Asger Risom
As U.S. tariffs hit European carmakers, Volvo CEO Håkan Samuelsson says the shift is simply a reversal of decades-old trade dynamics — even as his company adjusts production to cope.
As trade tensions reshape the auto industry, many European executives have voiced alarm over new U.S. tariffs.
But Volvo’s chief executive, Håkan Samuelsson, is taking a more measured view — even as his company grapples with falling profits and supply chain disruption.
A reversal of roles
For decades, European countries imposed higher duties on American-made cars, while European brands exported to the United States with relatively fewer barriers.
That balance has shifted. American vehicles now enter Europe tariff-free, while European cars face a 15% duty when entering the U.S.
“The U.S. and Europe are rather similar, and now the tariffs are okay,” Samuelsson said at the launch of the Volvo EX60 in January. “In one way, American cars to Europe, they are better than before. Zero tariffs. European cars to America is worse than before. It’s now 15%. So now they’ve sort of changed roles. ‘You charge us for 40 years now we will charge you.’ So I’m not so upset, maybe, at least till they start to talk about more.”
A difficult backdrop
Samuelsson’s calm tone contrasts with Volvo’s recent financial performance. The company’s shares suffered their worst trading day last week after reporting a 68% drop in annual profit.
Volvo attributed the decline to adjustments in its electric vehicle strategy, rising competition in China and the impact of tariffs.
The shifting trade environment has forced the automaker to rethink where it builds and sells its cars.
Build where you sell
Volvo executives say the company’s strategy is straightforward: produce vehicles in the markets where they are sold.
“Our strategy was and is build where you sell. So that’s really key for us, and especially for the U.S.,” Volvo Chief Strategy Officer Michael Fleiss said at the same event.
That approach is already reshaping operations. Volvo’s Charleston, South Carolina plant initially focused on the S60 sedan, which struggled to gain traction in a U.S. market dominated by crossovers.
Plans to fill capacity with the electric EX90 and Polestar 3 ran into delays and weaker-than-expected EV demand. Volvo is now shifting production of its XC60 crossover to the U.S. to better match local demand.
Trade-offs everywhere
Even so, challenges remain. The upcoming all-electric EX60 will be built in Sweden, close to Volvo’s headquarters and primary European market.
That means U.S. buyers could face higher prices due to tariffs, unless Volvo absorbs the additional cost. Expanding American production is not a simple fix either, as the Charleston facility lacks some advanced manufacturing capabilities used in Europe.
Volvo’s global footprint is smaller than rivals such as Toyota, limiting its ability to duplicate production across multiple regions.
Still, the company benefits from being part of the Geely group, which has demonstrated flexibility in moving production between China, South Korea, Europe and the United States to navigate tariff barriers.
Samuelsson appears confident Volvo can adapt to the new trade landscape. Whether that strategy protects margins in a volatile market remains to be seen.
Sources: InsideEVs; remarks by Håkan Samuelsson and Michael Fleiss at the Volvo EX60 launch
