China is moving toward cutting its trade-war tariffs on imported US-made cars, a step already claimed by President Donald Trump as a concession won during trade talks in Argentina, according to Bloomberg.
A proposal to reduce tariffs on cars made in the US to 15% from the current 40% – bringing the US back in line with what other countries pay – has been submitted to China's cabinet to be reviewed in the coming days, sources familiar with the matter told Bloomberg which noted shares of carmakers including Daimler, Ford and Tesla rose on the news.
Go deeper with GlobalData
The step hasn't been finalised and could still change, Bloomberg cautioned. While reversing the retaliatory duty is a major climb-down by Beijing, it could re-focus the two sides toward implementing the trade-war truce agreed earlier this month. Relations have since been shaken by the arrest of Huawei Technologies chief financial officer Meng Wanzhou in connection with sanctions violations.
"Last week, events seemed to conspire to throw the truce into disarray, but the underlying incentives of both sides at the moment are to try to maintain that truce," Freya Beamish, chief Asia economist at Pantheon Macroeconomics, told Bloomberg.
"Now we are seeing the possibility that China will come through with reductions of tariffs on US autos and that's another good, concrete step."
Bloomberg said top Chinese and American trade officials spoke by phone on Tuesday, signaling that dialogue between the two nations on trade issues is at least continuing despite the ongoing tension over Huawei.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataIn July, China had boosted the tariff on American-made cars to 40% as part of retaliatory measures against the US Following a summit on trade in Buenos Aires earlier this month, Trump jolted global auto stocks with a tweet that China agreed to "reduce and remove" tariffs on imported American-made cars, something China did not confirm at the time.
Trump's tweet came shortly after he agreed with Xi to a truce in the trade war during a meeting at the Group of 20 summit in Argentina, Bloomberg said.
