Volvo’s U.S. Assembly Plant a Lucky Shield Against Trade Policies

They could not have gotten any luckier if they had tried. Volvo’s first U.S. assembly plant broke ground for the first time in 2015, and while it was a long time coming, now the South Carolina plant serves as a barrier for any cars produced there against the Trump administration’s trade tariffs. Unfortunately, the S60, the only car currently made in the plant, accounts for less than a tenth of Volvo’s U.S. sales, so most of the automaker’s lineup is still subject to the trade regulations. By 2021, the plant will be able to produce the XC90 SUV, which is part of a more active market, so assuming trade relations are still this way in three years, Volvo may yet be able to maximize their already lucky break.   When Volvo Car Group broke ground on its first U.S. assembly plant in 2015, it was a proud step in the Swedish automaker’s rebound and global expansion, not a chess move in anticipation of a possible trade war. Now that the plant is about to begin production, it’s poised to serve as a small hedge against tariffs at a time when economic barriers are being erected almost daily. The carmaker on Wednesday will reveal its new S60 mid-size sedan, a redesigned model that will replace one currently produced in China and imported into the U.S. Making the car in South Carolina enables the company to sidestep the tariffs President Donald Trump applied this month to Chinese autos. But with the model accounting for less than 9 percent of Volvo’s U.S. sales this year through May, most of the lineup will still be exposed to any import taxes that target countries in Asia or Europe. Click Here to Continue Reading

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