Mercedes-Benz could be blocked from making, importing or selling new vehicles in the US under draft congressional legislation aimed at limiting Chinese-linked ownership in the auto industry, reported CNBC.

The bill, titled the Motor Vehicle Modernization Act of 2026, was introduced by House Energy and Commerce Committee chair Brett Guthrie, a Republican from Kentucky.

It would bar any automaker with “any direct or indirect equity interest by a foreign-adversary government” from manufacturing vehicles for sale in the US, importing them or selling them in the market for five years.

That language could capture Mercedes-Benz because BAIC, the Chinese state-owned automaker, holds a 9.98% stake in the German company, making it its largest single shareholder.

People familiar with the draft told CNBC the wording leaves room for interpretation, but two sources said they believe Mercedes-Benz would be covered if the bill passes in its current form.

“The language is unambiguous,” a former automotive policy adviser and lobbyist consulted on the bill told the outlet.

Daniel Kelly, press secretary for the Energy and Commerce Committee, confirmed the contents of the proposal but did not comment on its effect on individual companies, including Mercedes-Benz.

Mercedes-Benz declined to comment on the legislation.

A company spokesperson said on Friday that Mercedes-Benz operates two major vehicle assembly plants in the US and employs more than 10,000 people in the country.

The proposed measure reflects broader bipartisan efforts in Washington to curb Chinese influence in the US automotive market.

While the bill includes exemptions for some companies with Chinese backing, those carveouts would not apply to any manufacturer with direct or indirect ownership by the government of a designated foreign adversary.

China, Russia and North Korea are listed in that category.

The draft also defines companies as “controlled by” a foreign adversary if a “person or combination of foreign persons” holds 15%.

In addition to BAIC’s stake, Mercedes-Benz’s second-largest individual shareholder is Li Shufu, Geely’s founder, whose Tenaciou3 Prospect Investment firm owns 9.69%.

Combined, BAIC and Li hold 19.67% of Mercedes-Benz Group.

Mercedes-Benz’s largest US manufacturing operation is in Tuscaloosa, Alabama, where it said more than five million vehicles have been built since 1997.

It has also produced more than 450,000 passenger vans at its South Carolina plant since 2006.