The Commerce Department said Friday that new rules proposed to ban Chinese connected vehicles and key Chinese software and vehicle hardware in American cars could cut U.S. auto sales by up to 25,841 vehicles per year and raise prices.

U.S. automakers and others selling in the United States "may be less competitive in the global market because of the relatively higher prices of their vehicles," the department said. It said the regulation "could have noticeable effects on vehicle prices" and estimated between 1,680 and 25,841 fewer vehicles would be sold annually because of the rule.

The department also estimated the rule could impact $1.5 billion to $2.3 billion in vehicle inputs from Chinese or Russian companies for vehicles sold in the United States.