Trump’s trade war has stalled Volvo’s IPO plans

Not yet made in America.
Not yet made in America.
Image: Reuters/Randall Hill
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A planned public offering by Volvo Cars—an archetype of a globalized company in the modern economy—is the latest casualty of Donald Trump’s trade war with Europe and China.

The Swedish carmaker’s Chinese parent company, Geely, planned to list the company in Stockholm before the end of the year, but has shelved the IPO indefinitely amid turbulent market conditions, according to the Financial Times (paywall). Volvo Cars chief executive Håkan Samuelsson told the newspaper he was concerned the company’s stock price could decline after the float.

The offering could have valued Volvo Cars at between $16 billion and $30 billion. Geely bought the company from Ford in 2010 for $1.8 billion.

Like other automakers, Volvo Cars has been buffeted by Trump’s tariff threats against China and the EU. The US president is following through on pledges made during his election campaign, when he told supporters that globalization was hollowing out America’s vital industries. Volvo Cars has plants in China and Europe, as well as a $1.1 billion factory in Charleston, South Carolina that opened this year—its first in the US. Last year, half of Volvo’s sales were in Europe, 20% in China, 16% in the US, and 14% elsewhere.

Hong Kong-listed Geely has soared in the stock market in recent years, and is now the third-biggest car seller in its home market, trailing only behind General Motors and Volkswagen. Geely, which also owns British sports car maker Lotus, has outperformed other major auto companies in the stock market since Trump was elected.

While the Charleston facility is expected to help insulate the carmaker from US tariffs somewhat, Volvo’s shelved offering demonstrates that it isn’t fully protected from trade turmoil. In June, Samuelsson told USA Today he would like to see an end to all tariffs on vehicles shipped between the US, Europe, and China.