Proposed ban on Chinese railcars gets White House support

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Chinese manufacturer CRRC displays models of its various types of rail equipment at InnoTrans in 2016. The White House says it supports a ban on purchases of transit equipment by Chinese manufacturers.
TRAINS: David Lassen

WASHINGTON — Bipartisan legislation that would prohibit the use of federal funds to buy transit vehicles from state-owned Chinese manufacturers appears closer to passing after the White House voiced its support in a letter to Congress.

Both the House and Senate attached similar amendments to the annual defense authorization bill, which must be enacted by Oct. 1, 2019. They differ only in that the House version applies strictly to rail vehicles while the Senate version also includes buses.

“It is critical that such prohibitions cover procurement of all rolling stock transit vehicles to ensure the Nation’s economic and national security and to prevent the use of Federal dollars to support foreign state-controlled enterprises,” states the letter from Russell Vought, acting director of the Office of Management and Budget, endorsing the Senate’s broader language.

The key target of the legislation is Chinese railcar maker CRRC Corp. [See Railcar manufacturer CRRC a target in U.S.-China trade war,” Trains News Wire, June 25, 2019], which currently has contracts with the Massachusetts Bay Transportation Authority, the Southeastern Pennsylvania Transportation Authority, the Chicago Transit Authority and LA Metro. Those contracts would be grandfathered in.

Of greater concern to those transit agencies is the continuing viability of CRRC to maintain its business in the United States, says the MBTA’s general manager, Steve Poftak. [See “MBTA chief discusses challenges, progress,” Trains News Wire, July 30, 2019]. Warranty issues, future upgrades or other continuing needs could be compromised if the company left the U.S.

Steelworkers, the steel industry, freight car manufacturers and the Alliance for American Manufacturing have spent heavily to lobby Congress for the ban.

In passing the Senate bill, Sen. John Cornyn said, “China poses a clear and present danger to our national security and has already infiltrated our rail and bus manufacturing industries.”

CRRC manufactures railcars, starting from steel shells imported from China, at plants in Chicago and Springfield, Massachusetts. Marina Popovic, legal counsel for CRRC Sifang America, the company’s Chicago subsidiary, tells Trains that “it takes very seriously the fact that it needs to be in the United States to be a U.S. manufacturer.”

The legislation also requires transit agencies to develop cybersecurity plans and identify hardware and software that should be tested by an independent third party.

A House-Senate conference committee will meet soon to finalize the appropriations bill before sending it to the president for his signature

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