Introduction

U.S. Transportation Secretary Sean Duffy has publicly challenged Ford over its business relationships with Chinese companies, citing national security concerns just weeks before a major diplomatic meeting between former President Donald Trump and Chinese President Xi Jinping. The dispute highlights growing tensions around American automakers overseas partnerships.

What Happened

Duffy recently sent a formal letter to Ford CEO Jim Farley urging the company to sever connections with Chinese state-backed enterprises, arguing that such ties raise economic and security risks. The Department of Transportation made the letter public, drawing attention to Ford partnerships with Chinese battery giant CATL at the BlueOval Battery Park Michigan facility, its manufacturing collaboration with Geely in Spain, and ongoing discussions with BYD regarding hybrid vehicle components. Duffy also pointed to Ford plan to shift Lincoln vehicle production from China back to the United States by 2030, arguing it keeps the company dependent on Chinese manufacturing for several more years.

Ford pushed back, calling the letter wrongheaded and emphasizing that its CATL arrangement is a limited technology licensing agreement, not a joint venture or foreign-owned operation. The automaker noted a $3 billion investment in the Michigan plant and approximately 1700 expected jobs, while the White House recently highlighted the facility as an example of growing U.S. manufacturing.

Why This Matters

The clash occurs as lawmakers and industry leaders push to further restrict Chinese vehicles and software from entering the U.S. market. Chinese cars already face a 100 percent tariff, and Commerce Department rules block the sale of connected vehicles and hardware linked to China or Russia over national security concerns. Bipartisan legislation the Connected Vehicle Security Act of 2026 advanced unanimously through the Senate Commerce Committee in July, aiming to codify those restrictions into law.

Interestingly, Ford CEO has publicly supported restricting Chinese automakers from the U.S. market, stating they should be kept out to protect domestic manufacturing.

Key Takeaways

  • Secretary Duffys letter frames Ford China partnerships as a security risk, urging a strategic pivot toward U.S.-based production.
  • Ford defends its investments, emphasizing the Michigan battery plants job creation and classifying its CATL deal as limited technology licensing rather than a joint venture.
  • The automaker CEO has publicly supported restricting Chinese automakers from the U.S. market, aligning with the administrations broader concerns.
  • Pending legislation seeks to institutionalize restrictions on Chinese-connected vehicles and software, reflecting bipartisan momentum on the issue.
  • The dispute coincides with an upcoming Trump-Xi meeting, where trade and technology policy are expected to be central topics.

Conclusion

As the Ford-Duffy dispute illustrates, the intersection of auto manufacturing, national security, and U.S.-China relations is entering a more contentious phase. Whether the automaker will adjust its China strategy ahead of high-level diplomatic talks remains to be seen, but pressure on American companies to decouple from strategic competitors is unlikely to ease.