Over the past two years, China and the U.S. have been fully engaged in a trade war as a result of tariffs imposed by President Donald Trump claiming unfair trade practices. This had led to rising tensions between the two countries and countless tariffs on goods and products worth billions of dollars. While a trade deal seemed promising earlier this year, conversations between the two have since been paused.

Although the current progress between the U.S. and China seems to be optimistic, as President-elect Joe Biden transitions into office, it is unknown how he will approach the U.S.' eastern rival and if he'll be able to mend relations or if they'll only worsen.

Biden says he'll be tough on China, and we can expect the relationship to have a significant impact on various industries, in particular, the automotive industry as it pertains to the development of autonomous vehicles (AV). The U.S. has shown that it can be a leader in the AV space, but Biden's relationship with China will be critical to ensure that the U.S. remains at the head of the pack. 

Regulating the AV industry

The U.S.' first attempt at building the framework to regulate the AV industry came in 2017 when the U.S. House of Representatives passed the Self Drive Act, aimed at setting standards for development and performance of AVs in an attempt to mitigate safety concerns, only to come to a standstill in the U.S. Senate.

In order to move regulations forward, President-elect Biden will need to work closely with Republicans in the Senate should the January runoff races not favor the Democrats. Biden has a proven track record of getting along and working in tandem with Republicans, especially Senate Majority Leader Mitch McConnell, which could play a significant role in laying the groundwork for the AV industry and the future implementation of the regulation.

Recently, major automakers proposed a set of policies that will make it easier to roll out AVs on a large scale in the coming years. Should these policies be approved, companies who have invested heavily in this technology will have a clear vision of future plans for building and deploying. Uncertainty on these policies will lead companies to pull back their investment efforts, ultimately hindering the industry from future dominance and success.

President-elect Joe Biden is to be sworn in on January 20, 2021 Former Vice President Joseph R. Biden won the 2020 U.S. election against Republican President Donald J. Trump, who was running for his second term at the White House. President-elect Biden is now scheduled to be inaugurated on Jan. 20, 2021, in Washington, D.C. Photo: GETTY IMAGES / ALEX WONG

One policy in particular references the safety standards of AVs. Automakers want AVs to be classified separately from other vehicles to accelerate the process of a mass rollout. Safety standards already differ for each vehicle type but currently, AVs are grouped in with those requiring the presence of a human driver. By putting AVs in their own category, achieving a mass rollout becomes increasingly attainable as safety standards can be personalized specifically for AVs.

Additionally, AV advancements and the continued efforts to regulate will help Biden's aggressive net-zero carbon emission goals, as all fully developed AVs will be fully electronic. With a proposed $1.7 trillion climate change plan, Biden has made his vision clear about the need to invest in carbon emission solutions. 

Losing access to the Chinese market

U.S. advanced driver-assisted systems (ADAS) makers have their eye on the Chinese market as it has been reported that consumers are more optimistic and open to driverless vehicles in China compared to the U.S. However, as the U.S. shifts focus to markets away from China due to worsening relations, the emphasis now lies in assuring driverless vehicle safety to the American public.

Furthermore, the ongoing pandemic has provided even more opportunity to establish the importance of driverless vehicles by offering a safer alternative, health-wise, in the form of robocars which are computer-controlled vehicles that don't require human control or intervention. China has demonstrated that its testing has been successful and proven safe by rolling out robocars in the form of robotaxis to an exclusive group of people. In today's world where a pandemic has caused concern for interacting with others, robotaxis allow people a transportation method that avoids coming in close contact with others.

While losing access to the Chinese market will hinder the U.S., it should be noted that China will also lose valuable investment opportunities within the U.S. market. No one country is going to single-handedly advance AVs to where we will see mass rollout. Should China and the U.S. continue to isolate from one another, it will prove to be a significant detriment to the entire industry. 

Ideal infrastructure for AV development

China's infrastructure is well developed to quickly adapt to the implementation of AVs with its strong focus on 5G and smart cities, something the U.S. has been slow to address. This has allowed the country to position itself ahead of the U.S. in terms of rolling out ADAS vehicles, especially with an emphasis on integrating a 5G transportation grid for vehicles to utilize, offering a more standard approach.

However, what favors the U.S. in these circumstances is its access to a variety of potential test sites, opening the door for automakers globally to test and fine tune driverless vehicles.  We've already seen a handful of automakers testing AVs in states such as California and Arizona, competing for the first full integration. Should the U.S. stay on this path with the increased support of the Biden administration, the country will be well positioned to take command of the global automotive industry.

It is without a doubt that the ongoing trade war with China poses an imminent threat to the future of the U.S. and the automotive industry. Biden has made it clear what his intentions are in regard to fostering the growth of the economy and stimulating the industry. How we get there is still yet to be determined. In order for the automotive industry to succeed and ultimately claim victory regulating AVs, overcoming lost Chinese market opportunities and the adaption of integrated infrastructure are a must.

(Pär-Olof Johannesson is the CEO of Terranet, a Swedish company designing breakthrough, event-based sensors for AVs)