Just when we thought it was safe to buy the f**king dip amid comments from China that implied an easing of tensions (despite Chinese media denying any such softening), news overnight confirmed tensions with US firms is escalating.
Just days after China said that it’s investigating FedEx for “wrongful” deliveries, a move framed by the state news agency as a warning by Beijing, Bloomberg reports that China has fined Ford's main joint venture in the country for antitrust violations.
According to a statement on the State Administration for Market Regulation’s website, Changan Ford Automobile, the 50:50 venture between Michigan-based Ford and Chongqing Changan Automobile, must pay a penalty of 162.8 million yuan (US$23.6 million) - equivalent to 4 per cent of the venture's annual sales in Chongqing - for a business practice that restricted retail prices since 2013.
"It’s hard to see [this fine] as not related [to US tensions]," said Andrew Polk, co-founder of research firm Trivium China in Beijing. "At this stage I think our baseline assumption should be that there are no coincidences."
In an emailed statement, Changan Ford said it will accept the fine imposed by China’s anti-monopoly authority agreeing to further regulate its operations in China and safeguard a free, fair market competition environment.
The fine adds to Ford’s woes in China as sales at its Changan venture dropped 54 percent in 2018.
This latest move follows the Trump administration's ban on business with telecommunications giant Huawei and China's threat to blacklist foreign firms that damage domestic companies’ interests.
It would seem this trade war is anything but de-escalating and once President Trump returns from Europe, we suspect the rhetoric will worsen.