Volvo Car AB slightly lowered its auto-sales forecast for this year due to the potential impact of the European Union’s trade row with China over support for its electric-vehicle industry.

The Chinese-owned manufacturer now sees retail sales growing 12% to 15%, from a previous projection of at least 15%, it said Thursday. Volvo Car’s second-quarter operating profit beat expectations on robust demand for its EVs and plug-in hybrids.

The company has been caught in the crossfire of the spat with Beijing over subsidies for its EV makers. Owned by China’s Geely, Volvo Car makes electric models in the Asian country and may be hit with tariffs.

The manufacturer adjusted its forecast because of “the uncertainty around those trade tariffs and how that may affect demand,” Chief Executive Officer Jim Rowan said in an interview. “We are still aiming for the high end of that range.”

Volvo Car rose as much as 7.4% in Stockholm. The shares are up around 14% this year.

While Volvo Car has been benefiting from robust demand for its EX30 electric sport utility vehicle that’s made in China, rising trade barriers have slowed its expansion.

Last month, Volvo Car said it would postpone US shipments of the model after Washington imposed a duty of more than 100% on Chinese EV imports. In a move expected to circumvent US and EU tariffs, the company will start producing the compact SUV at its Ghent, Belgium plant next year.

Volvo Car in June started production of its flagship electric EX90 SUV outside Charleston, South Carolina, with first customer deliveries scheduled for the third quarter.

Aside from the trade issues, the company had a strong second quarter. Operating income in the period rose to 8 billion kronor ($758 million) as the automaker remained disciplined on prices and costs. Analysts had expected 6.6 billion kronor.

“We have a good pricing position in the markets right now,” Rowan said in a separate interview with Bloomberg Television.