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Volvo Cars CEO: Customers must pay for tariff increases

Hakan Samuelsson, CEO of Volvo Cars, said that the company's customers will be responsible for a significant portion of any tariff-related increases. He also stated that if taxes increase it may become impossible to import even one of their most affordable models to the United States.

Donald Trump, the U.S. president, said on Friday that he would recommend a 50% tariff on all goods coming from the European Union beginning on June 1. He claimed the EU had been difficult to deal with in terms of trade.

Samuelsson said that a tariff of 50% would restrict Volvo Cars' ability to sell the EX30 electric car made in Belgium in the United States.

He added that he wouldn't speculate any further due to the nature of the threat of tariffs.

Trump's tariffs against automotive imports have created turmoil in the auto industry. Some companies are altering their production plans to reduce costs associated with the duties while others are waiting to see if policies change.

Volvo has tried to provide its customers an affordable electric vehicle with the EX30. Samuelsson stated that it had been "very severely affected" by tariffs due to being initially produced in China.

Volvo had planned to sell the car on the U.S. Market at a starting price of $35,000. However, the high tariffs placed on cars manufactured in China forced Volvo to wait until the production began in Ghent in Belgium in April this year before selling it. The starting price of the car is now $46,195.

Imports of vehicles from other automakers, such as Ford Motor General Motors, and Toyota Motor from Mexico, South Korea, or Japan, with lower prices, to the U.S. are at risk due to tariff uncertainty.

Samuelsson expressed his optimism that Europe and the United States would soon reach an agreement, despite the threat from rising tariffs.

"I think there will be an agreement soon." It would not be in either Europe's or the U.S.'s interest to stop trade between the two."

The majority of Volvo Cars vehicles sold in the U.S., which accounted for 16 percent of sales last year, are imported. The company plans to add a new plug-in hybrid model at its Charleston, South Carolina plant in the near future. Samuelsson previously stated that this could be a midsized plug-in.

Volvo's share price was down 5.0% by 1337 GMT.

(source: Reuters)