China Suspends US Auto Tariffs-P

Marcus Newton
December 17, 2018

The 25 per cent tariff imposed on vehicles as a tit-for-tat measure will be scrapped starting January 1, the Chinese finance ministry said on Friday. President Trump had previously said that China would in return "reduce and remove" tariffs on US cars.

Tesla has reduced the prices of its Model X and Model S vehicles sold in China, after the Chinese authorities suspended additional tariffs on US -manufactured cars for three months starting January 1.

China has announced that it will be temporarily reducing tariffs on USA automobiles down to previous levels.

China's Finance Ministry hopes that the two countries will speed up their negotiations in order to remove all of the additional tariffs on each other's goods. After Mr Trump met President Xi Jinping in Buenos Aires on Dec 1, the U.S. agreed to put off raising the tariff rate on the US$200 billion of imports from 10 per cent to 25 per cent.

The tariff suspension will benefit U.S. auto makers like Tesla and Ford which have seen their China sales tumble amid the trade tensions.

At their meeting in Argentina, Trump and Xi agreed to a temporary truce while they try to negotiate a broad trade deal over the next 90 days.

Earlier this week, China delivered on this promise when it made its first purchase of US soybeans since the escalation of the trade war earlier this year.

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Meng Wanzhou, chief financial officer of telecoms behemoth Huawei, has been released on bail in Canada.

The temporary tax reduction for USA auto imports comes as China heads for its very first annual vehicle sales decline in 28 years amid the trade war and an economic slowdown that's undermining consumption momentum.

Worldwide automakers Daimler, maker of the Mercedez-Benz, and BMW have also exported American-made SUVs to China.

Global automakers Daimler, maker of the Mercedes-Benz, and BMW have also exported American-made SUVs to China.

Trump agreed earlier to suspend planned US tariff hikes due to take effect January 1 on Chinese imports while the two sides negotiate. Six of the top ten vehicles exported from the United States to the world's biggest auto market are from the two German brands, according to forecaster LMC Automotive.

Earlier Friday, China halted extra punitive duties that had been imposed this summer. That would be almost 10 times the $13 billion worth of vehicles the United States exported to China past year.

Other reports by MaliBehiribAe

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