Bill targeting China could shut Mercedes-Benz out of US auto market
The bill, strangely enough, would affect the German automaker.
Chloe Mitchell 
New bipartisan legislation winding its way through Congress could unexpectedly slam the brakes on Mercedes-Benz’s operations in the United States. While the bill aims to curb the influence of foreign adversaries like China, Russia, and North Korea, its specific language could place the German automaker in the crosshairs.
The Motor Vehicle Modernization Act
As reported by CNBC, the Motor Vehicle Modernization Act of 2026 seeks to prohibit any automaker with “direct or indirect equity interest by a foreign-adversary government” from manufacturing, selling, or importing vehicles within the U.S. market.
Why Mercedes-Benz is at Risk
The core issue for the manufacturer lies in its ownership structure. The state-owned Chinese automaker BAIC currently serves as the largest individual shareholder of Mercedes-Benz with a 9.98% stake. When combined with the 9.69% share held by Chinese billionaire Li Shufu, these interests account for 19.6% of the company's parent firm, Mercedes-Benz Group AG.
If passed in its current form, the legislation would impose a five-year ban on affected companies from participating in the American automotive market. A representative for Mercedes-Benz declined to comment on the potential impact of the bill.
High Stakes for Alabama
The implications for the American workforce are significant, particularly in Alabama, where approximately 5,800 employees work at the company’s Vance plant. That facility currently exports roughly 60% of its production. Furthermore, Mercedes has deep roots in the U.S. beyond Alabama, having produced over 450,000 passenger vans at its Ladson, S.C. facility since 2006.
Mercedes-Benz has remained aggressive in its expansion efforts. In March, the company announced it would invest an additional $4 billion into its Tuscaloosa County plant over the next four years. Additionally, the firm has set a target to reach 400,000 annual unit sales in the U.S. by 2030.
Legislative Context
The bill is driven by growing anxiety within the industry regarding the rapid pace at which Chinese manufacturers have moved from design to mass production. This concern was highlighted recently by Toyota CEO Koji Sato, who noted, “Unless things change, we will not survive.”
Sponsored by House Energy and Commerce Committee Chairman Brett Guthrie, the Republican-led measure is currently a House-only initiative without a Senate counterpart. While the bill provides certain exemptions for companies operating in the U.S. prior to 2026, those carve-outs explicitly exclude entities with any direct or indirect equity ties to foreign-adversary governments.
