China is reportedly preparing to lower tariffs on U.S. auto imports, a key concession in trade talks between the two countries and one that President Trump signaled would occur earlier this month.
Stocks for the major U.S. automakers jumped on Bloomberg’s report that China is moving to trim its duties on car shipments to 15 percent, down from the current 40 percent. General Motors rose 3.1 percent to $35.48 in pre-market trading in New York, while Ford Motor Co. added 3.2 percent to $8.79 and Toyota increased slightly to $120.94.
Bloomberg, citing people familiar with the matter, said the decision is not yet final. While Beijing previously lowered tariffs on all auto imports into the country, it raised the duties on U.S. shipments amid an intensifying trade dispute. Trump had said China would change course on the punitive levies after he agreed to a 90-day trade detente during talks with President Xi Jinping.
While White House officials are optimistic a deal can be reached in that time frame, the Trump administration says it’s prepared to add tariffs on an additional $267 billion in Chinese goods, as well as raise duties on an existing $200 billion in products from 10 percent to 25 percent.
China’s move could predominantly benefit German carmakers, given that most U.S. companies do the bulk of their production for the country via partnerships with local businesses, experts previously told the Washington Examiner.
“U.S. auto manufacturers, they’re not shipping much to China right now, and China is a very small percentage of their overall profits,” said Garrett Nelson, senior equity analyst at investment research firm CFRA.
Stock for BMW and Daimler AG, which owns Mercedes-Benz, both rose in trading in Frankfurt. Shares for Tesla, which ships vehicles from the U.S. to China, increased 1.96 percent to $372.30 in pre-market trading.
