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IFANS PERSPECTIVES U.S. Regulation on Connected Vehicles: Reconfiguring Supply Chains and Global Challenges EOM Doyoung Upload Date 2025-01-24 Hits 25905
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1. Introduction   
2. Assessment of the Regulation on Connected Vehicles
3. Prospects of the Second Trump Administration
4. Challenges for Trading Partners and Their Supply Chains
5. Policy Recommendations

1. Introduction   
 
The U.S. has been broadening its efforts to counter China not only through import and export controls on specific goods but also by imposing restrictions on data transactions and the provision of digital services. Several data-related regulations effectively targeting China have been introduced to prevent sensitive U.S. data from being accessed by entities controlled by foreign adversaries, thereby addressing national security risks. Expanding these efforts further, the U.S. has increasingly targeted transactions involving Information and Communications Technology or Services (ICTS). ICTS, as defined in relevant U.S. regulations, refers to hardware, software, or other products or services that primarily perform or enable the processing, storage, retrieval, or communication of data through electronic means. Regulating ICTS transactions traces its origins to E.O. 13873, “Securing the Information and Communications Technology and Services Supply Chain”, issued during the first Trump administration. This established the foundation for addressing ICTS transactions with foreign adversaries on national security grounds. Before the end of his term, an Interim Final Rule was issued on January 19, 2021, to implement the Executive Order.
Connected vehicles have emerged as a prominent example within this broader regulatory framework. Connected vehicles use various communication methods (e.g., Wi-Fi, Bluetooth, cellular, satellite) to interact with surrounding vehicles and infrastructure and can connect to the cloud, enabling the collection, storage, processing, and transmission of data. The Notice of Proposed Rulemaking (NPRM) entitled “Securing the Information and Communications Technology and Services Supply Chain: Connected Vehicles” applies the provisions of E.O. 13873 specifically to connected vehicles. This rulemaking was initiated under the Biden administration in February 2024, following the President’s directive for the Department of Commerce to investigate the national security risks posed by connected vehicles that rely on technologies from foreign adversaries, including China. In the NPRM issued on September 26, 2024, foreign adversaries, particularly China and Russia, were highlighted for their ability to compel automakers, parts suppliers, and service providers under their jurisdiction to cooperate, enabling access to vehicles operating in the U.S. through components including software. This situation raised concerns in the U.S. about the unauthorized collection and leakage of sensitive data and the potential for remote manipulation of vehicle functions. On January 14, 2025, the final rule was issued by the Department of Commerce with minor changes.
Various restrictions have been imposed on Chinese vehicles entering the U.S. market,  with a primary focus on tariff measures. For instance, in September 2024, the United States Trade Representative (USTR) finalized tariff increases under Section 301, raising the rate on electric vehicles (EVs) from 25% to 100% and on lithium-ion EV batteries from 7.5% to 25%. During the first Trump administration, a 25% tariff was imposed on Chinese cars in addition to the existing 2.5% rate. Meanwhile, the rule on connected vehicles addressing cyber threats to data, passengers, vehicles, and the infrastructure represents an effort to restrict the influence of Chinese vehicles through regulatory means beyond tariffs, making it an area worth closer examination. On his inauguration day, as part of the “America First Trade Policy”, President Trump ordered a review of the rulemaking on connected vehicles and addressed the need to consider expanding controls on ICTS transactions to account for a broader range of connected products. This suggests that administrative discussions on connected vehicles will continue.
This article examines recent developments in the U.S., including those during the Biden administration, the election and the post-election periods, and the initial days of the new administration, as well as developments in other major countries with respect to the regulation on connected vehicles. It assesses key aspects of U.S. regulations and explores challenges faced by trading partners and companies entering the U.S. market to derive implications for South Korea.

*Attached File #US #CyberSecurity #National #Connected #Vehicles
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IFANS PERSPECTIVES 2025-02E(엄도영).pdf
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