U.S. President Donald Trump said China has agreed to “reduce and remove” tariffs on American cars from 40 percent currently.
He gave no other details in the late-night tweet, which came shortly after he agreed with President Xi Jinping to a temporary truce in an ongoing trade war during a meeting at the Group of 20 summit in Argentina. China hasn’t made a similar announcement on auto tariffs.
Any move to reduce or eliminate the additional tariff is a boon for carmakers such as Tesla Inc., BMW AG and Daimler AG, who all produce cars in the U.S. and import to China. Additional duties have slowed sales of imported vehicles in China, the world’s biggest automobile market, which is poised for its first decline in more than two decades.
Trump last week ordered a separate review of China’s 40 percent tariff on auto imports from the U.S., 25 percentage points of which is the result of Chinese retaliation against Trump’s own tariffs on imports from China. The U.S. currently charges a 27.5 percent tax on imported cars from China.
China said last week that tariffs on U.S. 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 U.S. car imports before Xi met Trump in Argentina, according to a person familiar with the situation who asked not to be identified. The magnitude and timing of such a reduction were unclear, the person said.
Of China’s $51 billion of vehicle imports in 2017, about $13.5 billion came from North America, including sales of models made there by non-U.S. manufacturers like BMW. China imported 280,208 vehicles, or 10 percent of total imported cars, from the U.S. last year, according to China’s Passenger Car Association.
U.S. exports of cars and light trucks to China were worth $9.5 billion in 2017 and have dropped off significantly since China imposed its retaliatory tariffs over the summer that gave exporters in Europe and Japan a significant advantage.
