Late on Sunday President Trump tweeted the announcement to the United States that China has agreed to cut tariffs on automobiles imported from the US which currently stand at 40%. Detail on the timing and level of reduction are somewhat vague at this point.
This information comes after Saturday’s announcement was made that President Trump and Chinese President Xi Jinping will hold off on further tariffs in the trade war between the two countries for the next 90 days. During this time, American and Chinese officials will continue to negotiate through their disagreements on technology transfer, intellectual property and agriculture.
"Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%," the statement added from the White House. The White House Administration has threatened to double the tariffs on already slapped $250 billion worth of Chinese imports, while the Chinese government has targeted tariffs on $110 billion in US goods. This continues to raise fears among businesses that the global economy could be dragged down by the standoff between both economies.
In April of this year, President Xi made the announcement to cut auto tariffs on imported cars which he followed through three months later by reducing them from 25% to 15%. Unfortunately he imposed new tariffs of 40% on American made passenger vehicles shortly thereafter.
Any reduction in tariffs “is very good news for some niche products,” said Yale Zhang, the managing director of Automotive Foresight, a Shanghai consulting firm. “The international giants have already localized most of their mass production cars.”
At this point it is unclear if the tariffs on US cars will be completely eliminated or just reduced.