China on Tuesday said it will reduce tariffs on auto imports as heated trade tensions with the U.S. seem to cool.
The levy on passenger cars will fall from 25 to 15 percent on July 1, China's Finance Ministry said, according to Bloomberg. Duties on car parts will also be reduced to six percent.
The 25 percent duty had been in place for more than a decade, according to Bloomberg.
The reduction in auto tariffs seems to be in response to a truce between President TrumpDonald TrumpCapitol fencing starts coming down after 'Justice for J6' rally Netanyahu suggests Biden fell asleep in meeting with Israeli PM Aides try to keep Biden away from unscripted events or long interviews, book claims MORE and Chinese trade officials as the world's two largest economies seek to avert a trade war.
After meetings with a Chinese delegation last week, Treasury Secretary Steven MnuchinSteven MnuchinMenendez, Rubio ask Yellen to probe meatpacker JBS The Hill's Morning Report - Presented by Goldman Sachs - Biden rallies Senate Dems behind mammoth spending plan Mnuchin dodges CNBC questions on whether Trump lying over election MORE said Sunday that the U.S. is putting the trade war "on hold," as Trump has backed off from slamming China with up to $150 billion in tariffs.
During the negotiations, the Chinese pledged to increase purchases of American agricultural products, which were originally targeted in its reciprocal tariffs planned on U.S. imports. The foreign trade officials also signaled an openness to "substantially" reduce its trade deficit with the U.S., a key demand of Trump's, but did not commit to any specific dollar amounts.
The tariff reduction should be a boost for U.S. automakers such as Tesla and Ford and should boost other automakers worldwide including Toyota and Daimler AG, according to Bloomberg.