What Volvo Drivers Need To Know About Auto Tariffs In 2025

The news has been brimming with phrases such as "auto tariff" over the last month or so at the time of this writing. Policy is moving fast, with tariffs being imposed and revoked as negotiations take place. It can be difficult to track the latest developments and suss out what they mean for you and your family.

The Volvo Cars of Virginia Beach staff does not make any claim to economic expertise. We cannot say what the recent slew of reciprocal tariffs will bring for the agricultural sector, for example. What we do feel qualified to talk about, however, are the U.S. auto tariffs.

We'll start by discussing what tariffs are – and who pays them. Then, we'll detail the current state of play for auto tariff measures in the United States. Finally, we will lay out how these new policies may impact you on your car-buying journey.

What Are Tariffs, and How Do They Work?

Whether we're discussing an auto tariff or one aimed at battery components, the core function is the same. A tariff is a tax imposed by a government (or similar entity, e.g., the European Union) on an imported good. This tax can be structured in different ways; the most common is a percentage of the item's assessed value. One common question about this is: Who pays a tariff?

The company or organization that imports a given product is responsible for paying the tax to the given government. In our case, this means that Volvo Cars' American subsidiary has to handle the new 25% automotive levy and any other additional measures. As you can imagine, this can lower profits or even push a company into the red. As a result, the final costs of tariffs are often passed on to customers in the form of raised prices.

There are arguments for and against tariffs. Some argue that they raise prices without a commensurate gain for domestic industries. Others say that tariffs can protect American companies from unfair foreign competition; in the medium- and long-term, these people contend, tariffs end up having a beneficial impact on domestic industry.

The effects of car tariffs and similar measures can take years to come into full view. It's difficult for expert economists, let alone our team, to forecast the effects of these policies. Whatever your opinion on the matter, the general consensus is that the recent reciprocal and auto tariff spree will raise prices for American consumers in the short term, at the least.

Volvo Tariff Impacts

Many Volvo vehicles are imported into the United States and are subject to the new 25% tariff on automobiles that was introduced in early April of 2025. These measures will raise the price of Volvo automobiles because the business cannot absorb these new costs without folding.

Our team does not want to raise prices – we will not be raking in new profits, after all. Instead, the auto tariff measures are perhaps best imagined as a fresh domestic tax that is ultimately paid, at least in part, by drivers in our community and the rest of the country.

Volvo Cars is doing what it can to reduce the impact of the car tariffs on consumers, but changing a multinational business strategy is not an overnight process. That said, we'll discuss some of the potential next steps being taken below.

Volvo Cars' Tariff Strategy

It has been rumored that Volvo Cars may shift additional production to its plant in South Carolina. Vehicles produced in this facility will be able to avoid some of the tariffs that have recently been announced. They will not be able to escape their effects entirely, however: The reciprocal tariffs cover a range of raw materials and vehicle components used in the manufacturing process.

Automotive manufacturers want to avoid major price increases, but the matter is largely out of their hands. Their businesses cannot absorb new 25% tariffs on imported vehicles or the other price increases for car parts and components. As a result, some of these new costs will be taken on by consumers.

There are ways for you to steer clear of some or all of these price increases – read on to learn about your options.

U.S. Auto Tariffs and You

Since the auto tariff measure has already come into force, price increases are already being discussed. One of the best ways to escape these increased costs is to invest in a new vehicle now. The cars that have been on our lot since before these new policies were announced will not see a 25% price increase – if you get behind the wheel of one of these models soon, you can insulate yourself from the new car tariffs.

Our current Volvo inventory includes several dynamic options as of this writing. Whether you're interested in a sleek sedan for your daily commute, a spacious SUV for weekend adventures, or a wagon with ample cargo room, there's a model for you in the Volvo stable.

One popular choice is the Volvo XC60. This two-row luxury SUV comes standard with numerous luxuries, including heated front seats. You can choose between the mild-hybrid Volvo XC60 and the Volvo XC60 Plug-In Hybrid, which relies on the T8 AWD powertrain. This setup provides 455 horsepower, 523 pound-feet of torque, and a thrilling 4.5-second 0-60 time.

Drivers with larger families are often interested in the Volvo XC90. This three-row luxury SUV can seat up to seven people in peerless comfort. With a standard panoramic roof, wireless charging, and a genuine crystal gear shift knob, the Volvo XC90 is a paragon of Scandinavian minimalist refinement. It is also available as a mild- or plug-in hybrid.

Automotive Solutions You Can Take

If you want to evade the impact of the new auto tariff regime, it's a good plan to buy a car as soon as possible. Our new Volvo specials can make this a more manageable undertaking.

The friendly team here at Volvo Cars of Virginia Beach is ready to answer any remaining questions about the new U.S. auto tariffs, help you apply for financing, and otherwise assist you with your automotive needs. We look forward to seeing you at our dealership soon.

Frequently Asked Questions

Will auto tariffs increase the price of a new Volvo vehicle?

The new car tariffs will require the company that imports Volvo automobiles into the United States to pay 25% of the car's value as a levy to the government. While this is not a legally mandated price increase, the reality of the matter is that some of this cost is likely going to be passed on to the consumer as a result.

Are Volvo cars affected by U.S. auto tariffs?

Many Volvo automobiles will be affected by the new auto tariff ruling. Volvo Cars does produce some vehicles in South Carolina, but even these models typically use parts and raw materials that have been imported, which means they may be subject to other recent tariffs. This is a problem faced by every player in the automotive industry. Please contact us to learn more.

How can I find out if the Volvo car I want will be impacted by tariffs?

One of the best ways to learn about the effect of the new tariff policy is to reach out to the expert staff here at Volvo Cars of Virginia Beach. While we are not economists, we are familiar with the effects of the car tariffs because they are so important to our business. We welcome your questions about tariffs – and how to avoid the coming price increases.

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