The political battle over China’s car industry is heating up, and Ford just got caught in the crossfire.
Transportation Secretary Sean Duffy sent a scathing letter to Ford CEO Jim Farley this Tuesday, urging him to cut ties with Chinese companies. Duffy expressed “profound concern” at Ford’s strategic direction, and said he was “deeply alarmed” by the automaker’s licensing deal with CATL to make lithium iron phosphate batteries in Michigan.
“When a company intentionally chooses to deepen operational dependencies on strategic competitors, it fails to act as the reliable partner the American public and this DOT require,” the letter reads. Brutal stuff.
Clearly, even American companies aren’t safe from the growing backlash to China’s auto industry. But the Ford spat also exposes just how scattered America’s China-car policy is becoming. Washington seems certain that it wants to disentangle the U.S. auto industry from China—and less sure what that actually means.
[We discuss the Ford situation, Mack's first drive in the Jeep Recon, the Tesla Cybercab hitting streets, and more on this week's Plugged-In Podcast. Check it out!]
It’s not obvious why Ford, of all the Detroit automakers, got singled out. General Motors uses Chinese batteries in the Chevy Bolt. Stellantis (which is only part American, but still) owns part of Leapmotor and distributes that company’s cars abroad. Slate (small potatoes, to be sure) is using LFP batteries produced in the U.S. by China’s Gotion.
Notably, Duffy doesn’t accuse Ford of breaking any laws, so it’s even less clear why the administration is lashing out at it specifically.
Ford seemed completely blindsided by this, and it clapped back hard. The company slammed Duffy’s letter as a “wrongheaded attempt to capture headlines” and posted a lengthy response on its website. Farley gave an interview to The Wall Street Journal to correct the record.
On the one hand, it has seemed like “we don’t want Chinese cars” is a rallying cry both sides of the aisle can get behind—a rarity these days. The U.S. already has 100% tariffs on Chinese vehicles and a ban on certain Chinese tech. Both were established in the Biden years. A Senate committee recently advanced an even stricter bill that would bar auto companies that have more than 15% Chinese ownership from selling in America. Another proposal would keep Chinese cars from crossing the Mexican or Canadian borders into America, even if they were sold legally in those countries.
At the same time, the anti-China effort at the federal level comes off as increasingly unpredictable. Just days ago, the White House praised the very same battery plant in Michigan that Duffy’s letter blasted. After this controversy blew up this week, the White House’s rapid response X account posted that Ford “is a GREAT American company and has done a tremendous job on increasing investments domestically and shoring production back to the U.S.” So which is it?
Likewise, Geely-controlled Polestar was kicked out of the U.S. market this year due to its Chinese tech, while Geely-controlled Volvo managed to stick around. (The Volvo EX90 and Polestar 3 even share a platform and are built at the same facility in South Carolina.) Polestar still has no idea what happened. On top of it all, Senator Elissa Slotkin posted on X this week that she heard a rumor that President Trump plans to open the U.S. to Chinese cars within weeks.
It’s not even clear that prohibiting U.S. automakers from dealing with China is the right move. There’s a solid argument that it isn’t. After all, China’s auto companies learned from American and European ones through joint ventures, then leapfrogged the world. Now Chinese manufacturers set the bar in terms of development speed, in-vehicle technology, and battery production.
Duffy says the goal is to “out-innovate competitors.” But based on how far ahead China is right now, that may not be possible on American gumption alone.
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