China slashes auto tariffs to 15%

Tesla, BMW, Daimler seen as beneficiaries of lower duties; Beijing, Washington near deal on reprieve for ZTE

China will steeply cut import tariffs for automobiles and car parts, opening up greater access to the world’s largest auto market amid an easing of trade tensions with the United States.

Import tariffs will be cut to 15 per cent from 25 per cent for most vehicles from July 1, the Ministry of Finance said on Tuesday, adding this was part of efforts to open up China's markets and spur development of the local auto sector. A small number of imported trucks are taxed at 20 per cent currently.

Import tariffs for auto parts would be cut to 6 per cent from mostly around 10 per cent, the ministry said in a statement.

The move will be a major boost to overseas carmakers, especially helping premium

brands such as Germany's BMW , electric car maker Tesla Inc and Daimler AG’s Mercedes-Benz close a price gap on local rivals.

“Benefits are huge for our business, especially Infiniti,” said a Yokohama-based executive at Nissan Motor Co Ltd referring to the Japanese firm's premium car brand.

Also, Washington neared a deal to lift its ban on US firms supplying Chinese telecoms gear maker ZTE Corp, sources said on Tuesday.

The reprieve for ZTE , hit by a seven-year ban in April that had crippled its operations, could include China removing tariffs on imported US agricultural products, as well as buying more American farm goods, the sources said.

The two countries stepped back from the brink of fullblown trade war after talks last week, with the US appearing to set aside for now its demands that China revamp key planks of its industrial policy.

US President Donald Trump has adopted a more conciliatory stance in the trade dispute with China as North Korea, whose chief ally is Beijing, has called into question a summit planned for next month in Singapore with Trump.