Volvo boss calls for lower China and Europe tariffs

Samuelsson says EU not made stronger by protection as he opens first US car factory

Volvo now has a manufacturing presence in all three continents at the heart of the dispute, as it added a factory in Charleston, South Carolina, to facilities in its homeland of Sweden, Belgium and China

Volvo now has a manufacturing presence in all three continents at the heart of the dispute, as it added a factory in Charleston, South Carolina, to facilities in its homeland of Sweden, Belgium and China

 

The chief executive of Volvo Cars has called for China and Europe to lower their tariffs on cars as he admitted he was “very disturbed” by President Donald Trump’s talk of raising automotive import duties into the US.

Hakan Samuelsson, head of the Chinese-owned but Swedish-based premium carmaker, on Wednesday opened Volvo’s first factory in the US in what he conceded was fortuitous timing.

“Thanks to God that we have this factory. We would be much worse without it,” he said when asked about Mr Trump’s threats to increase tariffs on imported vehicles.

Mr Samuelsson added: “It’s in Chinese interests to have really low tariffs. It’s the same in Europe: the protection the European industry had has not made it any stronger. Lower tariffs would be good for Volvo, consumers, and the economy.”

Mr Trump has sparked fears of a global trade war with a large part of his rhetoric focusing on cars. He has said repeatedly that he fails to understand why the US should have low tariffs of 2.5 per cent on cars when, for instance, the EU imposes 10 per cent on American vehicles.

Volvo now has a manufacturing presence in all three continents at the heart of the dispute, as it added a factory in Charleston, South Carolina, to facilities in its homeland of Sweden, Belgium and China. At full capacity, the new factory can produce 150,000 cars a year, of which about half are earmarked for export, and it will employ up to 4,000 people.

“This factory is really an example for how trade could be beneficial for both sides,” Mr Samuelsson said. He added that it would help reduce Volvo’s currency exposure while also helping to convince its US dealers to invest more.

The Swedish carmaker has a unique vantage point within the industry as it is wholly owned by Chinese carmaker Geely, which has also taken stakes in truckmaker Volvo and German automotive group Daimler.

Volvo is currently considering a stock market listing with Mr Samuelsson again repeating on Wednesday that the decision was one solely for its owner, Geely, and its chairman, Li Shufu.

Volvo’s chief executive said his emotions about potential tariffs had fluctuated in recent months. He was heartened by China’s announcement last month to lower import duties from 25 per cent to 15 per cent but that decision could be reversed as part of the latest spat between Washington and Beijing.

“It is very disturbing and worrying. If we would have trade restrictions and tariffs we would have a totally different economy. We just have to hope that it will not happen...We should harmonise [TARIFFS]on the lowest possible level,” Mr Samuelsson said. – Copyright The Financial Times Limited 2018