Trump-China trade war: Volvo officially cancels IPO

The
Volvo IPO is officially off.
Volvo

• Volvo, the Swedish automaker, has confirmed plans to
  shelve an IPO potentially worth $30 billion, having previously
  blamed President Donald Trump’s trade war for postponing the
  share sale.
• “There are no plans or time schedule for entering into
  the equity market,”
  Hakkan Samuelsson, Volvo’s chief executive said at the Los
  Angeles Auto Show.
• Volvo’s IPO was initially scheduled for September, but
  was postponed by the firm’s parent, Geely.

Volvo, the Swedish automaker, has confirmed plans to shelve
an IPO potentially worth $30 billion, having previously blamed
President Donald Trump’s trade war for postponing the share
sale.

“There are no plans or time schedule for entering into the
equity market,”
Hakkan Samuelsson, Volvo’s chief executive said at the Los
Angeles Auto Show, according to Reuters. He added that the
Swedish firm was not looking to raise money through bonds at the
present moment.

Samuelsson’s confirmation comes
around three months after Volvo’s IPO was initially
scheduled, only to be postponed by Geely, the Chinese
auto giant which owns Volvo.

It paused plans for an IPO that valued Volvo at $30 billion
because it was 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,” Samuelsson said at the time.

Read more:
Lost jobs, shrinking growth, and rotting crops — here are the
ways Trump’s trade war is hurting America

In September, Geely said it had secured the backing of
investors,
but was reportedly 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.

Trump’s trade war, however, appears to have derailed the
listing, with the threat of auto tariffs looming large over the
car manufacturing sector. Trump has previously threatened
to impose a 25% tariff on all autos and auto parts
coming into the US to extract concessions from trading partners
including the European Union and Canada.

He is yet to follow through on such threats, but earlier in
November it was reported that
the White House was circulating a report discussing the prospect
of auto tariffs.

The trade war is at a crucial juncture, with Trump and
Chinese Xi Jinping set to meet at this weekend’s G20 summit in
Buenos Aires, Argentina. The pair are hoping to strike some form
of agreement on trade, which would prevent the US raising tariffs
from their current 10% level to 25%.

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.