Mercedes-Benz autos sit parked, on the day U.S. President Donald Trump is about to announce new tariffs, at a dealership in Copiague, New York, U.S., April 2, 2025.
Shannon Stapleton | Reuters
Mercedes-Benz might discover itself shut out of the U.S. auto market — banned from making or promoting new autos within the nation — underneath laws making its method by means of Congress.
New bipartisan laws geared toward limiting Chinese language involvement within the U.S. auto market could sweep in Mercedes-Benz except the invoice is modified or the German automaker’s largest shareholder sells its stake.
The invoice, the Motor Car Modernization Act of 2026, would prohibit automakers which have “any direct or oblique fairness curiosity by a foreign-adversary authorities,” comparable to China, from importing, promoting or manufacturing autos on the market within the U.S.
Mercedes-Benz’s largest particular person shareholder is the state-owned Chinese language automaker BAIC, previously the Beijing Automotive Industrial Corp., with a 9.98% share. The potential implications of the laws on the automaker are beforehand unreported.
A number of individuals acquainted with the laws who spoke to CNBC cited grey areas within the invoice that, relying on how they’re interpreted, might ban Mercedes-Benz from working within the U.S.
Two sources who agreed to talk on the situation of anonymity for worry of repercussions or as a result of they weren’t approved to talk publicly mentioned they imagine the invoice, because it’s presently written, would ban the corporate.
“The language is unambiguous,” mentioned a former automotive coverage advisor and lobbyist who was consulted concerning the invoice.
Daniel Kelly, press secretary for the Vitality and Commerce Committee, confirmed the main points of the laws. He declined to remark straight on potential impacts for particular person corporations, together with Mercedes-Benz.
A spokesman for Mercedes-Benz declined to touch upon the laws however instructed CNBC on Friday the automaker has two massive meeting vegetation and employs greater than 10,000 individuals within the U.S.
A cap on overseas possession
The invoice comes as lawmakers in each events search to stop Chinese language automakers from gaining a foothold within the U.S. market, at the same time as Chinese language possession already runs by means of components of the worldwide auto trade.
The invoice, which is sponsored by Home Vitality and Commerce Committee Chairman Brett Guthrie, R-Ky., is presently a Home-only initiative with no Senate companion. It consists of exemptions for China-backed corporations, however not in the event that they’re straight or not directly owned by the Chinese language authorities.
Automakers which have manufactured passenger autos within the U.S. for no less than 5 years earlier than Jan. 1, 2026, might qualify for an exemption. However the invoice says that exemption doesn’t apply to corporations with “any direct or oblique fairness curiosity by a foreign-adversary authorities.”
China is listed as a overseas adversary together with Russia and North Korea.
The invoice goals to ban corporations with such possession from manufacturing, promoting or importing autos within the U.S. for 5 years upon enactment of the laws.
It is unclear the place the possession language originated or whether or not Mercedes-Benz was inadvertently focused, however Chinese language possession has been a significant concern for U.S. politicians. Final yr, the Trump administration signed off on a deal to maintain social media platform TikTok working within the U.S. by way of the creation of a brand new entity, through which China’s ByteDance retains slightly below 20% possession.
Although BAIC is an organization owned by the Chinese language authorities, the invoice additionally consists of limits on corporations “managed by” a overseas adversary, outlined as a 15% stake by a “individual or mixture of overseas individuals.”
Mercedes-Benz’s second-largest particular person shareholder is Chinese language billionaire Li Shufu, founder and chairman of China-based Geely, by means of his Tenaciou3 Prospect Funding agency. That stake quantities to 9.69% of Mercedes-Benz shares.
Mixed, Shufu and BAIC personal 19.67% of Mercedes-Benz Group AG, the mother or father firm of the automaker in addition to its manufacturers and monetary companies.
Stephen Ezell, a vp for world innovation coverage on the Info Know-how and Innovation Basis, a Washington, D.C., suppose tank centered on industrial competitiveness that has studied Chinese language automakers, mentioned Mercedes-Benz presents a smaller nationwide safety threat than Chinese language-controlled automakers.
“If Mercedes have been to be included within the invoice, I believe it will be an unintended consequence that would consequence within the lack of jobs and earnings,” Ezell mentioned.
A separate piece of just lately launched laws features a related 15% possession stipulation. That invoice, the Related Car Safety Act of 2026, was launched within the Senate by Sens. Bernie Moreno, R-Ohio, and Elissa Slotkin, D-Mich., and within the Home by Reps. John Moolenaar, R-Mich., and Debbie Dingell, D-Mich. However exemptions underneath that laws have but to be decided.
The 15% possession clause, relying on exemptions, might additionally affect different automakers with Chinese language possession, comparable to Volvo and smaller producers like Faraday Future, Lotus and Karma Automotive.
‘Particulars matter’
Mercedes-Benz’s largest U.S. plant is in Tuscaloosa, Alabama. The huge facility has produced greater than 5 million autos because it started manufacturing in 1997, the corporate mentioned Friday. The automaker additionally has produced greater than 450,000 passenger vans at a facility in South Carolina that began manufacturing in 2006, it mentioned.
The German automaker’s lobbying efforts have been minimal in recent times, and bipartisan, based on public data, although it additionally lobbies by means of no less than two commerce associations for automakers to which it belongs.
John Bozzella, CEO of The Alliance for Automotive Innovation, in a letter final week to Guthrie and Vitality and Commerce rating member Rep. Frank Pallone, D-N.J., described the invoice as making “substantial progress on a number of coverage priorities that the auto trade in America shares with members of the committee.”
Bozzella wrote China’s technique to “dominate world automotive manufacturing” poses “a transparent and current hazard to American financial and nationwide safety.”
He mentioned the group, which represents almost each main automaker within the U.S., would proceed working with lawmakers to get the coverage proper, including “particulars matter.”
The lobbying group declined to touch upon the invoice’s potential affect on particular automakers.
Autos Drive America, one other lobbying group for overseas automakers that features Mercedes-Benz, additionally declined to touch upon the potential affect, referring to a previous assertion relating to the Related Car Safety Act about supporting the “general objective of this laws” whereas guaranteeing it “doesn’t result in unintended penalties that would create challenges for U.S. manufacturing.”
The brand new payments are along with beforehand enacted restrictions on the import and sale of linked autos with software program from nations comparable to China beginning with the 2027 mannequin yr in addition to {hardware} from these nations beginning with the 2030 mannequin yr.
Related autos have web entry and wi-fi connectivity with different automobiles or vehicles, expertise that supporters say can improve roadway security.
Volvo, which is majority-owned by Shufu’s Geely, mentioned on Tuesday that it acquired particular authorization from the U.S. authorities to bypass federal bans limiting linked automobile software program and {hardware} linked to China.
Volvo confirmed its particular authorization however didn’t instantly reply to questions concerning the different payments and their potential affect on the corporate.
Volvo Automobiles bought 121,600 autos within the U.S. final yr. Mercedes-Benz bought 303,200 passenger automobiles and 12,400 vans within the nation throughout the identical interval.
