China weighing options of reducing import duty on automobiles by 10%-15%

If China goes ahead with the move, it would help foreign automakers to export more cars into China and help reduce price gaps.

On Thursday, Bloomberg has filed a report citing sources familiar with the matter at hand as saying, China’s cabinet is considering reducing import duties on cars by 10% to 15% as a measure to open up its automobile market.

An announcement on a decision is likely to be made sometime in May 2018.

Earlier this month, China had pledged to open its automobiles market and had announced a timeline to remove caps on foreign-ownership on joint ventures.

The development comes midst a trade standoff between two of the world’s biggest economies with U.S. President Donald Trump saying imposing a 25% tariff would amount to “stupid trade”.

On Tuesday, Trump had hinted at a possibility that Washington could reach a potential trade agreement with Beijing and in that event U.S. Treasury Secretary Steven Mnuchin would head to China.

A significant reduction in tariffs is likely to prompt non-domestic automakers to export more cars into China and in the process help close the price gap on local rivals.

Earlier this month, China’s auto industry had said a import duty reduction of 5% would knock off nearly one-fifth off the domestic industry’s profits.

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Categories: Creativity, Economy & Finance, Entrepreneurship, Geopolitics, HR & Organization, Regulations & Legal, Strategy

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