China’s Finance Ministry has announced to slash import tariffs for automobiles and car parts thus opening up greater access to the world’s largest auto market amidst easing of trade tensions with the US.
The government will cut down imports to 15% from 25% which will be effective from 1 July as an effort to open up China’s markets and spur development of the local auto sector, as reported by Ministry of Finance.
Interestingly, China had said last month that it would announce a timeline to remove long-standing caps on foreign ownership of automotive ventures by slashing auto tariffs soon. This move will particularly prove beneficial for overseas carmakers especially those that import premium-end cars to China like Tesla Inc, Daimler AG’s Mercedes-Benz and Germany’s BMW.
China’s High Auto Tariffs vs US 2.5% levy was one of the key topics of ongoing trade turbulence between the countries. President Trump had said that 25% tariff amounted to “stupid trade”, on the other hand, auto players such as Tesla had cited that such restrictions led to a skewed playing field.
However, last week a breakthrough was witnessed when leaders from both parties held negotiations in Washington thereby easing of ongoing trade war tensions and agreeing to have talks that would further boost US exports to China.