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Extra tariff on US autos to be suspended

By CHEN JIA/JING SHUIYU | China Daily | Updated: 2018-12-15 07:08
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China will suspend for three months additional tariffs placed on US-made vehicles and auto parts as a concrete measure to implement the consensus reached by the two countries' leaders in Buenos Aires this month, the State Council's Tariff Commission Office announced on Friday.

The measure, from Jan 1 to March 31, will postpone 25 percent tariffs on 144 taxable items and 5 percent tariffs for 67 items. The tariffs were imposed on US-made vehicles and auto parts in the summer, according to a statement on the Ministry of Finance website.

The measure may expand imports of some goods needed by the market as well as helping to meet domestic households' demand, the statement said.

The ministry also said it is hoped China and the US can speed up negotiations to remove all additional tariffs on each other's goods.

President Xi Jinping and his United States counterpart, Donald Trump, agreed on the sidelines of the G20 summit in Buenos Aires on Dec 1 to continue bilateral trade negotiations, stop the imposition of new tariffs and exchange visits at an appropriate time.

They agreed to a truce that delayed additional US tariff increases on $200 billion worth of Chinese goods starting on Jan 1.

Mei Xinyu, a researcher at the International Trade and Economic Cooperation Institute at the Ministry of Commerce, said the move was to implement the consensus reached between the two leaders.

China is implementing the consensus to show confidence in achieving a good result after further negotiations, Mei said.

China cut tariffs on some imported vehicles and auto parts on July 1 by an average of 46 percent as a measure of further opening-up and to promote domestic consumption.

After the July tariff reduction, the average tariff on cars was 13.8 percent, and 6 percent for auto parts, according to the Ministry of Finance.

But after the United States raised its tariffs on Chinese vehicles and parts to 27.5 percent, China hiked its tariffs on US autos and parts.

Chen Junbin, a research fellow at CITIC Securities, said when the tariff suspension takes effect, US auto sales in China may gradually rebound from the plunge sales took in the first three quarters.

The country's auto industry is expected to continue to open up, Chen wrote in a recent report.

The market share of imported cars in China is expected to rise to 8 percent in the long run, and their annual sales may exceed about 2 million units, he added.

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