china’s market regulator fined Ford Motor Co’s main local joint venture, Changan Ford, 162.8 million yuan ($23.55 million) on June 5th for violating anti-monopoly laws by setting a minimum resale price for its cars in the Chinese municipality of Chongqing since 2013, the latest automaker with foreign partners to face such penalties. The fine amounts to 4% of the company’s sales in Chongqing last year. Ford owns 50% of the joint venture, with the rest controlled by its local partner, state-owned carmaker Changan Automobile. The move comes amid an intensifying trade war between the United States and China, and as Washington put Chinese tech giant Huawei on a trade blacklist, raising concerns among U.S. firms that they might be targeted for retaliation. However, other automakers who have also been punished by China for violating its anti-monopoly laws in the past include General Motors’ joint venture, which was fined $29 million in 2016, as well as Audi and Fiat Chrysler. It is interesting that the fine is the latest salvo by China after the commerce ministry’s announcement that it was compiling a list of “unreliable” foreign companies and individuals deemed to be hurting Chinese interests on May 31st. While the ministry did not specify the consequences or provide additional details, the parameters were for entities that blocked or cut back supplies to Chinese companies for non-commercial purposes. The timing of fining a US carmaker now seems to have a connection with the trade tensions between the two countries.
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