WASHINGTON, D.C. – This week, U.S. Senators John Cornyn (R-TX), Tammy Baldwin (D-WI), Mike Crapo (R-ID), and Sherrod Brown (D-OH) secured an amendment in the National Defense Authorization Act (NDAA), which would prevent federal funds from being used by transit agencies to purchase rail cars or buses manufactured by Chinese state-owned, controlled, or subsidized companies. The Senators introduced the bipartisan Transit Infrastructure Vehicle Security Act in March, and the amendment in the NDAA is based on the Senators’ bill. The NDAA is currently being considered on the Senate floor.
“China’s ‘Made in 2025’ initiative and their weaponization of foreign investment are clearly targeting our critical infrastructure, posing a grave threat to our national security,” Sen. Cornyn said. “This bipartisan effort to help safeguard our transportation and infrastructure sectors from exploitation is vital, and I’m grateful to my colleagues for joining me in this effort to include this important provision in the defense bill.”
“China has made clear its intent to dismantle U.S. railcar and bus manufacturing in its ‘Made in China 2025’ plan—our economic and national security demands that we address Chinese attempts to dominate industries that build our nation’s critical infrastructure,” said Sen. Baldwin. “That’s why I’m working with my colleagues on both sides of the aisle to hold China accountable because we need to do all we can to support American workers and American-made products.”
“This legislation will curb Chinese efforts to undermine economic competitiveness and displace bus and rail public transportation manufacturers in the United States,” said Sen. Crapo. “The bill will require rail transit agencies to evaluate their cybersecurity risks and develop a plan to mitigate those risks, which is critical given the increasing complexity and technological advances in rail transportation.”
“This strong bipartisan bill protects federal dollars from being spent on Chinese buses and railcars, and improves cybersecurity in public transportation,” said Sen. Brown. “Federal dollars should not support Chinese state-controlled enterprises that want to undermine U.S. manufacturers and overtake our supply chain that supports rail and bus manufacturing.”
The Chinese government continues to use a range of state subsidies and predatory practices to support its market ascension in certain sectors of the United States’ economy. Two of these sectors, rail manufacturing and bus manufacturing, are included as part of China’s “Made in China 2025” initiative, a plan targeting global dominance in areas that the Chinese government considers most strategic to its global aims.
Chinese state-owned and state-supported enterprises have used subsidized “bargain prices” well-below competitive market price to win contracts throughout the United States. A number of large, metropolitan areas have recently awarded rail rolling stock procurements to a Chinese state-owned enterprise. There are a number of threats these procurements pose including impeding economic competitiveness and overtaking the supply chains that support United States public transportation agencies. Chinese state-owned and state-supported enterprises have increased security vulnerabilities and create new risks for rolling stock procurements.
Specifically, the Senators’ amendment would prevent federal transit funds from being used by transit agencies to procure Chinese rail assets and ensure transit agencies develop and execute a cybersecurity plan.
- Limitation on Certain Rolling Stock Procurements: This legislation prevents federal transit dollars from being used to award a contract or subcontract for the procurement of passenger rail cars or transit buses to Chinese state-owned, controlled or subsidized enterprises. The bill would create a certification process for transit agencies to ensure their funds are not being used to purchase rolling stock from a covered manufacturer. A narrow exception would be made for transportation agencies with a pre-existing contract or subcontract with a covered rail rolling stock manufacturer executed prior to the date of enactment.
- Cybersecurity Certification: Given the level of technology and growing complexity of rail rolling stock assets, it is important that proper cybersecurity standards are in place. This legislation would require any transit operator that operates rail transit service to develop and execute a plan for identifying and reducing cybersecurity risks. Recipients of federal transit assistance would be required to review best practices and to identify any hardware and software components of new rolling stock assets that should undergo third-party testing.