A U.S. Senate committee advanced legislation aimed at strengthening restrictions on Chinese automakers, as Chairman Ted Cruz, R-Texas, warned that the bipartisan measure could unintentionally prevent Mercedes-Benz from selling vehicles in the United States.
During the committee’s markup of the Motor Vehicle Modernization Act of 2026, Cruz said the bill’s 15% Chinese ownership threshold could apply to Mercedes-Benz because two Chinese investors collectively own nearly 20% of the company’s shares.
“We would never consider” banning Mercedes-Benz, Cruz said, adding that the bill would need to be changed before becoming law.
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The bill was intended to codify federal restrictions aimed at keeping Chinese-linked vehicle technology out of the United States, citing national security concerns that connected cars could collect sensitive data.
“We’re preventing an absolute, total, and complete destruction of our industrial base,” said Sen. Bernie Moreno, R-Ohio, who introduced the bill with Sen. Elissa Slotkin, D-Mich.
The bill has drawn support from General Motors, the United Auto Workers, and the CAR Coalition. UAW President Shawn Fain said the legislation “puts common sense guardrails on a major threat to our nation’s auto industry” in a statement.
The U.S. government has already moved to restrict Chinese-affiliated automakers. Polestar, majority-owned by China’s Geely Holding, was forced to stop selling new vehicles in the U.S. after the Commerce Department denied its authorization request under the existing Connected Vehicle Rule. Volvo, a Geely sister brand, was granted authorization roughly a month before Polestar’s request was denied.
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Mercedes-Benz’s two largest individual shareholders are Chinese state-owned automaker BAIC, formerly the Beijing Automotive Industrial Corp., with a 9.98% stake, and Geely founder Li Shufu, with 9.69%. Moreno said that Mercedes-Benz would have until 2030 to comply with the ownership limit and could seek a waiver.
During the markup, Cruz accused General Motors of supporting the provision in an effort to weaken Mercedes-Benz and make Cadillac more competitive.
“GM is pushing for this provision to get Mercedes-Benz out of the market,” Cruz said. Mercedes-Benz employs more than 11,000 people across U.S. facilities, including a large assembly plant in Tuscaloosa, Alabama, that has produced more than 4.5 million vehicles since opening in 1997. The automaker has said it backed rules “designed to protect U.S. national security” but “remains committed to ensuring that any legislation does not impact our operations.”