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Trump says China to cut tariffs on U.S.-made cars in potential lift for Tesla, BMW

Reuters  |  WASHINGTON/SHANGHAI 

By and Jourdan

WASHINGTON/(Reuters) - said on Sunday that had agreed to cut import tariffs on American-made cars, a potential boon for automakers including and who manufacture in the for export to

Trump, fresh from agreeing a 90-day cease-fire in his trade war with at the meeting of the G20, said on that "China has agreed to reduce and remove tariffs on cars coming into China from the Currently the tariff is 40%."

The move, if realized, would bolster who were hit hard when China ramped up levies on U.S.-made cars in July as part of a broad package of retaliatory tariffs amid a sprawling trade war between and

China, the world's largest auto market, raised tariffs on U.S. auto imports to 40 percent in July, forcing many carmakers to hike prices in a major hit to the roughly $10 billion worth of passenger vehicles the sent to China last year.

That put U.S.-made like Tesla and Ford Motor Co's at a major disadvantage, soon after China slashed auto import tariffs broadly to 15 percent for most vehicles.

Trump's tweet did not give any further detail about the tariff cuts, such as when the deal had been reached or a new level for the Chinese levies.

The and U.S. Trade Representative's (USTR) office did not immediately respond to a request for comment late on Sunday. China's commerce and did not respond to requests for comment on Monday.

After a 2-1/2 hour dinner with Xi on Saturday in Buenos Aires, Trump agreed to postpone an increase in the tariff rate on $200 billion worth of Chinese imports to 25 percent from 10 percent that was scheduled for Jan. 1. China agreed to resume purchases of some U.S. farm and

The two sides also agreed to negotiate during the next 90 days over "structural changes" to China's policies on technology transfers, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture.

said they were unaware of the lower tariffs on exports to China. The automakers have a previously scheduled meeting with USTR on Monday, two people briefed on the matter told

The lower tariffs would be a boost to automakers exporting vehicles to China, including Ford and German carmaker BMW, which exports U.S.-built luxury vehicles to China.

It would also be good for Tesla, which has been hit hard by increased tariffs on the electric cars it imports to China. The U.S. firm has said it will cut prices to absorb more of the tariffs and is building a local plant in

While China had lowered its general tariff rate for imported cars to 15 percent from 25 percent this year, it had slapped on a 25 percent punitive tariff on American-made vehicles, bringing the rate back up to 40 percent. The currently charges tariffs of 27.5 percent on Chinese vehicles.

On Wednesday, U.S. said Trump had directed him to examine all available tools to raise U.S. tariffs on Chinese vehicles to the level that China is charging.

(Reporting by in and in SHANGHAI; Additional reporting by and Yilei Sun; Editing by and Christopher Cushing)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, December 03 2018. 12:48 IST
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