Bill targeting China could shut Mercedes-Benz out of US auto market

New bipartisan legislation winding its way through the U.S. Congress is aimed at curbing foreign influence, but it could unexpectedly leave Mercedes-Benz on the outside looking in at the American auto market.

The Motor Vehicle Modernization Act

As reported by CNBC, the Motor Vehicle Modernization Act of 2026 seeks to restrict automakers tied to foreign adversaries. The legislation proposes a five-year ban on manufacturing, selling, or importing vehicles in the United States for any company featuring direct or indirect equity interest from governments defined as foreign adversaries, specifically naming China, Russia, and North Korea.

The Mercedes-Benz Ownership Hurdle

The bill presents a significant challenge for Mercedes-Benz due to its current ownership structure. The German automaker’s largest individual shareholder is the Chinese state-owned firm BAIC, which holds a 9.98% stake. When combined with the 9.69% share held by Chinese billionaire Li Shufu, nearly 20% of the Mercedes-Benz Group AG is under Chinese interest.

While the legislation includes potential exemptions for companies that have manufactured vehicles in the U.S. for at least five years as of January 1, 2026, the current language explicitly excludes firms holding interest from foreign-adversary governments. A Mercedes-Benz representative declined to comment on the matter.

Impact on Alabama and Beyond

The implications for Mercedes-Benz’s U.S. footprint are massive. The company employs roughly 5,800 workers at its Vance facility, which currently exports approximately 60 percent of its production. Additionally, the brand has been a fixture in South Carolina, producing more than 450,000 passenger vans at its Ladson plant since 2006.

205focus.com has previously covered the automaker's massive local commitment, including a planned $4 billion investment in its Tuscaloosa County plant over the next four years. Mercedes-Benz has also publicly stated an ambitious target to sell 400,000 units annually in the U.S. by 2030.

Industry Pressure

The legislation, sponsored by House Energy and Commerce Committee Chairman Brett Guthrie (R-Ky.), reflects growing anxiety among domestic manufacturers. Leaders like Toyota CEO Koji Sato have warned that the rapid rise of Chinese automakers poses an existential threat to the industry. Currently, the bill is limited to the House, with no companion legislation in the Senate.