The Senate Commerce Committee approved bipartisan legislation Wednesday designed to strengthen restrictions on Chinese automakers in the U.S. market, though the bill’s sponsor acknowledged it may need revision after discovering it could unintentionally block Mercedes-Benz from selling vehicles domestically.
Committee Chairman Ted Cruz raised concerns during the markup of the Motor Vehicle Modernization Act of 2026, pointing out that the legislation’s 15% Chinese ownership threshold would affect Mercedes-Benz. Two Chinese investors collectively hold nearly 20% of the German automaker’s shares.
The company’s two largest individual shareholders are BAIC, a Chinese state-owned automaker formerly known as Beijing Automotive Industrial Corp., which owns a 9.98% stake, and Geely founder Li Shufu, who holds 9.69%.
The Texas Republican made clear that barring Mercedes-Benz was never the intent. “We would never consider” such a ban, Cruz said, adding that the bill would require changes before final passage.
National Security Rationale
The legislation aims to codify federal restrictions designed to keep Chinese-linked vehicle technology out of the United States over national security concerns. Officials worry that connected cars could be used to collect sensitive data on American drivers and infrastructure.
Sen. Bernie Moreno, the Ohio Republican who introduced the bill alongside Michigan Democrat Elissa Slotkin, defended the measure’s broader purpose. “We’re preventing an absolute, total, and complete destruction of our industrial base,” Moreno said.
According to Moreno, Mercedes-Benz would have until 2030 to comply with the ownership limit and could apply for a waiver under the bill’s provisions.
GM Accusation and Industry Impact
During the committee session, Cruz accused General Motors of backing the ownership provision as a competitive maneuver against Mercedes-Benz. “GM is pushing for this provision to get Mercedes-Benz out of the market,” the chairman said, suggesting the domestic automaker wants to strengthen Cadillac’s position.
Neither GM nor Mercedes-Benz immediately responded to requests for comment on Cruz’s allegation. GM holds the position as the top-selling automaker in the United States.
Mercedes-Benz has previously declined to comment on the legislation but emphasized its American presence, noting it employs more than 10,000 people in the U.S. and operates assembly plants in Alabama and South Carolina.
The bill’s advancement through committee represents growing congressional concern about Chinese influence in the automotive sector, though the Mercedes-Benz complication illustrates the difficulty of crafting ownership restrictions that target specific countries without catching allied manufacturers in the crossfire.
Source: www.cnbc.com — https://www.cnbc.com/2026/07/22/ted-cruz-china-auto-bill-mercedes-benz-gm.html
This article is for informational purposes only and does not constitute financial, investment, tax, or legal advice. Do your own research and consult a licensed professional before making financial decisions.
