Editor's note: Dr. Wang Peng is a research fellow at the Institute of State Governance (ISG), Huazhong University of Science and Technology (HUST) and the Eurasian Research Institute, Renmin University of China (RUC). The article reflects the author's opinions and not necessarily the views of CGTN.

The U.S. Commerce Department proposes a ban on Chinese software and hardware in connected and autonomous vehicles (CAVs) due to the so-called "national security" concerns. While such measures are not new in Washington's approach to Chinese technology, this latest move represents a dramatic escalation in the ongoing technological and geopolitical rivalry between the two superpowers. A more critical examination suggests that this policy could have far-reaching and unintended consequences for the U.S. economy, innovation, and global leadership in the autonomous vehicle industry.

National security: A valid concern?

U.S. officials argue that Chinese technology integrated into autonomous vehicles could be used for surveillance, data theft, and cyberattacks. CAVs, equipped with advanced sensors, artificial intelligence, and continuous internet connectivity, collect enormous amounts of data. This makes them a potential vector for cyber threats if controlled or influenced by foreign actors hostile to the U.S. interests.

However, while national security is undoubtedly a critical concern, it is important to question the scope and focus of such a ban. Blanket bans on Chinese technology – regardless of the product or the risk profile – may not be the most nuanced or effective approach. Instead of targeting specific companies or technologies that are demonstrably high-risk, the U.S. government risks imposing a broad and unsubstantiated restriction that could lead to economic inefficiencies and stifle competition.

Economic impact on the U.S. automotive industry

One of the most immediate consequences of banning Chinese software and hardware in CAVs would be its impact on the U.S. automotive industry. China is a global leader in the development of autonomous vehicle technology, with companies like Huawei, Baidu, and Tencent investing billions into research and development. 

Chinese manufacturers produce cost-effective hardware components, including sensors, cameras, and processors, which are critical for the mass production of autonomous vehicles. A prohibition would likely increase costs for U.S. automakers, forcing them to source alternatives from non-Chinese suppliers that may be more expensive or less technologically advanced.

Higher costs could slow down the rollout of autonomous vehicles in the U.S., delaying the expected societal benefits such as improved road safety, reduced traffic congestion, and lower emissions. Furthermore, restricting access to Chinese technology could hinder American companies from collaborating with some of the most advanced developers in the world. This not only limits innovation but also risks ceding technological leadership to other nations that embrace global collaboration.

The global supply chain dilemma

Another significant issue with the ban is its potential disruption of global supply chain. The production of autonomous vehicles is highly integrated and globalized. Many components, such as semiconductors, sensors, and software, are manufactured through complex networks that span multiple economies. China plays an indispensable role in these supply chains, and banning Chinese hardware and software would likely have a ripple effect, leading to disruptions, shortages, and delays.

Moreover, disentangling Chinese technology from U.S. supply chains is far from straightforward. Many American companies have deep ties with Chinese suppliers, and implementing such a ban would require substantial time and resources to restructure supply chains. The logistical and financial burden could be immense, potentially leading to reduced competitiveness of U.S. firms in the global market.

Innovation and technological leadership at risk

Beyond the immediate economic impact, the ban could also undermine U.S. leadership in autonomous vehicle technology. The development of CAVs requires cutting-edge innovation in artificial intelligence, machine learning, and cloud computing. Chinese firms have made significant strides in these areas, and their technologies have contributed to the overall advancement of the industry. Barring access to Chinese innovations may limit the technological capabilities of U.S. companies, ultimately slowing down progress in this critical field.

Innovation thrives on competition and cross-border collaboration. The ban risks creating a siloed technological ecosystem in the U.S., cutting off access to new ideas, technologies, and partnerships from one of the most advanced and rapidly growing markets in the world. This could hamper the U.S.' ability to lead in the development and deployment of autonomous vehicles, allowing other countries to surpass American innovation.

Diplomatic and geopolitical consequences

The ban also carries significant diplomatic implications. Banning Chinese technology in CAVs would likely exacerbate tensions and provoke retaliatory measures from Beijing. China could respond with restrictions on U.S. technology companies or limit exports of critical materials, such as rare earth metals, which are essential for the production of advanced technologies like electric and autonomous vehicles.

Further escalating the tech tension with China could also alienate key allies and partners. By adopting such a hardline stance, the U.S. risks isolating itself from its allies and weakening its influence in shaping global standards for emerging technologies like autonomous vehicles.

Conclusion

While national security is a legitimate concern in the development of connected and autonomous vehicles, the ban on Chinese software and hardware is not without significant drawbacks. The policy risks disrupting the U.S. automotive industry, driving up costs, slowing innovation, and straining global supply chains. Furthermore, it could undermine U.S. leadership in autonomous vehicle technology and exacerbate diplomatic tensions with China.

For the United States itself, a more balanced and targeted approach is one that focuses on identifying and mitigating specific risks so that U.S. interests are better served. As China has stressed many times, win-win cooperation is the right way for China and the United States to get along. On the contrary, a crude blanket ban will ultimately only bring about consequences that are harmful to others and self-serving.