Volvo cars has started shifting production of Chinese-made electric vehicles to Belgium in the expectation that the EU will drive ahead with a crackdown on Beijing-subsidized imports, as per reports on Saturday. Trade frictions between the EU and China have led to a barrage of anti-dumping probes against Beijing amid allegations of unfair subsidies.
As per report, the EU is expected to tell EV makers in China as early as next week whether it would impose provisional tariffs from July 4 that would boost import duties above the current level of 10 percent.
Volvo shifting production
As per report, citing company insiders, Volvo, which is majority-owned by China’s Geely, was considering halting sales of Chinese-built EVs bound for Europe if tariffs were introduced.
However, the report added that shifting production of Volvo’s EX30 and EX90 models from China to Belgium is expected to negate the need for the company to do so. Also the company insisted suspending sales of EVs made in China was no longer being considered.
The manufacturing of certain Volvo models bound for the United Kingdom could also be moved to Belgium, the report stated.
Volvo did not immediately respond to the news.
Volvo shift to Belgium
On top of transferring production of Volvo’s EX30 and EX90 models to Belgium, the carmaker may also move assembly of some Volvo models bound for the UK, the report said, citing unidentified people.
Trade frictions between the EU and China have led to a barrage of anti-dumping probes against Beijing amid allegations of unfair subsidies. The EU is expected to tell EV makers in China as early as this week on whether it will impose provisional tariffs from July 4 that would boost import duties above the current level of 10%.
European Commission investigation
The European Commission, which oversees trade policy in the 27-nation European Union, launched an investigation last year into whether fully-electric cars manufactured in China were receiving distortive subsidies and warranted extra tariffs.
The anti-subsidy investigation, officially launched on Oct. 4, can last up to 13 months. The Commission can impose provisional anti-subsidy duties nine months after the start of the probe.
Trade friction between China and the EU
Relations between China and the EU have been strained by factors including Beijing’s closer ties with Moscow after Russia’s invasion of Ukraine. The EU is seeking to reduce its reliance on the world’s second-largest economy, particularly for materials and products needed for its green transition.
China last week accused the EU of working to “suppress” Chinese companies and has signaled it is ready to unleash retaliatory duties on EU-made vehicles with large engines, a move that would hit Germany’s Mercedes-Benz AG, Porsche AG and BMW AG the most.
Germany on Volvo production relocation
German Chancellor Olaf Scholz spoke out against restricting automotive trade as the EU moves closer to slapping tariffs on EVs imported from China.
Germany’s auto industry is benefiting from business in China and would be able to compete with the Asian country’s automakers if trade remains “fair and free,” Scholz said on Saturday.
“Isolation and illegal customs barriers — that ultimately just makes everything more expensive, and everyone poorer,” Scholz said at an event organized by Stellantis NV’s Opel in Ruesselsheim, Germany. “We do not close our markets to foreign companies, because we do not want that for our companies either.”
Germany’s powerful auto industry has pushed back against tariffs, saying its business with China secures jobs at home.
China last week accused the EU of working to “suppress” Chinese companies and said it will take action to safeguard its interests.
