Volvo Car AB has started to shift manufacturing of Chinese-made electric vehicles to Belgium as the European Union prepares to impose tariffs on China-made EVs, the Times reported.

On top of transferring production of Volvo’s EX30 and EX90 models to Belgium, the carmaker may also move assembly of some Volvo models bound for the U.K., the report said, citing unidentified people. Volvo, which is owned by Zhejiang Geely Holding Group Co., is seen as the most exposed among western automakers to the potential tariffs, the Times said.

Trade frictions between the EU and China have led to a barrage of anti-dumping probes against Beijing amid allegations of unfair subsidies. The EU is expected to tell EV makers in China as early as this week on whether it will impose provisional tariffs from July 4 that would boost import duties above the current level of 10%. 

Volvo Car denied the Times’ report, saying “it’s premature to speculate on the implications of what this investigation will conclude, or any potential measures.”

“The decision to also build the EX30 in Ghent reflects our ambition to build our cars where we sell them as much as possible,” a spokesperson said in an emailed statement. The additional capacity in Belgium had been previously disclosed, according to the company.

China has accused the EU of working to “suppress” Chinese companies and said it will take action to safeguard its interests.

The accusations of unfair competition against China are completely unfounded, Xinhua News Agency reported June 9, citing earlier comments from Commerce Minister Wang Wentao. Wang said he hoped the EU would abandon trade protectionism and return to the path of dialog and cooperation, Xinhua said.

In a separate dispute, Chinese dairy companies are preparing to ask Beijing to open an anti-dumping investigation against imports from the EU, the Global Times reported yesterday, without providing details.