A new bipartisan bill in the US Congress, aimed at limiting Chinese influence in the American auto industry, could inadvertently ban new Mercedes-Benz vehicles from the United States. The Motor Vehicle Modernization Act of 2026, introduced in the House by Representative Brett Guthrie (R-KY), would prohibit automakers with direct or indirect ownership ties to governments designated as US adversaries—including China, Russia, and North Korea—from manufacturing, selling, or importing vehicles into the US for five years.
Potential Unintended Consequences
Under the proposed legislation, even automakers already producing vehicles in the United States could lose exemptions if they exceed specific foreign government ownership thresholds. However, sources familiar with the bill indicate that its language might unintentionally capture Mercedes-Benz because its largest shareholder is BAIC, a Chinese state-owned automaker, as reported by CNBC. Unless lawmakers revise the proposal or Mercedes-Benz reduces or sells its ownership stakes, the German automaker could fall under the restrictions.
The wording of the bill is not entirely clear, leaving room for varying interpretations regarding enforcement. Depending on how regulators apply the rules, Mercedes-Benz could be affected despite its German base. Two sources told CNBC that the current language is sufficiently strong that, if passed as written, it would effectively prevent the company from operating in the US market.
Industry Reactions and Expert Opinions
A former automotive policy advisor and lobbyist consulted about the bill stated to CNBC, “The language is unambiguous.” The legislation has not yet advanced to the Senate and remains under consideration in the House. It includes a 15 percent ownership threshold to define potential foreign government influence, though exemptions and enforcement details have not been finalized.
Stephen Ezell of the Information Technology and Innovation Foundation commented to the outlet that Mercedes-Benz poses a lower national security risk compared to automakers directly controlled by the Chinese government. “If Mercedes were to be included in the bill, I think it would be an unintended consequence that could result in the loss of jobs and profits,” Ezell said.
A similar Senate proposal would also restrict companies with foreign ownership ties, though its exemption framework remains incomplete. If adopted broadly, such measures could potentially affect other automakers with Chinese investment, including Volvo, Lotus, Karma Automotive, and Faraday Future.
Daniel Kelly, spokesperson for the House Energy and Commerce Committee, confirmed the legislation’s details to CNBC but did not address its potential impact on specific companies like Mercedes-Benz. A Mercedes-Benz spokesperson declined to comment on the legislation when contacted by CNBC but noted that the company operates two major assembly plants in the US and employs more than 10,000 workers nationwide. The Independent has contacted the House Energy and Commerce Committee and Mercedes-Benz for further comment.
