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Former President Donald Trump has proposed a 50% tariff on all goods from the European Union (EU) starting in early June. Trump attributed the new policy to “difficulties in trade negotiations” with the EU.
This move has disrupted industries in Europe, forcing car manufacturers to adjust their production plans to mitigate costs. Hakan Samuelsson, CEO of Volvo Cars, stated that customers may bear the brunt of these new policies, and even their affordable models could be at risk of discontinuation.
The Volvo EX30 is an affordable electric car designed to appeal to American consumers with a starting price of $35,000. Initially, the car was to be produced in China, but it faced significant tariffs.
Volvo was then forced to delay the launch and move production to Ghent, Belgium, which increased the car’s price to $46,195. Now, with Europe back in Trump’s crosshairs, Volvo has had to halt its plans altogether.
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Volvo’s plans to sell the EX30 in the US are becoming increasingly unfeasible due to import taxes. Image: Volvo. |
If the policies remain unchanged, Volvo is likely to discontinue the EX30 as the key attraction for customers—its affordability—will be lost. Volvo’s stock also dropped by 5% in trading on May 23, reflecting investor concerns about the impact of the new tariffs.
In response, Volvo is planning to increase production at its Charleston, South Carolina factory and is expected to introduce a new mid-size SUV PHEV model. This move aims to reduce reliance on imports from Europe, which accounted for 16% of Volvo’s global sales last year.
Samuelsson remains optimistic, believing that the tariffs will be adjusted once Europe and the US find a compromise. “I believe there will be a deal soon. Cutting off trade between Europe and the US is not beneficial for either party,” Samuelsson shared with Reuters.
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