Sweden looks to Brussels after China talks on Volvo EV tariff deal

BEIJING, (Reuters) – Sweden hopes the European Union and China can reach a pricing deal on electric vehicles soon, its foreign trade minister told Reuters at the end of a visit to China to try to limit the damage to Volvo of a dispute over import tariffs.

The EU Commission last week imposed tariffs of up to 45.3% on China-imported EVs to protect its nascent industry, the culmination of a high-profile trade investigation that has divided Europe and prompted retaliation from Beijing.

Sweden, home to Volvo Cars, abstained in the October vote in the hope that the firm, which is majority-owned by China’s Geely could reach an agreement with Brussels enabling Chinese exporters to commit to higher prices to avoid duties.

Geely faces a tariff of 18.8% on cars shipped to Europe.

“The best case for both Sweden, the European Union and for China would be a would be getting through in these negotiations and actually being able to sign a deal,” Benjamin Dousa said at the end of four days of talks with officials and representatives of dozens of Swedish firms in Beijing and Shanghai.

“The second best from the EU perspective would be a price undertaking deal with the Commission. So we’re hopeful the EU Commission and China can reach a deal in the near future.”

Two-way trade reached US$ 18.8 billion last year, while China imported close to US$ 1 billion worth of Swedish cars, Chinese customs data show.

China’s state-owned Global Times newspaper hinted that Beijing may raise its own import tariff on gasoline-powered cars with engines larger than 2.5 litres, which would not affect car models imported from Sweden.

“For Volvo’s specific situation, it’s all about the EX30 (a small electric SUV),” said Dousa.

“The main reason why we decided to go from no to abstain was that we got positive signals from the EU Commission that they were opening up a dialogue with Volvo in order to get a deal on price undertaking.”

The EU Commission is investing heavily in European car manufacturing in western Sweden, where Volvo has a large plant, as well as Belgium and Slovakia, he added.

Dousa also raised the issue of visa free entry for Swedish citizens, trade barriers and “some sensitive areas” with his Chinese counterparts, he said.

Reporting by Laurie Chen; Additional reporting by Joe Cash; Editing by Philippa Fletcher