Volvo Commences Shifting Production from China to Belgium to Counter EU Tariffs

Volvo Cars has begun shifting the production of Chinese-made electric vehicles (EVs) to Belgium, anticipating a European Union crackdown on Beijing-subsidised imports, as reported by The Times on Saturday. Volvo, which is majority-owned by China's Geely, had considered halting sales of Chinese-built EVs destined for Europe if new tariffs were introduced. However, the relocation of production for Volvo's EX30 and EX90 models to Belgium is expected to negate this need, with the company asserting that suspending sales of China-made EVs is no longer being considered.

The manufacturing shift might also include certain Volvo models bound for the United Kingdom, according to The Times. Volvo did not immediately respond to a request for comment from Reuters.

Last year, the European Commission, which manages trade policy for the 27-nation EU, launched an investigation into whether fully electric cars made in China were receiving unfair subsidies, potentially warranting additional tariffs. This anti-subsidy investigation, which officially started on October 4, can last up to 13 months, with the Commission able to impose provisional anti-subsidy duties nine months after the investigation begins.

The investigation and potential tariffs come amid strained relations between China and the EU, exacerbated by China's closer ties with Moscow following Russia's invasion of Ukraine. The EU is actively working to reduce its dependence on China, especially for materials and products crucial for its green transition.