The Swedish automaker Volvo‘s $1.1 billion investment plan in the U.S. could be jeopardized amid rising tensions in global trade, the CEO of Volvo Cars told CNBC Thursday, calling for a “de-escalation phase” in the rhetoric over tariffs.
Volvo opened its first U.S. factory last month, located just outside Charleston in South Carolina. The factory is expected to start producing vechicles for exportation in the fall.
However, when asked if this production plan could be derailed due to ongoing trade tensions and fresh tariffs coming from the United States, the company’s chief said “absolutely.”
“I think free trade is good also for employment in the U.S.,” Håkan Samuelsson, chief executive officer of Volvo Cars told CNBC’s “Squawk Box Europe”. He added that Volvo’s U.S. factory would employ up to four thousand people.
President Donald Trump has repeatedly announced import tariffs against other countries in an attempt to reduce the U.S.’s trade deficit. One of his latest threats is to slap a 20 percent levy on European carmakers, which could shake the entire sector in Europe and the economic performance in the region as well.
Samuelsson told CNBC that he is worried about the increased restrictions to trade.
“We are of course, I think the whole business, the whole economy should be concerned about that,” he said. “I really think we should come in to a sort of deescalating phase here because what we firmly believe, we have said very clearly, I think the business is not getting stronger by tariff protection,” Samuelsson said.
Volvo Cars is owned by Geely, a Chinese manufacturer. This becomes particularly relevant given that Trump has raised tariffs for Chinese goods twice this year and has warned there could be further duties.
