Volvo, majority-owned by China's Geely, has taken a significant step by moving production of Chinese-made electric vehicles (EVs) to Belgium. This decision comes in anticipation of the European Union's (EU) potential crackdown on Beijing-subsidized imports. Here are the key details:

1. Tariff Avoidance Strategy:

   - Volvo was considering suspending sales of Chinese-built EVs bound for Europe if tariffs were introduced.

   - However, the company has now shifted production of its EX30 and EX90 models from China to Belgium, effectively negating the need to halt sales of EVs made in China.

   - Volvo insists that suspending sales of Chinese-made EVs is no longer under consideration.

2. European Commission Investigation:

   - The EU's European Commission launched an investigation into whether fully-electric cars manufactured in China were receiving distortive subsidies and warranted additional tariffs.

   - The anti-subsidy investigation, initiated on October 4, 2023, can last up to 13 months. Provisional anti-subsidy duties may be imposed nine months after the probe begins.

3. Strained EU-China Relations:

   - Relations between China and the EU have faced challenges, including Beijing's closer ties with Moscow following Russia's invasion of Ukraine.

   - The EU aims to reduce its reliance on China for materials and products needed for its green transition.

In summary, Volvo's strategic move reflects the evolving landscape of the EV industry and the global push toward sustainable transportation.