Multinational companies are increasingly using joint ventures to bypass trade barriers and localize supply chains amid rising geopolitical tensions.
Key facts
- •Multinational executives are pursuing corporate deal-making as a hedge against state-level geopolitical friction.
- •Joint ventures are being used as risk-mitigation vehicles to bypass trade barriers and secure footholds in multiple regulatory regions.
- •Geely and Ford are partnering to manufacture new energy vehicles at a plant in Valencia, Spain.
- •The partnership allows Geely to avoid European tariffs while providing Ford with advanced EV and battery technology.
Despite escalating trade conflicts and regulatory hurdles between Beijing, Washington, and Brussels, Chinese and Western manufacturing giants are forming strategic alliances. These partnerships serve as a hedge against government-imposed tariffs, export controls, and investment screening mechanisms.
Automotive sector partnerships
The automotive industry, particularly the new energy vehicle (NEV) sector, is a primary example of this trend. Geely Automobile Holdings and Ford Motor Company recently announced a partnership to produce NEVs for the European market at Ford’s existing manufacturing plant in Valencia, Spain.
Strategic benefits for manufacturers
For Geely, the collaboration provides a 'Made in Europe' designation, allowing the company to avoid punitive tariffs and utilize established supply chain infrastructure without the time required to build new facilities. Ford, which has faced challenges with profitability and electrification in Europe, gains access to Geely’s modular electric vehicle architecture and battery technology.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by SCMP Business.
