China to reduce 15% of US car tariff

US and China
US and China (photo: Google Screenshot)
By Faith MagbanuaDecember 17th, 2018

China has proposed cutting off tariffs on US-made cars to 15%, the same tax levied on car imports from other countries on Wednesday. 

According to reports from Bloomberg, China's cabinet will review the plans, which would undo the 40% import duty China imposed on US cars this summer.

However, in light of the situation, the timing of the proposal still remains uncertain.  The plan, on the other hand, comes as the two countries restart trade talks.

It was reported earlier this month that US President Donald Trump released a statement saying that China would cut the tariffs as part of the renewed talks.

However, the claim has not yet been confirmed by Chinese officials, sowing confusion.

Tuesday's reports in US media, which were based on anonymous sources including a car industry executive, said China outlined the plan on a recent telephone call between top trade negotiators from the two countries.

Bloomberg, which also cited "people familiar with the matter", said the step was not finalized and could still change.

The office of the US Trade Representative, which is leading the discussions, did not respond to a BBC request for comment.

In a tweet, Trump said the two sides were having "very productive conversations".

China's commerce ministry confirmed that the two sides had spoken. In a statement, it said the conversation concerned "pushing forward the timetable and road map for the next stage of economic and trade consultations work."

Meeting in Argentina

The back-and-forth negotiations is the latest in the trade talks, triggered by US claims that China engages in "unfair" trade practices, such as theft of intellectual property.

The disagreement has prompted the US and China to impose new tariffs on billions of dollars' worth of annual trade this year, measures that have contributed to economic worries in both countries.

Meanwhile, US officials later said they wanted to see China move to reduce the car tariffs "immediately" as a sign that negotiations would proceed in good faith.

However, some analysts remain skeptical that the two sides will be able to reach a resolution of the underlying issues by 1 March.

Those doubts increased after the recent arrest of a high-ranking Huawei official in Canada at the request of the US, which worsened relations between the two countries.

White House officials have maintained that the two matters are separate, but apparent agreements have faltered before.

In May 2018, after talks in Washington, the US agreed to hold off on tariff threats, while China said it would reduce the import duty on foreign cars from 25% to 15%.

However, that deal fell apart within weeks, after President Trump decided to move ahead with tariffs.

In retaliation, China raised the duty on US car imports to 40%, though it proceeded with the lower rate on imports from other countries.


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