Column: Trump 2.0 won’t reverse Biden’s critical minerals push
Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
China will scrutinize Ford Motor Co.’s recent agreement with Contemporary Amperex Technology Co. Ltd. to ensure the Chinese battery giant’s core technology isn’t handed over to the US carmaker, people familiar with the matter said. The move is another sign of heightened US-China geopolitical tensions complicating business deals.
Ford said Monday the tie-up would see CATL’s lithium iron phosphate, or LFP, battery technology licensed for use in a new $3.5 billion electric-vehicle battery plant that Ford will run and control in southwest Michigan.
While Beijing is pleased the deal showcases China’s prowess in the EV battery space, officials are concerned that competitive aspects of CATL’s technology could be given to or accessed by the American automaker, the people said, asking not to be named discussing Chinese government deliberations.
Senior Chinese leaders asked for the extra scrutiny, given the sensitivity of the deal and the current state of tensions between Washington and Beijing, the people said. The findings will be presented to the top leadership, but the format and timeframe for that process isn’t yet known, they added.
One of the people said it’s unlikely to result in the tie-up being blocked.
The plan, which has already been examined by lower-level officials in China, is getting this extra layer of national-level scrutiny because of the significance of the deal and its implications for US-China relations, the people said.
Representatives from China’s Ministry of Commerce, the National Development and Reform Commission and the Ministry of Industry and Information Technology didn’t immediately respond to requests for comment Thursday. Representatives for Ningde, Fujian-based CATL also didn’t reply to a request for comment.
“We are not aware of any outreach by Chinese government officials on this matter,” Ford said in an emailed statement.
Control of key technologies has become a significant front in the standoff between the world’s two biggest economies, with the US moving aggressively to restrict China’s access to chipmaking and other strategic capabilities. President Joe Biden put China’s domination of EV batteries in his sights with his signature climate bill — the Inflation Reduction Act — which means electric cars made with a certain amount of China-linked materials miss out on lucrative consumer tax credits.
The IRA has met with significant pushback from the world’s top battery makers, of which CATL is No. 1. China controls vast swathes of the supply chain for battery materials and CATL is a leader in LFP battery technology and production.
Officials in China will also check that individuals sanctioned by the country as part of its tit-for-tat with the US aren’t involved in the Ford-CATL project, seen as a boost for Michigan’s once-dominant automotive industry. China has sanctioned a range of individuals amid frictions with the US, including former Commerce Secretary Wilbur Ross, a raft of Trump administration staff and top executives at Boeing Co. and defense contractor Raytheon Technologies Corp.
A subsidiary of Raytheon and Lockheed Martin Corp. were sanctioned on Thursday for selling arms to Taiwan.
The Ford plant will be the first in the US to produce LFP batteries, which are less expensive and should make its EVs more affordable, Lisa Drake, Ford’s vice president of EV industrialization, told reporters after the factory announcement earlier this week. CATL will help set up the Michigan plant and have staff there, Drake said.
The arrangement is being seen as a possible template for how automakers in the US can still secure tax advantages while benefiting from China’s battery prowess.
It’s drawn criticism in the US at a time of heightened geopolitical tensions with China, inflamed by an alleged Chinese spy balloon that flew over America before being shot down.
Virginia Governor Glenn Youngkin pulled his state from consideration as a location for the factory, calling it a “Trojan horse” for the Chinese Communist Party, while US Senator Marco Rubio has called for a Committee on Foreign Investment in the US (CFIUS) review of the licensing agreement.
China has banned or restricted some military or dual-use technologies from export in the past. But while satellite, pharmaceutical and agricultural tech are covered on an export-ban list, battery making doesn’t appear on it.
More often on the receiving end of bans and restrictions from other countries when it comes to investment and tech use, China has also acted to thwart deals.
Ride-hailing giant Didi was made to delist from the New York Stock Exchange and Tiktok parent Bytedance’s US IPO plans were indefinitely postponed in 2021 after Beijing launched investigations into their data security, including concerns Chinese user and location information could be accessed by foreign entities if overseas investors had a stake in the companies.
(With assistance from Linda Lew, Danny Lee and Keith Naughton)
Comments
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…” China to scrutinize Ford-CATL deal to ensure core technology isn’t shared”
Now isn’t that, funny, ‘strange’ ..?? ? Because, one of the ‘prime conditions’ imposed by China, upon Western Companies, wanting to set up ..their, manufacturing plants, inside of China, was to insist, that before being allowed to do so, they had to first, sign, ..Technology Sharing’ agreements, for the transfer of Western Technology ‘Secrets’ to their, Chinese co-partners..!! ?.
ISN’T that, …strange…?? ??