Volvo chief Samuelsson calls for automotive tariff-free trade
20 August 2018
20 August 2018
The chief executive of Volvo Cars has called for the elimination of tariffs on cars between the US, Europe and China.
Writing in the Financial Times, Hakan Samuelsson has said that removing such barriers would lead to better choice and better cars for consumers, while also providing the possibility of more jobs, growth and prosperity around the world.
In his article, Samuelsson said: ′Recently we have seen worrying developments in terms of international trade. The US, China and the EU are collectively increasing tariffs on thousands of products, steps that are unfortunate and likely to be counterproductive. We believe that the terms of trade between countries should be fair, but they should also be as open as possible.
′Tariffs and other trade barriers harm economies, job creation and thus local communities and their citizens. We must resist the siren call of protectionism and focus on a constructive dialogue around trade instead. After all, there are no winners in a trade war, only losers.’
The car industry is reliant on complex supply chains, where parts and vehicles are shipped from different manufacturing plants in different locations around the world. These chains are heavily affected should trade disputes occur. Manufacturers are already bracing themselves for a potential ′no-deal’ on Brexit, which would see a 10% tariff, based on World Trade Organisation (WTO) rules. Recently, there has been tension between Europe and the US, while the US is also in dispute with China.
China will send a trade delegation to the US at the end of the month, in the first formal attempt at negotiations since Washington imposed tariffs on Chinese goods. Earlier talks between the pair fell apart after negotiations failed to fulfil requirements set by the US.
The global trade war was sparked by US President Donald Trump, who was elected on a promise to protect American jobs and is seeking to change a series of arrangements, from trade with China and the EU to the North American Free Trade Agreement, that he sees as putting the US at a disadvantage.
Samuelsson wrote: ′All sides need to work together to come up with reciprocal agreements that reduce barriers to trade. China recently decided as an encouraging first step to lower car import tariffs from 25 to 15 per cent, informed by the aim of creating a more competitive and independent Chinese car industry, and it is in this spirit we should continue. The joint decision last month by the US and the EU to work towards zero tariffs is another encouraging decision that deserves further support.’