China to cut US car tariffs 25pc, vows to buy American farm produce
BEIJING has agreed to bring down tariffs on cars imported from the US, as well as increase purchases of American agricultural goods, a move that could bring the two sides closer to agreeing a longer-lasting trade war cease fire
BEIJING has agreed to bring down tariffs on cars imported from the US, as well as increase purchases of American agricultural goods, a move that could bring the two sides closer to agreeing a longer-lasting trade war cease fire.
Cars shipped into China from the US will be subject to 15 per cent tariffs, down from the existing 40 per cent, sources briefed on the matter told the Wall Street Journal. This rate would be in line with the duties faced by vehicles from all other countries, after China slashed auto tariffs in July.
Chinese Vice Premier Liu He confirmed the move after a call with US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer. No details were given, however, on the timing of the tariff cuts.
US President Donald Trump tweeted afterwards that 'very productive conversations' were ongoing with China and followers should 'watch for some important announcements!'
China's Commerce Ministry, meanwhile, said that the conversation will help both sides 'push forward with next steps in a timetable and road map' for coming negotiations.
Separately, London's Financial Times reported that Chinese car sales fell for the fifth consecutive month in November as cutbacks of state subsidies and weaker consumer sentiment continue to drag on the world's largest auto market.
Sales fell 14 per cent year on year according to the China Association of Automobile Manufacturers, the largest drop since 2012.
'Since June, every month was worse in the total market, and this continues in November,' said the CEO of Volkswagen, the largest foreign auto brand in China. VW, despite being one of the few companies set for a sales increase this year, forecast China's total passenger car market to contract by 4-5 per cent on an annual basis.
This is the first year in which the Chinese car market has shrunk in almost three decades. Analysts say sales have been dented by the halting of government tax rebates that provided a windfall in 2016-17, as well as a gloomier macroeconomic outlook.
'With the housing market being almost entirely frozen, liquidity becomes a big issue for many Chinese people. There's a growing tendency to put consumption on hold due to uncertainty about the future,' Thomas Fang, partner at Roland Berger, told the FT.