Washington warns Ford to cut China ties

Ford has been told to back away from China by the Trump administration, days after Ford Australia confirmed its first two Chinese-built models for local showrooms. US Transportation Secretary Sean Duffy wrote to Ford CEO Jim Farley expressing "profound concern" that a foundational American brand is "intertwining its future with Chinese state-backed enterprises".

The US Department of Transportation published a letter it sent to Ford’s global boss, Jim Farley, to dial back its collaborations with Chinese car-makers.

Ford's tie-up with Geely will fill the barely-used Valencia factory from 2028, which Duffy reckons "helps strategic adversaries secure a vital foothold in Western markets".

Ford's counter is simple enough – it owns the Michigan battery plant, controls it and employs the workers, while rivals just import Chinese cells.

It lands as the US Congress moves to tighten its ban on Chinese vehicles in the United States, where Chinese brands already face a 100 per cent tariff and have no meaningful sales presence – a world away from the free-for-all in Australian showrooms.

Canada, meanwhile, has gone the other way entirely, cutting its own 100 per cent surtax to 6.1 per cent from March and waving through up to 49,000 Chinese-built EVs a year.

This has Washington twitchy enough that Michigan lawmakers have proposed banning 'Chinese connected vehicles' from crossing the border at all – even on day trips.

Closer to home, the news comes hot on the heels of Ford Australia’s announcement that it will introduce two Chinese-made vehicles in Australia in the coming months, including the Bronco hybrid SUV, both built in Nanchang by the Ford-Jiangling Motors (JMC) joint venture that has existed since the mid 1990s.

Ford is not the only brand seeking technical alliances with Chinese car-makers, either. In Australia, Mazda's 6e is a product of its Changan joint venture, Kia's EV5 is built in China, and Hyundai's Elexio comes out of the Beijing Hyundai venture – all three sold right here.

The top selling car in Australia last month was also built in China, the Tesla Model Y. The Toyota RAV4 was second placed and is built in Japan.

Right now, Aussie consumers are buying more new cars built in China than from anywhere else, including Japan and Thailand.

The numbers explain the capitulation. In August, 36,070 of Australia's 100,939 new-vehicle sales were built in China, up 79.7 per cent, with Japan back on 24,892. Clearly the ethos towards Chinese car-makers is changing from when they built copycat designs that landed them in court.

Today it appears to be a case of ‘you don't beat that, you join it’.

The burning question is what happens next. Duffy's letter carries no stated consequences and president Donald Trump meets China’s president Xi Jinping this month.

Whether Ford actually gets punished for staying in bed with Beijing – or quietly gets a pass – is anyone's guess.

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