Chinese fans of American cars can rejoice – if only for three months – as the extra 25% tariff on autos has been suspended.
Shortly after the U.S. and China declared a truce, China put forth a goodwill gesture, announcing it will temporarily suspend additional 25% tariff on U.S.-made vehicles and auto parts starting Jan. 1, 2019.
The 25% tariff came oddly enough just after China reduced the levy to 15% earlier this year, but when President Donald Trump decided to increase tariffs on China, the country immediately pushed it back up to 40%.
The Ministry of Finance, in a statement on its website, the two sides can expedite talks to remove all additional tariffs on each other’s goods. For now, the suspension will last for three months. The impact in some places was immediate.
Tesla Inc. reduced the price of its Model S and Model X vehicles in China, while auto executives expressed renewed optimism about the ongoing discussions between the two sides.
(White House tells automakers China tariffs coming down. Click Here for the story.)
President Donald Trump expressed pleasure by the move by the Chinese to reduce its tariffs on autos for three months.
“We applaud both governments for working together constructively to reduce trade barriers and open markets,” said Joe Hinrichs, president of Ford Motor Co.’s global operations.
Wang Cun, director of the China Automobile Dealers Association’s import committee, joined Hinrichs in his pleasure with the move.
(Click Here to see the Trump administration walk back its tariff claims.)
“This is a good signal that China and the United States are on track to solve the trade war,” he said. “Car makers might be ordering a large number of imported cars now.”
Naturally, U.S. President Donald Trump welcomed the announcement.
(To see more about Volvo potentially adjusting its manufacturing plans in South Carolina, Click Here.)
“China just announced that their economy is growing much slower than anticipated because of our Trade War with them. They have just suspended U.S. Tariff Hikes,” Trump said in a tweet. “U.S. is doing very well. China wants to make a big and very comprehensive deal. It could happen, and rather soon!”