The White House thinks Ford has gone soft on Beijing. But CEO Jim Farley believes that Chinese players are ahead of the game and that you need to join them cause you can’t beat them. The paradox keeps Ford in a tight space.
US Transport Secretary Sean Duffy fired off a letter this week demanding that Ford abandon its licensing deal with Chinese battery leader CATL. According to him, the partnership is a threat to American industrial security.
Global benchmark
Trump officials want Ford to cut Chinese ties, and they want it rather sooner than later. Underneath lies an uncomfortable truth: if Ford wants to remain relevant on the global playfield, it needs at least to learn from the Chinese competition.
Farley knows this, probably as no other CEO in the American auto industry. He has spent years arguing that Chinese automakers have set the new global benchmark for cost, speed, software and manufacturing. He drove a Xiaomi SU7 for half a year, and couldn’t stop raving about it.
His solution might be more clever than the White House gives him credit for. He is not to looking to surrender to Beijing, Farley wants to learn while keeping them out of the US market. But Trump’s administration is now signalling that even such a carefully constructed compromise is politically toxic. A few months ago Farley called BYD the best in the business across cost, supply chain and intellectual property. His benchmark is no longer Tesla. It is the Chinese ecosystem.
List of partnerships
Ford has an agreement with Chinese battery leader CATL to build at BlueOval Battery Park in Michigan. For Duff this deal is one of many unallowed tie-ups on his list. But the CATL arrangement is a license, not a joint venture. Ford owns the plant, employs the workers and controls production. It has paid for the chemistry and manufacturing expertise, with CATL providing training and technical support.
This response from Farley on Chinese technological leadership is both strategic as it is ironic. Bringing the technical knowhow inside the tent through right-sized partnerships is precisely how China built its car industry from scratch twenty years ago
“In China, for the world”
But CATL is only one thread in a broader Chinese tapestry. Ford’s own Chinese operations exported more than 180,000 vehicles last year under a strategy it openly calls “In China, for the world.” The China-market Bronco New Energy was co-developed with Jiangling Motors and uses BYD batteries.
So, Ford is using Chinese production to feed global markets. The glaring exception is the Lincoln Nautilus, which the brand still builds in China for American buyers despite tariffs of roughly 52.5%. To sweeten that pill for the White House, Ford has promised to reshore some Lincoln production by 2030, despite being the carmaker with the highest American production footprint of all.
Then there’s Geely in Europe. Ford is creating a manufacturing joint venture with the brand at its Valencia plant in Spain. From 2028 that factory is scheduled to produce existing Ford models, a new Bronco-family vehicle, a jointly developed Ford crossover, and two Geely electric SUVs. Ford wants Chinese methods to make its European division competitive again. But what happens in Europe, stays in Europe?
Competitiveness doesn’t come from tariffs
That seems to be the case. As for that home market, Farley remains cautious and keeps arguing that Chinese imports should not be allowed into the U.S. because subsidies, excess capacity and cybersecurity risks make it an unfair fight.
Ford is also part of the Alliance for Automotive Innovation, which recently urged Congress to make the ban on Chinese connected vehicles permanent. All these moves must help create breathing room for the brand to catch up.
The dilemma obviously centers around political ideology versus market reality. Ford knows that a tariff wall isn’t a recipe for becoming globally competitive. According to Farley the Chinese will land in the U.S. eventually, no matter how long today’s tariffs are kept alive.
