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The Chief Executive of Volvo Cars has called on the European Union to unilaterally reduce its 10% import tariff on American-made vehicles, arguing that European manufacturers no longer require protection from their U.S. counterparts and warning that inaction could provoke further trade escalation from Washington.
In an interview with Reuters following the company’s second-quarter earnings announcement, Håkan Samuelsson stated that the EU should demonstrate leadership on free trade by taking the initiative on tariff reductions. His remarks come amid renewed threats from U.S. President Donald Trump to raise duties on EU car imports from 27.5% to 30% starting 1 August, a move that would significantly affect Europe’s automobile sector.
“If Europe is for free trade, we should be the ones showing the way and going down to very low tariffs first,” Samuelsson said.
A Strategic Risk
Volvo Cars, which is majority-owned by China’s Geely Holding, is particularly vulnerable to shifts in U.S. trade policy. The Swedish carmaker sells a substantial portion of its vehicles in the American market, most of which are produced in Europe and therefore subject to U.S. import tariffs. While other European automakers have production bases in North America, Volvo’s reliance on exports places it in a more exposed position.
Samuelsson was clear in his assessment: “The European car industry definitely does not need to have any protection from American auto builders.”
This is not the first time Volvo has raised concerns over the imbalance in transatlantic auto tariffs. Prior to the Trump administration, the U.S. levied a 2.5% duty on imported European passenger vehicles, while the EU’s rate on U.S. vehicles stood at 10%. The discrepancy has long been a point of contention in trade discussions.
Market Response
Volvo’s Q2 operating profit declined sharply, but still outperformed analyst expectations. Despite ongoing challenges in several markets, including weaker-than-anticipated demand for certain electric models in the U.S., the company is pressing ahead with plans to localise production in North America.
Late on Wednesday, Volvo confirmed it would begin producing its hybrid XC60 model in South Carolina in late 2026. This shift is aimed at reducing the company’s exposure to tariffs by increasing domestic U.S. output.
At present, Volvo’s American plant manufactures only the Polestar 3 and the fully electric EX90 SUV, both of which have struggled to achieve significant market traction. The company has also started reducing the number of models it offers in the United States, reflecting both cost pressures and consumer demand trends.
“These are the measures we have control over,” Samuelsson explained. “When it comes to tariffs, we can only have an opinion like everybody else.”
Political and Industry Reactions
The European Commission has not responded directly to Samuelsson’s comments. However, officials in Brussels have for months been engaged in efforts to convince the Trump administration to ease its tariff stance, particularly given the upcoming August deadline. With the prospect of a 30% tariff on European auto imports now imminent, the Commission is under mounting pressure to act.
Trade experts say Samuelsson’s proposal—unilateral EU tariff reductions—could shift the political calculus in Washington, though it also risks being seen as a concession without guarantee of reciprocity.
Auto industry groups have remained divided. Some support a symmetrical tariff regime as a pathway to liberalised trade. Others, particularly smaller manufacturers with limited U.S. presence, remain wary of opening the European market further without firm assurances from the U.S.
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