Trump's trade war has forced one of Europe's most famous automakers to delay a $30 billion IPO

The new Volvo XC60 T8 is a major design overhaul for the Swedish car maker Photo: supplied

  • The parent company of Swedish automaker Volvo has postponed its planned initial public offering.
  • Chinese car giant Geely is worried that President Trump’s trade war could impact Volvo’s valuation.
  • Volvo’s IPO would have been the largest in Sweden in 17 years.

Volvo, the Swedish automaker, has reportedly had its initial public offering (IPO) plans delayed by its parent company as a result of uncertainty surrounding US President Donald Trump’s trade war.

The Financial Times reports on Monday that Geely, the Chinese auto giant which owns Volvo, has paused plans for an IPO that valued Volvo at $US30 billion because Geely is worried US President Donald Trump’s trade war could hurt its valuation.

“Conditions right now are not optimal to give certain upside for the investors,” Hakan Samuelsson, Volvo’s chief executive, told the FT. He added that the listing requires “stable market conditions.”

“It’s important to know that we have headroom, so we can look the investors in the eye a year after the IPO,” Samuelsson added. “It is still an option, a very realistic option, but will not happen immediately.”

The FT reports that though Geely believed it had secured the backing of investors, it worried that Volvo’s stock could slip in the immediate aftermath of the flotation, angering Swedish pension funds. The IPO would have been the largest in Sweden since telecoms firm Telia listed in 2001.

Geely, which also owns British sports car maker Lotus and the company which manufactures London Black Cabs, sold more than 1.2 million cars in 2017.

The delay to Volvo’s IPO comes as Trump’s trade war with China threatens to escalate. Late last week, the US consultation period on the introduction of fresh tariffs on $US200 billion of Chinese goods ended, with no decision so far on whether tariffs will be imposed.

Trump elevated trade-war rhetoric with China to a fever pitch on Friday, threatening tariffs on another $US267 billion worth of Chinese goods.

Speaking with reporters on Air Force One, Trump said long-threatened tariffs on $US200 billion worth of Chinese goods would “take place very soon”, with more on the way.

“I hate to do this, but behind that there is another $US267 billion ready to go on short notice if I want,” Trump said.

If Trump follows through with both threats, tariffs would be imposed on $US517 billion of Chinese goods coming into the US – virtually every import. Last year, the US imported $US505 billion worth of goods from China.

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