Ford Is Fined in China as Trade Fight With U.S. Rages – The New York Times

BEIJING — China’s antitrust regulator on Wednesday announced a fine of around $25 million on Ford’s main joint venture in the country, the latest action against an American company amid the widening economic battle between China and the United States.

Changan Ford, which is owned equally by the Detroit automaker and a state-backed Chinese company, was fined as Washington and Beijing have taken aim at each other’s businesses after the collapse of trade talks last month.

First, the Trump administration barred American technology companies from selling to Huawei, the Chinese maker of smartphones and telecommunications equipment, denying it access to vital software, microchips and other components. Then, China said last week that it would create a blacklist of “unreliable” foreign companies and people who harm the interests of Chinese firms, without giving specifics.

One giant American company is already feeling the pressure. Beijing is reportedly investigating FedEx over what the firm has called erroneous misrouting of some packages destined for Huawei addresses in Asia.

It is not clear whether the move against Ford is directly connected to the broader clash with the United States. China’s antimonopoly authority, the State Administration for Market Regulation, said it was fining Changan Ford for setting minimum prices for its dealers in Chongqing, the inland metropolis where the company is based. That action deprived dealers of the autonomy to set their own prices, the government said.

Chinese regulators have acted against other automakers on similar grounds in the past. Beijing has moved strongly in recent years to shape the way companies in many industries set prices for their products, hoping that this will encourage Chinese consumers to spend with greater confidence.

But the Chinese government tends to enforce certain rules and regulations with greater vigor during times of geopolitical tension, particularly when foreign companies are involved, business groups in China say.

Recently, the Chinese antitrust regulator left Qualcomm in prolonged limbo while it reviewed the American chip maker’s plan to acquire a Dutch competitor. Beijing never formally approved or denied the multibillion-dollar deal, causing it to be abandoned last year, after the Trump administration began raising tariffs on imports of Chinese goods. The authorities in eight other jurisdictions, including the United States, had already given their blessing to the deal. Chinese officials denied that the issue was related to the trade fight.

In a statement on Wednesday, a Ford spokesman said Changan Ford had taken “corrective action” with respect to its sales policies.

“Changan Ford will continue to ensure its business activities contribute to a free and fair competitive environment,” the statement said.

Shares of the automaker fell about 2 percent in early trading Wednesday.

Ford and other American automakers have been struggling in China of late. The country is the world’s largest market for cars, but the Chinese economy is slowing, and some assembly plants run by Detroit carmakers have been dismissing workers and running below capacity.

Changan Ford was established in 2001, and it produces most of Ford’s main models in China. The number of cars it sold in April fell by more than 60 percent from a year earlier.

Cui Dongshu, the secretary general of the China Passenger Car Association, which represents manufacturers, said on Wednesday that the antitrust authority’s move against Changan Ford was a “normal” step to promote competition, and that it had nothing to do with conflicts with the United States. And indeed, the move is not out of sync with previous actions by the authorities in China.

“The Chinese antimonopoly regulatory authority has the flavor of a price regulator as well,” Lester Ross, a partner at the Beijing office of the law firm WilmerHale, said.

“It’s a peculiarity of the system here,” he added. “They pay attention to the welfare of the distributors and the welfare of retailers to a greater extent than the welfare of consumers.”

By contrast, the attitude of American regulators is generally that if you, as a consumer, don’t like the price you are being charged for something, “then you can go buy another product,” Mr. Ross said.