Trump is in China. This company is a cautionary tale of Chinese investment

MEADVILLE, Pa — President Donald Trump is in China, courting new trade deals with Beijing. One glassmaker in the U.S. is warning that their top Chinese competitor exemplifies the risks of letting China in.

CNBC last week visited a Vitro glass plant in Meadville, Ohio, with Rep. Ro Khanna, D-Calif., who is the top Democrat on the U.S.-China select committee in Congress. The plant is helping produce glass for solar panels, and has long produced automotive glass.

CNBC travelled with Khanna throughout the Rust Belt as part of his "Heartland Tour," a multi-state swing through the country's industrial heart to highlight the growth of U.S. manufacturing and the risks from China, the U.S.'s chief competitor.

During Khanna's visit, executives from Vitro aimed their fire at chief rival, Fuyao, and warned that without protection, all competitors in the glass industry would be pushed out.

"If we don't do something about this, there's only going to be two of us," one Vitro executive told Khanna at the meeting. "China has deeper pockets than before, so eventually what they will do is they'll make sure they completely destroy the competition, and then they'll bring up the prices."

"We definitely have to do something about this, otherwise Fuyao is going to be managing the business here," the executive said.

The dynamic underscores the risks that come with allowing Chinese investment in the U.S. at a time when Trump is in Beijing and could strike a deal to allow even more investment. And lawmakers in the Rust Belt are fretting that Trump will strike a deal that allows further hollowing out of the U.S. manufacturing industry from automotive glass to autos themselves.

Vitro and Fuyao both make automotive glass and sell to major automakers such as General Motors and Ford. Vitro is headquartered in Mexico and operates this Meadville factory along with numerous others in the U.S. Fuyao operates a large factory in Moraine, Ohio, which it purchased over a decade ago and was initially welcomed by leaders in the state. The plant was the subject of the 2019 Netflix documentary "American Factory" that was produced by Barack and Michelle Obama's production company.

Vitro says it and other Fuyao competitors cannot match the prices the Chinese company offers. They said during the visit that they don't see a way to produce glass in a way that matches Fuyao's prices, given the industry's maturity and associated costs.

A Fuyao spokesperson brushed aside concerns that it is undercutting its competitors.

"A reliable indicator of your strength in the brand is when a competitor resorts to such claims," the spokesperson said. "Our prices are reasonable, and customers choose Fuyao based on a comprehensive evaluation of technological expertise, product quality, delivery reliability, and service excellence, et al—not solely on cost."

Fuyao has also been the subject of scrutiny in the U.S. recently. In 2024, the Justice Department and Department of Homeland Security raided Fuyao's factory in Moraine, part of a civil forfeiture complaint related to an investigation into a potential $126 million illegal staffing and money laundering operation. 

The DOJ said in a press release following the raid that the suspects in the case created roughly 40 "entities" to "facilitate the harboring, transportation and employment of illegal aliens at various factories," including Fuyao's plant in Moraine.

"It is alleged that many of the workers were illegally smuggled into the United States, primarily through Mexico, and encouraged to travel to the Dayton area to be employed by one of the target entities and serve as a workforce at the various factories," the Justice Department said. "Most of the workers are of Chinese or Hispanic nationality. Workers allegedly lived at 'family style hotels' (boarding houses) owned by the target entities and were driven to and from work in transportation provided by the target entities."

In response to a question about the investigation, Fuyao said the company does not believe it is the target of the investigation.

"Fuyao Glass America has maintained good standing and remains committed to full compliance 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 Justice Department report on "entities implicated in forced labor supply chains, and a detailed breakdown of all related costs to carry out these efforts."

A former Mexican ambassador to China warns that Fuyao is just one of many cases where Chinese-owned entities have become vital to the U.S. supply chain. And he said those supply chains can be disrupted at a moment's notice if China's government decides to shift policy.

"That makes Chinese ownership, wherever they might be, of a part of the supply chain concerning," said Jorge Guajardo, a former Mexican ambassador to China who is now a partner at DGA Group. "Because they have shown they're willing to use that ownership to pressure and to stop companies from acquiring whatever product they use, and, in essence, stopping production."

Fuyao said its U.S. operation is an "Ohio corporation based in Moraine, Ohio and is committed to localized manufacturing operations and the creation of local employment opportunities," and maintained that it does not pose a risk to the supply chain.

Khanna, after a visit to Ultium Cells, an electric vehicle battery-maker run by GM and LG, warned of the potential risks of letting China in. Trump has courted 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 needs to say to China is much more about opening our markets there and making sure they are not engaged in abusive, predatory behavior here."

Another stop on Khanna's tour was First Solar, a U.S. solar panel manufacturer, where he was joined by Rep. Marcy Kaptur, D-Ohio.

Kaptur said China dumping cheaper goods into other markets is "their habit," and warned against Chinese-made vehicles being allowed into the U.S.

"If those borders are open to those $10,000 cars, it'll wipe out the industry," she said. "The president better have the best negotiators in trade that exist in the manufacturing sector in order to properly enforce our trade laws."

And after a meeting at a General Motors plant in Romulus, Mich. with Khanna, Rep. Debbie Dingell, D-Mich., and Rep. Haley Stevens, D-Mich., the lawmakers argued that China poses an existential threat to the broader auto industry.

"If we allow China to manufacture in the U.S., it is to let them come from within," Dingell said. "We cannot allow that to happen."

In a further interview with CNBC at a United Auto Workers Local 600 union hall, Dingell doubled down.

"Sometimes you've got to be smart enough that you don't make the deal," she said. "You're protecting your country by not making the deal."