Construction materials are placed in front of the loading dock at the Fuyao Glass America production facility on Friday, August 19, 2016, in Moraine, Ohio, USA.
Ty Wright | Bloomberg | Getty Images
MEADVILLE, Pa. — President Donald Trump is seeking a new trade deal with China. A U.S. glass manufacturer warns that China’s biggest competitor represents the risks of bringing China into the picture.
Last week, CNBC visited the Vitro Glass factory in Meadville, Ohio, with Representative Ro Khanna (D-Calif.), the top Democrat on the Congressional U.S.-China Select Committee. The factory supports the production of glass for solar panels and has been producing glass for automobiles for many years.
CNBC traveled with Khanna across the Rust Belt as part of a multi-state “Heartland Tour” of the country’s industrial heartlands to highlight the growth of U.S. manufacturing and the risks from China, America’s biggest competitor.
During Khanna’s visit, Vitro executives turned their guns on their biggest rival. FuyaoHe warned that without protection, all competitors in the glass industry would be forced out.
“If we don’t do something about this, we’re going to end up with just the two of us,” one Vitro executive told Khanna at the meeting. “China has more money than ever before, so ultimately what they will do is make sure to completely destroy competition and then raise prices.”
“We definitely have to do something about this, otherwise Fuyao will be managing the business here,” the executive said.
The move highlights the risks involved in allowing Chinese investment in the United States at a time when President Trump is in Beijing and could strike a deal that would allow further investment. And Rust Belt lawmakers are worried that Trump will strike deals that could further hollow out American manufacturing, from auto glass to the cars themselves.
Vitro and Fuyao both manufacture and sell automotive glass to major automakers, including: general motors and ford. Vitro is headquartered in Mexico and operates the Meadville plant along with many other plants in the United States. Fuyao operates a large factory in Moraine, Ohio, which it acquired more than a decade ago and was initially welcomed by state leaders. The factory was the subject of the 2019 Netflix documentary “American Factory,” produced by Barack and Michelle Obama’s production company.
Vitro claims that it and Fuyao’s other competitors cannot match the prices offered by the Chinese company. They said during their visit that given the maturity of the industry and the costs involved, they saw no way to produce glass in a way that would meet Fuyao’s prices.
A Fuyao spokeswoman dismissed concerns that the company was squeezing competitors.
“A reliable indicator of your strength in branding is when competitors resort to such claims,” the spokesperson said. “Our prices are reasonable, and customers choose Fuyao based not only on cost, but also on comprehensive evaluations such as technical expertise, product quality, reliable delivery, and excellent service.”
Mr. Fuyao has recently been attracting attention in the United States. In 2024, the Department of Justice and Homeland Security raided Fuyao’s factory in Moraine as part of a civil forfeiture complaint related to an investigation into $126 million in illegal staffing and possible money laundering activities.
In a press release after the raid, the Justice Department said the suspects in the case had set up about 40 “organizations” to “facilitate the harboring, transportation, and employment of illegal aliens in various factories,” including Fuyao’s factory in Moraine.
“Many of the workers allegedly entered the United States illegally, primarily through Mexico, were employed by one of the targeted companies, and were encouraged to travel to the Dayton area to work in the labor force at various factories,” the Justice Department said. “Most of the workers were of Chinese or Hispanic nationality. The workers reportedly lived in ‘family-style hotels’ (rooming houses) owned by the targeted companies and commuted to work using transportation provided by the targeted companies.”
In response to questions about the investigation, Fuyao said he did not believe the company was a target of the investigation.
“Fuyao Glass America remains in good standing and remains committed to fully complying with all applicable federal, state, and local laws,” the spokesperson said.
The incident prompted scrutiny from Congress. Last year’s Commerce, Justice, and Science Appropriations bill included a requirement for a Department of Justice report on “companies involved in forced labor supply chains and a detailed breakdown of all associated costs to implement these efforts.”
A former Mexican ambassador to China warns that Fuyao is just one of many examples of Chinese-owned companies becoming integral to the U.S. supply chain. And if the Chinese government decides to change its policies, these supply chains could be immediately disrupted, he said.
“So it’s concerning that China owns any part of the supply chain anywhere,” said Jorge Guajardo, a former Mexican ambassador to China and now a partner at DGA Group. “Because they’ve shown that they’re going to use their ownership to exert pressure and prevent companies from acquiring the products they use, essentially shutting down production.”
Fuyao insisted that the company’s U.S. operations pose no risk to its supply chain, saying it is “an Ohio corporation headquartered in Moraine, Ohio, and is committed to local manufacturing operations and creating local job opportunities.”
Khanna is concerned about Chinese investment
Khanna warned of the potential risks of China’s entry after visiting Ultium Cells, an electric vehicle battery maker owned by GM and LG. President Trump has called for foreign investment from a number of countries, including the United Arab Emirates, Qatar, and Saudi Arabia.
“We don’t want Chinese investment if it’s going to be predatory,” Khanna said. “What the president has to say to China is far more about opening up the Chinese market and making sure China doesn’t engage in abusive and predatory behavior here.”
Another stop on Khanna’s tour was US solar panel manufacturer First Solar, where he was joined by Congressman Marcy Kaptur (Ohio).
Kaptur said it was “their habit” for China to dump cheap goods into other markets, and warned that Chinese-made vehicles would not be allowed into the United States.
“If borders were opened to $10,000 cars, the industry would be decimated,” she says. “To properly enforce trade laws, the president should hire the best trade negotiators that exist in manufacturing.”
And after a meeting with Mr. Khanna and Rep. Debbie Dingell (Mich.) and Rep. Haley Stevens (Mich.) at a General Motors plant in Romulus, Michigan, the lawmakers argued that China poses an existential threat to the broader auto industry.
“Allowing China to manufacture in the United States would force China to manufacture from within the United States,” Dingell said. “That’s not allowed.”
In a further interview with CNBC at the United Auto Workers Local 600 union hall, Dingell doubled down.
“Sometimes you have to be smart not to close the deal,” she says. “By not signing an agreement, we will be protecting our country.”
