US President Donald Trump says China has agreed to cut tariffs on cars it imports from the United States.
Trump made the announcement in a tweet late Sunday in the United States, saying Beijing will "reduce and remove" the tariffs, which currently stand at 40%. He didn't specify when the change would happen or what the new tariff level would be.
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White House adviser Larry Kudlow, director of the National Economic Council, said Monday that no agreement had been reached on what the new tariff would be, but he expected levies to plummet.
"We don't yet have specific agreement on that," Kudlow told reporters. "We expect those tariffs to go to zero."
Kudlow added that Chinese negotiators told the United States they would move "immediately" to remove tariff and non-tariff barriers without offering specifics on what sectors would be affected, but said he believed it would be tied to automobiles.
Chinese Foreign Ministry spokesman Geng Shuang declined to comment Monday on Trump's statement, referring questions to "the relevant authorities." The Chinese Commerce Ministry, which typically makes announcements regarding tariffs, didn't respond to a faxed request for comment.
Trump's tweet comes after he and Chinese President Xi Jinping agreed on Saturday to hold off on further tariffs in the trade war between the two countries for the time being. But the Chinese government has made no mention of cutting car tariffs as a result of the meeting between the two leaders in Buenos Aires.
Xi announced in a speech in April that China would cut tariffs on imported cars this year. His government followed through on that promise three months later, reducing them from 25% to 15%.
But just days later, it imposed new additional tariffs of 25% on American-made passenger vehicles, one of the groups of products it targeted early in the trade war with the United States.
The move has hurt the profits of major automakers like BMW (BMWYY) and Daimler (DDAIF), the owner of Mercedes-Benz. The German companies both ship SUVs to China from manufacturing plants in the United States.
Shares in BMW jumped more than 6% on Monday morning in Frankfurt following Trump's tweet, while Daimler's stock leaped more than 5%.
Tu Le, the head of research firm Sino Auto Insights, highlighted the lack of specifics in Trump's tweet.
It's unclear whether the tariffs on US cars will be eliminated entirely or just reduced, Le said, adding that there's no information on the time frame for the changes or which types of vehicles would be affected.
If the tariffs are removed altogether, it would be "much more advantageous" for the German carmakers rather than US brands, he said.
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