Retaliatory trade tariffs between the world’s two largest economies could end up hurting automobile buyers, Volvo Cars CEO Hakan Samuelsson warned on Wednesday.
“We are very worried because the whole business concept is based on open trade…if we don’t have that, we will have to invest in every single car line in every single country and that will be much more expensive for the consumers,” he told CNBC’s Nancy Hungerford at Auto China, an automotive show held in Beijing.
Following President Donald Trump’s decision to target billions in Chinese imports, Chinese President Xi Jinping’s administration announced plans to impose duties on various U.S. exports, including cars.
The U.S. benefits from open markets, Samuelsson said. “We’re opening a plan in South Carolina, half of what we build there will be exported so half of the 4,000 jobs will be created with exports.”
But Beijing has since promised to reduce its 25 percent tariff on imported cars and scrap foreign auto ownership rules — a move that Samuelsson praised.
“The Chinese government is on the right track if they take away this protection because competition is a much more powerful way of improving and introducing new technology.”
Commenting on Chinese automaker Geely’s recent $9 billion stake in Germany’s Daimler, Samuelsson said the transaction had no direct implications for Volvo.
Volvo and Daimler can still cooperate on projects, he said, adding that the two are not currently in talks on any prospective partnerships.