The US government has warned an Italian high-end tire manufacturer that its products may face a ban in the US due to Chinese investment and control. According to a report by Bloomberg on Tuesday (May 27), the US Department of Commerce has formally notified Italian tire maker Pirelli that, because a portion of its shares is held by a central Chinese state-owned enterprise, regulatory authorities will restrict the sale of new Pirelli products such as smart tires in the US.
It has been revealed that the Chinese state-owned enterprise Sinochem, through its subsidiary China National Chemical Corporation, owns 37% of Pirelli’s shares.
The report stated that on April 25, the Bureau of Industry and Security of the US Department of Commerce wrote to Pirelli, indicating that its new generation tire products, integrating data processing software known as “Cyber Tyre”, may violate US regulations prohibiting the sale of software and hardware controlled by China in the US, thus these products might be banned from sale.
As a global high-end tire manufacturer, Pirelli’s business includes supplying tires for supercar brands such as Ferrari and Lamborghini, as well as specialized F1 racing tires, holding a significant market position.
As early as 2015, the ChemChina Group acquired a controlling stake in Pirelli for 7.7 billion euros, becoming its largest shareholder. However, in recent years, the disagreements between the Chinese and Italian shareholders of Pirelli in corporate governance have become increasingly evident and severe.
In 2023, citing national security reasons, the Italian government invoked the “Golden Powers Act” and forcibly restricted the rights of ChemChina Group as a shareholder, including prohibiting the appointment of a CEO, restricting access to sensitive data and technology, and reducing board seats. The ChemChina Group expressed “shock and opposition” to this but ultimately was unable to reverse the decision.
In 2025, the US issued a ban on automotive software and hardware produced by Chinese-owned companies, with plans to ban Chinese software in 2027 and Chinese hardware in 2029.
Currently, about a quarter of Pirelli’s global revenue comes from the US market. There is significant demand for its latest data-transmitting smart tires in the US. Although the company also operates a smaller factory in Georgia, USA, its products are mainly supplied to the US market through factories in Mexico, South America, and Europe.
At a board meeting in March this year, Pirelli’s management formally requested ChemChina Group to reduce its current 37% stake to a level lower than the 26.4% held by Italian shareholder Camfin.
On April 28, Pirelli’s board of directors announced that the largest shareholder, the Chinese state-owned enterprise ChemChina Group, no longer has control over Pirelli, and shareholders will continue discussions on the company’s governance and arrangements.
This effort demonstrates that in the face of the tariffs imposed by the Trump administration, Pirelli is attempting to weaken Chinese influence and convey a signal of being “independent from Chinese capital” to Washington in order to avoid potential sanctions.