America’s current tariff woes have nations and automakers worried about economic shakedown. Even the world’s biggest automaker, Toyota, is unable to dodge the effects, with price hikes expected coming in. But just when you thought that tensions connected to tariffs were starting to ease up, President Donald Trump has thrown a curveball. This time, it’s directed toward the European Union.
On the website Truth Social, President Trump recommended a sweeping 50 percent tariff on goods imported from the European Union. This includes automobiles and parts, which means European automakers, except those from the UK, are in danger of hitting a major roadblock. If nothing changes in the next few days, the said tariff will be imposed starting June 1, 2025.
The Volvo EX30 Will Be Severely Hit
President Trump accused the EU of exploiting the US through restrictive trade policies, taxes, and lawsuits, which he claims have resulted in a $250 billion trade deficit. He called the situation “totally unacceptable,” adding that current negotiations are “going nowhere.” As expected, some automakers aren’t taking things sitting down, with Volvo being the first to share its opinion on the matter.
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The Swedish marque’s CEO, Håkan Samuelsson, told Reuters that the proposed 50 percent tariff would make it “almost impossible” for them to sell the Volvo EX30 in the US, its smallest EV. The EX30 was supposed to be Volvo’s entry-level EV, with a planned price tag of $35,000 when it was introduced in 2023. The EX30 now has a starting price of $44,900, sans destination charges.
Europe Is the Second-Largest Trading Partner Of The US
Volvo initially planned to produce the EX30 in China to curb its pricing. However, previous trade sanctions against the People’s Republic forced the automaker to relocate its production to Belgium to get a reprieve. America’s latest threat to impose a 50 percent tariff seems like an episode in a series of unfortunate events for Volvo, though Samuelsson is still hopeful that President Trump and the EU will come to an agreement soon.
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In line with that, the US has also reached some sort of an agreement with China, with both nations agreeing to lower the levies against each other, albeit only temporarily for economic stability. Hopefully this latest issue with the EU will be resolved soon because beyond Volvo, Europe is the second-trading partner of the US, with pharmaceuticals, vehicles, and automotive parts being the former’s top exports, according to NBC News.
Source: Reuters, NBC News
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