Volvo Cars seeks U.S. tariff exemption for SUV made in China

Volvo XC60

Volvo Cars has asked the Trump administration to exempt the company’s Chinese-made mid-size XC60 SUV from new 25 percent tariffs, the most recent automaker to seek relief from new levies on imports from China.

The automaker verified on Friday it has sought an exemption with the U.S. Trade Representative’s Office (USTR) for the well known vehicle that accounted for almost a third of its U.S. sales in August.

“The imposition of the extra 25 percent duty on mid-size SUVs would cause severe economic harm,” Volvo stated in an August 16 letter to USTR that has not been earlier reported. “The burden of the 25 percent duty imposed on vehicles imported from China are also going to be borne by American consumers.”

Previously this week, Volvo Cars and its Chinese owner Geely delayed strategies to float shares in the Swedish automaker, putting blame on trade tensions and a slump in automotive stocks.

The XC60 in August represented 31 percent of Volvo’s U.S. sales.

Volvo stated the XC60 was at first built only in Sweden and then it added production in China. During January to early March, Volvo was sourcing vehicles from the two countries but since March U.S. XC60s have only come from China, the company stated.

Volvo just started commercial production at its new Charleston, South Carolina plant, where it is making S60 sedans, it informed USTR, “but over time given our global manufacturing footprint we could also anticipate production of the XC60 in the U.S. as well.”

A Volvo spokesman refused to comment on whether new tariffs have impacted vehicles now in U.S. showrooms or if the levies will urge price increases. The Trump administration enforced new 25 percent tariffs on $34 billion in Chinese goods in July, consisting Chinese-made vehicles.

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