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Bloomberg
President Donald Trump said in a tweet that China has agreed to “reduce and remove†tariffs on imported American-made cars, a claim that wasn’t immediately confirmed by Beijing.
Trump gave no other details in his post, which came shortly after he agreed with Chinese President Xi Jinping to a truce in the trade war during a meeting at the Group of 20 summit in Argentina. The move, if verified, would hand automakers from Tesla Inc to Daimler AG and BMW AG with factories in the US a potential reprieve after higher import levies hit sales in the world’s biggest car market.
China, which has hiked the tariff on US-made cars coming into the country to 40 percent amid the trade fight, hasn’t made a similar announcement on auto tariffs.
China had said that tariffs on US autos would be 15 percent if not for the trade dispute, and it called for a negotiated solution. Chinese officials discussed the possibility of lowering tariffs on US car imports before Xi met Trump in Argentina, according to a person familiar with the situation who asked not to be identified. But the magnitude and timing of such a reduction were unclear, the person said.
The trade war has taken a toll on car companies that manufacture in the US, with the makers of Mercedes-Benz and its rival BMW both warning of lower profits this year as tariffs forced them to hike prices in China. Car sales in the world’s second-biggest economy declined for a fifth consecutive month in October, bringing the market closer to its first annual drop in at least two decades. That has piled pressure on auto companies that have relied on the country for growth amid declining car sales in the US.
Chinese carmaker shares pared gains, while shares of auto dealerships in China and Hong Kong rallied on Trump’s tweet. China Grand Automotive Services Co, which sells various car brands and provides auto financing, surged by the 10 percent daily limit in Shanghai.
“If China cancels tariffs on high-end imported cars, that should benefit dealerships as the prices will be lower,†said Angus Chan, a Shanghai-based analyst with Bocom International.