(Reuters) - Some European companies are rethinking their strategies to cushion against the impact of trade tensions between the world’s two biggest economies, the United States and China.
U.S. President Donald Trump said on Friday he was ready to impose tariffs on an additional $500 billion of imports from China, threatening to escalate the current trade clash with the Asian nation.
Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports. In return, China levied taxes on the same value of U.S. products.
The Trump administration on Thursday came under criticism from automakers, foreign governments and others as officials consider imposing tariffs of up to 25 percent on imported cars and parts.
Below are recent comments from European companies on trade tensions:
** Chinese-owned Volvo Cars (IPO-VOLVO.ST) said it was shifting production of its top-selling SUV production for the U.S. market to Europe from China to avoid Washington’s new duties on Chinese imports
** German automaker BMW (BMWG.DE) said this month that it would be unable to “completely absorb” a new 25 percent Chinese tariff on imported U.S.-made models and would have to raise prices on the vehicles made in South Carolina.
** Daimler (DAIGn.DE) issued a profit warning in June, saying that profits would fall in 2018 because new import tariffs on cars exported from the United States to China would hurt sales of high-margin Mercedes-Benz sports utility vehicles
** U.S. tariffs on imported cars would cut around 6 billion euros from German economic output, the president of Germany’s DIHK Chambers of Commerce told German television on Friday.
** The Alliance of Automobile Manufacturers, whose members include General Motors Co (GM.N), Volkswagen AG (VOWG_p.DE) and Toyota Motor Corp (7203.T), also warned on the impact of the tariffs. A study released by a U.S. auto dealer group warned that the tariffs could cut U.S. auto sales by 2 million vehicles
** Sweden’s Electrolux (ELUXb.ST) said on July 18 that the U.S. tariffs announced at the beginning of July would have an impact of $10 million plus this year. In the third quarter, it expects raw material costs to rise by 0.5 billion Swedish crowns.
** Belgian steel wire maker Bekaert (BEKB.BR) reported on the same day that it sees underlying operating profit 20 percent below analysts’ estimates in the first half, blaming wire rod costs partly driven up by tariffs
** Swedish lock maker Assa Abloy’s (ASSAb.ST) CEO said on July 18 that he sees an important further increase in steel prices in the second part of the year in U.S., partly due to new import tariffs. He expects price hikes to compensate better for the higher cost in the last six month of the year than in the second quarter.
** Austrian steelmaker Voestalpine (VOES.VI) said on June 6 that about a third of its U.S. sales would be impacted by Washington’s steel import tariffs, adding that it was talking to its customers about who would bear the cost
** Norway’s REC Silicon (REC.OL) booked an impairment charge of $340 million “due to the market disruption from the curtailment of solar incentives in China, as well as continued trade barriers that prevent access to primary markets inside China.”
“We need the U.S. and Chinese governments to cooperate in ending the solar trade dispute ... to prevent additional job losses and to enhance the value of the solar industry in the U.S. and China.”
Reporting by Pawel Goraj and Tommy Lund; Editing by Keith Weir