German Media: U.S. Drafts New Law Targeting China, Mercedes-Benz Caught in Crossfire

The United States is currently discussing a bill aimed at excluding manufacturers with Chinese shareholders from the U.S. market, and Germany's Mercedes-Benz will be directly affected. Additionally, German media are also paying attention to China's newly enforced "Regulations on the Protection of Trade Secrets," which now includes safeguards for algorithms and computer software.

The "2026 Automotive Modernization Act" was submitted to the U.S. House of Representatives in early February this year, initially intended to fund transportation and infrastructure standards in the U.S. over the next five years. However, the scope of the bill has since been expanded. The updated version includes provisions to curb the influence of "foreign hostile entities" on the American automotive industry—entities the U.S. identifies as including Russia and North Korea.

The new draft stipulates that automobile manufacturers controlled directly or indirectly by such countries, if their equity exceeds 15%, will be prohibited from continuing production, importation, or sales in the United States. Currently, the bill remains under review, with neither Congress nor the President having yet approved it.

Mercedes-Benz’s largest single shareholder is Beijing Automotive Industry Holding Group (BAIC), a Chinese state-owned enterprise, which owns 9.98% of the company. Additionally, Li Shufu, founder of Zhejiang Geely Holding Group, holds 9.69% of shares. Combined, their ownership totals 19.67%, surpassing the proposed 15% threshold outlined in the draft.

“Motor Engine & Motion” published an article titled “Mercedes-Benz Faces Threat of Being Banned from Selling Cars in the U.S.,” stating, “Both Chinese investments are strategic in nature. Neither BAIC nor Li Shufu holds a seat on Mercedes-Benz Group’s supervisory board, nor do they control the company’s operations. Nevertheless, according to the current draft, shareholding size may prove decisive.”

“For decades, Mercedes-Benz has been one of the largest foreign automotive investors in the United States. The factory in Tuscaloosa, Alabama, launched in 1997, was the company’s first major passenger vehicle plant outside Germany, marking its official entry into the North American market and beginning local production. To date, this facility has delivered more than 5 million vehicles.” In addition to the Alabama plant, Mercedes-Benz operates sales, research and development, logistics hubs across the U.S., providing over 11,000 jobs.

“Although the draft includes an exemption clause allowing manufacturers that have produced vehicles in the U.S. for at least five years to be exempt from restrictions, these exemptions do not apply if a manufacturer has direct or indirect ties to a hostile nation. This means that despite Mercedes-Benz’s strong manufacturing presence in the U.S., it could still face legal constraints. How exactly the language of the draft will ultimately be interpreted remains uncertain.”

The article concludes: “The U.S. ‘2026 Automotive Modernization Act’ not only targets China but also aims at multinational corporations with Chinese shareholders—an unprecedented move. Given that nearly 20% of Mercedes-Benz Group’s shares are held by Chinese investors, the company would theoretically fall directly under the act’s jurisdiction. However, opponents emphasize the strength of the Mercedes-Benz brand and its hundreds of billions of dollars in investment—especially the contribution made by the Alabama SUV plant. Yet it is well known that recent decisions by the U.S. government are not always driven by rational considerations.”

Source: DW

Original: toutiao.com/article/1867044411679744/

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