China agrees to cut tax on US-made cars: Trump

FE Team | Published: December 03, 2018 23:34:24

WASHINGTON/SHANGHAI, Dec 03 (Reuters): US President Donald Trump said China had agreed to cut import tariffs on American-made cars, buoying shares in BMW and Daimler AG who manufacture in the United States for export to the world's biggest auto market.
Shares of Chinese car dealers also perked up on hopes that such a move could revitalize the domestic auto market that is poised for its first annual sales contraction in decades amid cooling economic growth and a debilitating US-China trade war.
Trump, fresh from agreeing a 90-day cease-fire in his trade war with China at the meeting of the G20, said on Twitter "China has agreed to reduce and remove tariffs on cars coming into China from the US Currently the tariff is 40 per cent".
The move, if realised, would bolster US carmakers who were hit hard when China ramped up levies on US-made cars in July as part of a broad package of retaliatory tariffs amid the sprawling trade war between Washington and Beijing.
"If they cancel the extra 25 per cent tariff on US-made cars, then we will see positive signs for imported cars," Wang Cun, director of the China Automobile Dealers Association's import committee, told reporters in Beijing.
Beijing raised tariffs on US auto imports to 40 per cent in July, forcing many carmakers to hike prices in a major hit to the roughly $10 billion worth of passenger vehicles the United States sent to China last year.
That put US-made car brands like Tesla Inc and Ford Motor Co's Lincoln at a major disadvantage as the move came soon after China slashed auto import tariffs for the wider market to 15 per cent from 25 per cent. Trump's tweet did not give any further detail about the tariff cuts, such as when the deal had been reached or a new level for the Chinese levies.
The White House and US Trade Representative's (USTR) office did not immediately respond to a request for comment late on Sunday. China's commerce and finance ministries did not respond to requests for comment on Monday.