The Swedish ambassador to the United States of America has used the launch of Volvo’s new factory in Charleston, South Carolina to call for an end to the escalating trade row between the US and Europe.

Karin Olofsdotter highlighted the new factory, Volvo’s first US plant, as the latest step in the strong links between Sweden and the US. The plant will be the sole global production site of the new S60, which will be exported for sale in Europe and China.

But she admitted that US President Donald Trump’s threat to introduce tariffs - and a possible response from the EU and other countries - was a concern.

“Europe and the US are the best of friends in the world and should really be working together to solve the world’s problems,” said Olofsdotter. “We should be forming bonds that make us stronger, not pushing us apart.”

Trump threatened to slap car imports to his country with a 25 percent tariff last month, shortly after China had confirmed it was going to lower its tariff rate from 25 percent to 15 percent.

The American president said in a tweet earlier this year that he could "simply apply a Tax on [European] Cars which freely pour into the US", in a move he said would counter a current "Big trade imbalance".

America is the largest export market for cars built in the EU. Statistics show that £171 billion (Rs 15 lakh crore) worth of cars were exported from the EU last year, with the US the destination for 25 percent of them. Of those cars, just more than half were exported by German car makers.