In a round of good news as the Trump administration continues trade negotiations with China, the country announced it plans to cut vehicle and auto part tariffs.
Right now, China slaps vehicle imports into the country with a 25 percent tariff. The country said tariff will come down to 15 percent. China will also reduce levies on auto parts to 6 percent. The changes should go into effect on July 1, according to a CNBC report on Tuesday.
Following the news, General Motors stock is poised for a rally when markets open today. China remains one of GM’s most important markets; the automaker sold some 4 million cars in China last year. Auto stocks in general, including Ford and Tesla, should also see gains following China’s announcement.
Treasury Secretary Steven Mnuchin told CNBC that both the United States and China have made “very meaningful progress” surrounding trade. Now, both countries must implement proper policy to stave off a trade war. Following tariffs announcements earlier this year from the Trump administration, automakers including GM worked to brush aside potential side effects of tariffs levied on steel and aluminum.