'Too late' for Europe, Ford CEO warns as Chinese cars eye U.S.

02 Oct 2026, 15:33 · The Fresno Bee

Plenty of Americans drive a Honda built in Ohio or a Toyota built in Kentucky and never think of either as an import. That comfort started as a trade fight.

In 1980, no Japanese automaker assembled cars in the U.S., but within a decade, every major one did, according to American Compass.

President Donald Trump wants Chinese carmakers to follow the same script. “Japan does it, but they hire our people,” he told Fox News on Sept. 11, according to Reuters, adding that he would accept Chinese car plants here.

Ford CEO Jim Farley delivered a sharper message in Detroit on Sept. 29. It is “too late” for Europe to fend off Chinese automakers, he said, but America still has time to be careful, according to CNBC. The awkward part is that Ford signed up in July to help a Chinese rival settle into Europe.

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Europe’s wall had a hybrid-shaped gap

Europe did build a barrier. Its 2024 tariffs hit Chinese battery-electric cars but left plug-in hybrids untouched, according to Transport & Environment, a European transport campaign group.

Chinese brands drove straight through the gap. They grabbed a record share of nearly 12% of Europe’s new-car sales in August, largely on hybrids that escape those tariffs, Bloomberg reported, citing Dataforce. The lesson Farley left unsaid is that a trade barrier’s shape matters more than its height.

The second gap is local production. Geely plans to build two electric SUVs at Ford’s plant in Valencia, Spain, starting in 2028, Ford said in July. An expert told the Associated Press the deal hands Geely a shortcut around EU tariffs.

JOSE JORDAN / Getty Images

Ford is already testing the deal America may face

Ford will own two-thirds of the Valencia venture, according to Bloomberg. That split matters because it mirrors an idea Farley reportedly raised with Trump officials in January.

Under that concept, Chinese carmakers could build in the U.S. only through joint ventures controlled by an American partner.

The Transportation Department’s September letter to Farley faulted a framework “to facilitate Chinese joint ventures on United States soil.” Ford called that description one of the letter’s factual errors, according to CNBC.

What I find striking is that Valencia turns a Washington debate into a live experiment. If Ford’s controlling stake keeps profits and know-how flowing its way, Farley’s careful-entry model gains weight. If Geely uses the plant as a European springboard, policymakers get their answer from Spain.

For investors, Ford (NYSE: F) is a bet on whether Detroit survives this fight.

The stock trades at about 6.6 times this year’s expected earnings, according to Stock Analysis, a low multiple that shows how much doubt the market already prices in.

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Farley is right about Europe, but time won’t save America

I think Farley’s diagnosis is correct, and he knows the product firsthand. He drove a Xiaomi SU7 for six months, Fortune reported in 2024. Europe treated Chinese cars as a tariff problem, while Chinese brands treated tariffs as a product-planning problem.

The price gap explains his urgency. BYD’s Seagull sells in China for roughly $10,000, according to InsideEVs. The outlet reports it was once China’s best-selling car, and BYD says its next version can charge to 70% in about five minutes.

Behind Europe’s tariff wall, Chinese EVs still sell for 21% less on average, according to Transport & Environment. Ford’s answer is a “universal electric vehicle” pickup due next year, according to CNBC, and its price will show whether Detroit can close that gap rather than just wall it off.

His prescription is thinner. America’s real edge is not time but a barrier built differently. A Commerce Department rule bars carmakers with a sufficient China link from selling connected vehicles here from model year 2027, even if the cars are built in the U.S., according to the Bureau of Industry and Security.

Unlike Europe’s tariffs, that rule ignores powertrain entirely, so there is no hybrid detour. The catch is that a rule is not a law. It allows companies to seek authorization for deals it would otherwise ban, according to one recent analysis.

Trump’s “hire our people” test has a history, too.

A City Journal review called the 1981 Japanese export limits a partial success at best, noting that they pushed Japanese firms to build here. Jobs followed the factories, but the pressure on Detroit never left.

Three markers will show whether America stays different. Congress is weighing a permanent ban, and automakers want it passed by the end of December, Reuters reported. In Europe, Chinese brands are pushing plug-in hybrids ahead of possible tariffs, Bloomberg reported, and their share after any duties will show how much rested on the loophole.

The third is Valencia. Its first Geely SUVs are due in 2028, according to Ford, offering an early read on Farley’s controlled-venture model.

The real fight is over who owns the factory

For decades, foreign carmakers could build in China only through joint ventures with local partners. The framework Farley reportedly floated flips that rule on Beijing, and a Spanish plant is where it gets tested first.

Experts told CNN that Chinese brands could reach U.S. showrooms within five to 10 years. If they do, the question for investors is whose balance sheet they sit on.

Watch Congress before year-end. A law would set the terms long before Valencia builds its first Geely.

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This story was originally published October 2, 2026 at 8:33 AM.