https://www.nytimes.com/2025/02/04/opinion/trump-tariffs-china-evs.html
When I look at the torrent of executive orders and tariffs President Trump has issued since taking office, I fear that I’m watching the real-life version of that Certified Financial Planner Board commercial that tries to show why expertise really does matter. In the commercial, a surgeon comes into a hospital room and meets his patient. First, the doctor calls her Brenda and she says, “It’s Carol.” Then the doctor asks, “So which leg are we operating on?” And she says, “You mean arm.” The doctor then waves off her obvious concern, saying, “It’s all connected.” Now totally terrified, the patient finally asks the surgeon: “Are you sure you’re an orthopedist?” The doctor responds: “Actually, I’m a Sagittarius.”
Pardon my skepticism, but I have serious doubts about the degree to which Trump and his team of budget surgeons have actually studied not just how to implement all the cuts and tariffs and freezes and dismissals they’ve rushed to make but also the long-term effects they will have on the totality of American governance, trade and investment.
Whose work are we watching here? That of a surgeon or a Sagittarius? Are we seeing the unfolding of a plan that has been stress-tested and modeled for months, with all the implications fully understood?
Or are we seeing the unfolding of a paper napkin from the Mar-a-Lago bar with some half-baked ideas sketched out and then chaotic seat-of-pants wrangling between Trump and his aides and lobbyists over which industries will be hit and which will be spared?
I’m going with the napkin. It’s hard for me to say it better than the normally pro-Trump Wall Street Journal’s editorial entitled “The Dumbest Trade War in History,” which says “Trump will impose 25 percent tariffs on Canada and Mexico for no good reason.”
But Trump’s impulsive tariffs — which he seems to announce and put on hold at whim — are symptomatic of a deeper challenge to U.S. manufacturers that I want to write about today: how U.S. companies keep pace with China in the industries of the future — artificial intelligence, advanced logic chips, electric vehicles, clean tech and autonomous cars — when these companies are constantly being whipsawed between Democratic and Republican presidents in a world where these companies have to make multi-billion-dollar bets five years in advance. And they have to make those bets while competing against China, where the government wakes up every day and asks manufacturers: How can I help you? And: Let’s take the long view together on how we win globally.
To understand that better, I visited Ford Motor headquarters in Dearborn, Mich., last week to see how it is competing with China’s E.V. juggernaut. Nearly half of new car sales in China are battery-electric or plug-in hybrid electric cars, and its companies already control about 60 percent of the global market for these models. The latter is due in large part to the fact that China makes the best car batteries in the world, and any U.S. automaker that wants to be competitive in the E.V. business today needs battery technology transfer from China.
Let me repeat that a little slower: To be globally competitive in the cars of the future, U.S. automakers need battery tech transfer from China.
We are talking about a total reversal from 25 years ago, when China needed tech transfer from GM and Ford to build internationally competitive cars.
Here is the story in a nutshell. The car industry is totally global today. A company like Ford has to balance the desire of its customers for traditional combustion engines, plug-in hybrids or all-electric vehicles with increasing capabilities for autonomous driving. But it has to do so in a world in which China has made a massive bet on E.V.s and is perfectly happy to ignore the U.S. market for now and beat Ford and other U.S. manufacturers in Brazil, Indonesia, Europe and Africa.
So if Ford ignores the E.V. business entirely, it surrenders the rest of the world to China — and risks waking up one day in five years to find most of the world running on China’s E.V.s — and it’s just left with America. To forestall such a disaster, Ford, like other U.S. automakers, took advantage of incentives offered by the Biden administration to build major E.V. and battery factories in the U.S.
Ford is now near completion of a 1.8-million-square-foot BlueOval Battery Park in Marshall, Mich., which is slated to begin production of lithium iron phosphate (LFP) batteries in 2026 for Ford’s E.V.s. The facility is wholly owned by Ford — a roughly $2 billion investment — but the batteries it will produce for its E.V.s are based on LFP technology licensed from the Chinese battery giant CATL. It is expected to create about 1,700 jobs. (It would have been more, but there has been a slowdown in E.V. sales in the U.S. because of insufficient charging stations.)
The Marshall factory was originally slated to be built in Mexico, but because of President Joe Biden’s E.V. incentives, Ford moved it to Michigan — just how the system was supposed to work: give our auto companies production and consumer tax credits until the industry gets up to scale and can survive on its own. Exactly what China does.
But Ford needed a Chinese battery partner. No American battery manufacturer right now can match CATL batteries, which charge faster and travel farther.
“Cars today are becoming digital transportation devices,” the Ford chief executive Jim Farley told me. And China is 10 years ahead in making the batteries for those cars and creating that all-around digital driving experience, he said. “So, the way we compete with them is to get access to their I.P. just the way they needed ours 20 years ago, and then use our innovative ecosystem and American ingenuity and our great scale and our intimacy with the customer to beat them globally. It will be one of the most important races to save our industrial economy.”
