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.