U.S. President Donald Trump said China had agreed to cut import tariffs on American-made cars, buoying shares in BMW and Daimler AG who manufacture in the United States for export to the world’s biggest auto market.
Shares of Chinese car dealers also perked up on hopes that such a move could revitalize the domestic auto market that is poised for its first annual sales contraction in decades amid cooling economic growth and a debilitating U.S.-China trade war.
Trump, fresh from agreeing to a 90-day cease-fire in his trade war with China at the meeting of the G20 nations, said on Twitter “China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.”
The move, if realized, would bolster U.S. carmakers who were hit hard when China ramped up that tariff in July as part of a broad package of tariffs meant to retaliate for tariffs that Trump imposed on Chinese goods.
“If they cancel the extra 25 percent tariff on U.S.-made cars, then we will see positive signs for imported cars,” Wang Cun, director of the China Automobile Dealers Association’s import committee, told reporters in Beijing.
The tariff forced many carmakers to hike prices in a major hit to the roughly $10 billion worth of passenger vehicles the United States sent to China last year.