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Volvo Cars CEO Hakan Samuelsson says exporting S60 sedans from South Carolina to China isn't viable because of tariffs. The global trade turmoil also caused the Swedish automaker to delay an initial public offering. File/Wade Spees/Staff

The ongoing trade dispute between the United States and China has Volvo Cars canceling plans to go public and rethinking its strategy for exporting vehicles from its Berkeley County manufacturing campus. 

Hakan Samuelsson, the automaker's chief executive, told foreign media on Monday that it's no longer viable to export S60 sedans from the plant off Interstate 26 near Ridgeville to China because of a 25 percent tariff that country has placed on U.S.-made vehicles.

China enacted the tariff in retaliation for similar import taxes President Donald Trump approved on a variety of Chinese-made goods.

"The issues around trade are hard for us because they impact cars shipped between China and the U.S.," Samuelsson told Bloomberg News. "The risk is that these headwinds will increase."

Volvo started production this month in Berkeley County, although it isn't clear when the first vehicles were scheduled for export from the Port of Charleston. The automaker had planned to hire 4,000 workers and export about half of the cars made at the site, although Samuelsson has said that hiring might not happen if tariffs hurt business. 

Samuelsson said the company will use its plant in Sweden rather than its Chinese factories to ship cars to the United States. Volvo builds its S90 sedan and XC60 SUV at Chinese plants in Chengdu and Daqing.

Volvo — based in Sweden but owned by China's Geely Holding Group — also will delay an initial public offering because the automaker fears investors will undervalue the company due to global trade disputes, Samuelsson told the Financial Times newspaper.

Geely planned to offer part of Volvo to investors before the end of this year and expected to raise $30 billion from the IPO, the newspaper reported. The offering would have been the largest on Sweden's stock exchange in nearly a decade, although Forbes reported Volvo's valuation had dropped to as low as $12 billion in the wake of the tariffs.

"It's important to know that we have headroom, so we can look the investors in the eye a year after the IPO," Samuelsson told the Financial Times. "It is still an option, a very realistic option, but will not happen immediately. The timing has to be optimal."

Reuters columnist Liam Proud, writing in The New York Times, said the cancellation likely had more to do with Volvo's valuation than tariffs. The $30 billion target is 27 times Volvo's annual earnings — more than quadruple the multiple at which competitors BMW and Daimler trade.

"Raising capital at a high valuation to fund an even more aggressive push into electric vehicles was always going to be difficult," Proud wrote, adding "Trump deserves only part of the blame."

Despite the global turmoil, Volvo sales in the United States continue to gain strength.

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The company reported U.S. sales of 8,970 vehicles in August — a 12.2 percent increase over the same month a year ago. Through the first eight months of 2018, Volvo has sold 65,214 vehicles in the U.S. — a 32.9 percent increase.

"Our SUV lineup continues to be a driving force, with a 37 percent increase versus August 2017," said Anders Gustafsson, president of Volvo's U.S. division.

The XC60 SUV was the top seller in August with 2,839 vehicles sold, followed by the XC90 SUV at 2,810 sales.

Worldwide, Volvo sold 411,931 vehicles during the first eight months of this year — 14.5 percent better than the same period last year.

Volvo is the anchor tenant at the Camp Hall Commerce Park in rural Berkeley County, with the automaker occupying 1,600 acres and 2.3 million square feet of factory and office space.

In addition to the S60, Volvo will build its XC90 SUV on a second production line at the site beginning in 2021. At full production, the automaker plans to build 150,000 cars annually depending on global demand.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_