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Senate Commerce Committee Advances Controversial Bill

On Wednesday, the Senate Commerce Committee moved forward with a bipartisan initiative aimed at imposing stricter regulations on Chinese automotive companies entering the U.S. market. However, an unexpected twist emerged: the current wording of the bill could inadvertently prevent Mercedes-Benz from selling its vehicles in the United States. During the markup session for the Motor Vehicle Modernization Act of 2026, Committee Chairman Ted Cruz, a Republican from Texas, highlighted this issue. He noted that the legislation establishes a 15 percent threshold for Chinese ownership, which affects Mercedes-Benz due to two Chinese investors collectively owning nearly 20 percent of the company's shares.

Cruz clarified that this was not the intended consequence, emphasizing that lawmakers would not want to ban Mercedes-Benz. He indicated that revisions to the bill would be necessary before it could realistically be enacted.

As reported by CNBC, the two largest shareholders in Mercedes-Benz are BAIC, a state-owned Chinese automaker previously known as Beijing Automotive Industrial Corp, which holds a 9.98 percent stake, and Li Shufu, the founder of Geely, who owns 9.69 percent.

Objectives of the Legislation

The primary aim of this legislation is to convert existing federal restrictions into permanent law, with the goal of preventing Chinese-linked vehicle technology from infiltrating American automobiles. The underlying concern is national security, particularly the fear that connected vehicles might be exploited to gather sensitive information.

Senator Bernie Moreno, a Republican from Ohio who co-sponsored the bill with Michigan Democrat Elissa Slotkin, expressed the urgency of the situation during the markup. He described the legislation as a necessary measure to avert what he termed the complete dismantling of the nation's industrial base.

Mercedes-Benz's Response and Compliance Timeline

While Mercedes-Benz has not issued a direct statement regarding the bill, the company has highlighted its significant presence in the U.S., employing over 10,000 individuals and operating assembly plants in Alabama and South Carolina. During the markup, Moreno addressed the situation concerning Mercedes-Benz, stating that the automaker would have until 2030 to adjust its ownership structure to meet the new requirements, and it could also seek a waiver.

Tensions with General Motors

The markup session also featured a heated exchange when Cruz shifted his focus to General Motors. He accused the automaker of supporting the ownership provision as a strategy to eliminate Mercedes-Benz from the U.S. market, thereby giving Cadillac a competitive advantage. Cruz asserted that he believes GM is advocating for this provision to effectively push Mercedes-Benz out of the market.