Automakers are rallying after China says it will reduce tariffs on US cars
- China said Tuesday it will lower the tax on imported vehicles to 15% from 25%.
- Automaker stocks were up as much as 2.6% on the news.
American automakers are rallying after China said it would cut tariffs on most imported vehicles from 25% to 15% starting July 1.
- Fiat Chrysler: +2.6%
- General Motors: +1.1%
- Ford: +0.8%
- Tesla: +0.9%
China's Finance Ministry said Tuesday the average tax will be 13.8% going forward. The move was originally announced last month in order to open the world's largest auto market to foreign companies. It will also remove long-standing caps on foreign ownership of automotive ventures, Reuters reported.
The new rate is still substantially higher than the 2.5% tax levied on foreign vehicles by the United States. The US exported $10.53 billion worth of passenger cars to China in 2017, according to census data.
President Donald Trump said in April that the higher Chinese tariffs on US cars amounted to "stupid trade," asking "does that sounds like free or fair trade? No."
In Germany, shares of BMW were up about 2.3% and Daimler AG, which owns Mercedes-Benz, was up 1.3%.