STOP China Act Bans Federal Funds for Transit Vehicles Tied to Foreign Entities: Watchlist Starts in 30 Days

The new Safeguarding Transit Operations to Prohibit China Act, or the STOP China Act, is throwing a massive wrench into how cities and transit agencies buy buses, trains, and even the charging stations to power them. Simply put, this bill says federal taxpayer money—the "covered funding" that keeps your local bus system running—cannot be used to buy vehicles or related infrastructure from companies linked to the People’s Republic of China (PRC).

The New Rules of the Road

Starting the day this bill becomes law, if your local transit authority signs a contract for a new bus or train car, they can’t use federal cash if that vehicle or its electric powertrain comes from a “Covered Entity.” This is where the bill gets sweeping. A “Covered Entity” isn’t just a company based in the PRC; it’s any company headquartered there, organized under their laws, or even one that is indirectly owned or controlled by the PRC through ownership stakes, board seats, or contracts (SEC. 3). Basically, if you take federal money for transit, you’re now facing a significantly smaller pool of approved suppliers.

Meet the New Watchlist

To make sure everyone is on the same page, the bill mandates a public list. Within 30 days of enactment, the U.S. Trade Representative (USTR), working with the Attorney General and the Secretary of Transportation, has to post a public “watchlist” naming all the companies that fall under this ban. They have to keep this list current, updating it every 90 days for the first six months, and then annually (SEC. 3 & SEC. 4). This means that transit agencies will need to constantly check this list before issuing a bid, adding a new layer of administrative complexity to every major purchase.

What This Means for Your Commute and Your Wallet

This legislation is aimed squarely at national security and boosting U.S. manufacturing, but there are real-world trade-offs for everyday riders. For the transit agencies that keep our cities moving, this means fewer options. If the foreign-supplied vehicles were cheaper, more readily available, or offered specific technology, those options are now off the table. This restriction on competition could lead to higher procurement costs for cities, which eventually impacts the taxpayer and potentially the rider through fare hikes or reduced service expansion.

Consider a city trying to rapidly electrify its bus fleet. If the most cost-effective or highest-performing electric powertrain manufacturers are deemed “Covered Entities” under the bill’s broad definitions, the city must switch to a potentially more expensive or less available domestic supplier. This is the bill’s intended effect—to support domestic supply chains—but the immediate impact is a higher price tag and potential delays in getting those new, quieter, zero-emission buses on the road.

The Fine Print and the Potential Pitfalls

While the bill allows exceptions for safety testing and honors contracts signed before the law takes effect, the core prohibition is firm. The biggest challenge lies in the broad language defining a “Covered Entity.” Because the bill targets companies that are even indirectly controlled or financed by the PRC, the USTR is handed significant power to decide who is in and who is out. This level of regulatory discretion, combined with the required frequent updates to the watchlist, creates uncertainty for global manufacturers and transit agencies alike (SEC. 3). For the average person, this legislation is a clear signal that the cost of public transit is now tied directly to the government’s strategy for economic competition, and that strategy prioritizes security and domestic industry over minimizing immediate procurement costs.