expansion of semiconductor caps to most of the world as it will create three tiers of chip trade restrictions, Bloomberg reported on Wednesday. A small number of U.S. allies, at the top level, would maintain essentially unmitigated access to American chips, while a group of alleged adversaries would be effectively blocked from importing the chips, per the report. And other countries, the vast majority of the world have to be reportedly subject to limits on the total computing power that can go to one country.