Shanghai/Beijing: China will steeply cut import tariffs for automobiles and car parts, the country’s finance ministry said on Tuesday, opening up greater access to the world’s largest auto market amid an easing of trade tensions with US.
Import tariffs will be cut to 15% for most vehicles from 25% from 1 July, the Ministry of Finance said in a statement, adding this was part of efforts to open up China’s markets and spur development of the local auto sector. A small number of imported trucks are taxed at 20% currently.
China pledged last month to open up its auto market, announcing a timeline to remove long-standing caps on foreign ownership of automotive ventures and saying it would cut tariffs on imported cars soon. The move will boost overseas carmakers, especially those that import premium-end cars to China such as Germany’s BMW , electric car maker Tesla Inc and Daimler AG’s Mercedes-Benz.
Import tariffs for auto parts would be cut to 6% from mostly around 10%, the ministry said.
China’s high tariff on vehicles—versus a 2.5% US levy—has been a key focus of US President Donald Trump’s administration amid a simmering trade standoff between Washington and Beijing. Trump has said previously the 25% tariff amounted to “stupid trade”, while auto industry leaders such as Tesla’s Elon Musk have said that Chinese restrictions on foreign auto makers created a skewed playing field.
China and US, however, made a breakthrough in trade talks after negotiations in Washington last week, stepping back from the brink of a global trade war and agreeing to hold further talks to boost US exports to China.livemint