Volvo throttles hiring at South Carolina plant due to China trade war tariffs

Nov. 29 (UPI) -- Volvo said it has scaled back hiring plans for its South Carolina assembly plant due to tariffs brought on by the trade war between the United States and China.

Volvo global CEO Håkan Samuelsson told USA Today the company throttled expansion plans for the assembly plant just outside Charleston, S.C., which originally included hiring 1,500 workers by the end of 2018 and 4,000 when production was brought up to full speed.

"We ... thought Charleston could build cars for China," Samuelsson said at the Los Angeles Auto Show Wednesday. "That will not work."

Volvo opened the $1.1 billion plant in South Carolina with plans to begin producing its S60 sedan and add production of its next-generation XC90 sport-utility vehicle in 2021. The intent was to distribute the vehicles to the United States, Europe and China.

But after China increased tariffs on U.S. vehicle imports from 25 percent to 40 percent, Samuelsson said the Chinese-owned Swedish company plans to build the S60 in China for sale to customers there.

Samuelsson has called for all vehicle tariffs worldwide to be eliminated and said any move by the Trump administration to add additional duties on vehicles being shipped between the United States and Europe could result in "big consequences" such as "more expensive cars and probably also lower volumes."

BMW's North American CEO, Bernhard Kuhnt, confirmed his company explored similar options for SUVs produced at its own South Carolina assembly plant, which has become "the highest value exporter of U.S.-made vehicles," CNBC reported.

President Donald Trump stoked the fires of the trade war with a tweet on Wednesday.

"Get smart Congress," Trump wrote. "The countries that send us cars have taken advantage of the U.S. for decades."

Trump and Chinese President Xi Jinping are set to meet during the G20 Summit in Argentina this weekend, where they will likely discuss the trade war after White House economic adviser Larry Kudlow said the United States resumed talks with the Chinese government earlier this week.