Here's an awkward situation: Ford Motor Company (F) reportedly wants to buy batteries from Chinese EV powerhouse BYD Co. (BYDDY) (BYDDF), and a top Trump administration official is not happy about it.

The Deal That Has Washington Worried

Peter Navarro, who serves as Senior Counselor for Trade and Manufacturing under President Donald Trump, didn't mince words when reacting to a Wall Street Journal report about Ford's battery talks with BYD. His concern? That American companies are essentially funding their own obsolescence.

"So Ford wants to simultaneously prop up a Chinese competitor's supply chain and make it more vulnerable to that same supply chain extortion? What could go wrong here?" Navarro tweeted.

He didn't stop there. "Did Ford forget the rare earth extortion already? BYD is the latest predatory pricing kind on the block. Aim is to control global EV production – Tesla will be a footnote if this keeps up."

That last bit matters because BYD just passed Tesla Inc (TSLA) as the top-selling electric vehicle company globally in 2025. So when Navarro warns that Tesla could become "a footnote," he's talking about a company that's already losing ground to Chinese competitors.

Why Ford Wants This Deal

The reported partnership would have Ford purchasing batteries from BYD for some of its hybrid vehicles. This makes sense from Ford's perspective: the company recently announced it's scaling back pure electric vehicle production and doubling down on hybrids instead. Getting batteries from BYD, which has mastered cost-effective battery production, could help Ford secure supply as it expands hybrid offerings in the United States.

The Bigger Picture on China

The potential tie-up raises a thorny question about whether Chinese automakers are leveraging price advantages to corner the global EV market in ways that American companies like Tesla simply can't match. Right now, tariffs and software restrictions have mostly kept Chinese automakers out of the U.S. market. But that protective wall doesn't help if American companies voluntarily partner with Chinese firms.

What makes this especially awkward is the timing. Ford recently hosted Trump at its facilities, and CEO Jim Farley said Trump has been "great to work with." But Farley himself has expressed concerns about Chinese automaker dominance, particularly noting that China is rapidly expanding in Europe and grabbing electric vehicle market share.

Farley even said he was worried that Trump previously floated the idea of letting Chinese automakers into the U.S. market directly.

What Happens Next

Nothing's finalized yet between Ford and BYD. But Navarro's public criticism could be more than just commentary. It might be a signal that the Trump administration would strongly discourage Ford from moving forward with any partnership. When a senior advisor this close to the president calls out a company by name, that's usually worth paying attention to.

For now, Ford finds itself in a delicate position: trying to compete in an industry increasingly dominated by Chinese manufacturing prowess while navigating political pressure to keep that same competition at arm's length.