Volvo has started sourcing XC60 SUVs for sale in the United States from Sweden instead of China to avoid new tariffs introduced this month by President Donald Trump's administration on certain Chinese-made goods.
The information was confirmed by Volvo CEO Håkan Samuelsson in an interview with Reuters published Thursday.
“We will of course reshuffle here and take XC60s for the U.S....from our factory in Europe, and let China produce for other markets,” he said.
He also said Volvo would join the lobbying effort against the latest tariffs because "they would be bad for the whole industry."
The tariffs, which match the 25 percent China has imposed on foreign-made cars for years, were placed on an additional $34 billion of Chinese-made goods entering the U.S., including imports of the Volvo XC60 and S90. China is the sole location for S90 production so the sedans can't be sourced from another site.
Volvo will stand to benefit from increased flexibility in regards to tariffs as production of more vehicles are added to its plant in Charleston, South Carolina, where the 2019 S60 just started rolling off the line. A redesigned XC90 is confirmed to start production at the plant in 2021 and we could see more models added depending on how far the current trade wars escalate.
Unfortunately, escalation looks to be the case. China last week increased tariffs on U.S.-made cars to 40 percent in retaliation to the Trump administration's new tariffs, and now the Trump administration is threatening new tariffs on goods from Europe, including cars. The potential tariffs on European goods will be one of the topics of discussion when President Trump meets European Union officials next week.