China will steeply cut import tariffs for automobiles and car parts, opening up greater access to the world’s largest auto market amid easing of trade tensions with the United States.
Import tariffs will be cut to 15 per cent from 25 per cent for most vehicles from July 1, the Ministry of Finance said on Tuesday.
It added that adding that 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 per cent currently.
Import tariffs for auto parts would be cut to 6 percent from mostly around 10 per cent, the ministry said in a statement.
The move will be a major boost to overseas carmakers, especially helping premium brands such as Germany’s BMW ,electric car maker Tesla Inc and Daimler AG’s Mercedes-Benz close a price gap on local rivals.
“Benefits are huge for our business, especially Infiniti,” said a Yokohama-based executive at Nissan Motor Co Ltd .Treferring to the Japanese firm’s premium car brand.
Another executive at the firm’s Chinese joint venture said it was “great news” but that the biggest beneficiaries would likely be German luxury carmakers, which also include Volkswagen AG’s Porsche and Audi brands.
“That’s just because of the volume of imported cars they sell,” the person said, asking not to be named.
Toyota Motor Corp said it would adjust retail prices for imported cars that benefited from the lower tariffs to provide Chinese consumers with “competitive” products.
BMW said it would look at its prices and said the move was a “strong signal that China will continue to open up”, while Audi said it welcomed the “further liberalization and opening” of the Chinese market.
A Shanghai-based spokesman for Ford Motor said the U.S. carmaker welcomed the new tariff policies, but declined to comment further.
China’s high tariff on vehicles – versus a 2.5 percent U.S. levy – has been a key focus of U.S. President Donald Trump’s administration amid a simmering trade standoff between Washington and Beijing.
Trump has said the 25 per cent 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 the United States, however, made a breakthrough in trade talks.
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