South Korea plans to lower taxes on medium and large-sized cars from 2004, Reuters reported, citing the country’s Finance Ministry.

The move would also mean lower prices for imported cars, Reuters added.

Reuters said that, after two days of trade talks with the United States that ended on Thursday, the ministry said it decided to accept US demands to simplify excise taxes on cars, capping them at a maximum 10% from the previous 14% for large-sized vehicles.

“We will simplify the current three-tier excise tax system to a two-tier system,” the ministry said, according to Reuters.

Reuters said Washington has long pressed South Korea to lower its 8% tariff on imported cars to the 2.5% applied in the US.

Imported cars are currently subject to an additional seven to 14% excise tax the government levies on all cars sold in South Korea according to their engine capacity, Reuters said.

But the ministry said the tariff issues should be discussed at the World Trade Organisation level, Reuters said.