American automaker Ford recently held talks with Chinese electric vehicle maker Xiaomi about a possible partnership that would allow Chinese companies to enter the U.S. market, according to four sources familiar with the negotiations.
According to those sources, talks were at an early stage, but Ford was considering forming a joint venture with Xiaomi to produce electric vehicles in the US. Ford has also reportedly talked to BYD and other Chinese manufacturers about potential cooperation in the American market.
Ford, however, denied the allegations, stating that the information was incorrect and that such conversations did not exist. Xiaomi did not respond to a request for comment, while BYD declined to comment.
Political pressures and security dilemmas
A possible deal would be extremely controversial in Washington. John Mullenaar, the Republican chairman of the House China Committee, said that Ford would thereby “turn his back on American and allied partners” and further increase the US’s dependence on China. He warned that joint ventures with Chinese companies often end badly for American firms.
The story gains additional weight due to the attitude of Ford CEO Jim Farley, who is known to be a big admirer of Chinese electric vehicles. Farley even imported the Xiaomi SU7 model for personal use, and last year he warned that Chinese manufacturers pose an “existential threat” to the Western auto industry.
Meanwhile, the political framework remains extremely restrictive. Former President Joe Biden’s administration effectively closed the US market for Chinese cars in 2024 by imposing 100 percent tariffs, and Donald Trump has maintained those measures, with additional restrictions on software and hardware of Chinese origin in vehicles. However, Trump recently said that Chinese companies that want to build factories and hire in the US would be welcome.
Analysts warn that the eventual partnership between Ford and Xiaomi could have a “domino effect”, forcing other American manufacturers to make similar arrangements in order to survive, which would open up new questions about industrial policy and US national security, the FT reports.