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China reportedly plans to slash auto tariffs — a huge win for Trump — and auto stocks are moving

Key Points
  • Shares of General Motors, Ford and Tesla rise after Bloomberg News reported that China is moving toward cutting tariffs on U.S.-made autos.
  • Trump tweeted earlier this month that China had agreed to lower the tariffs.
President Donald Trump talks with auto industry leaders, including General Motors CEO Mary Barra (L) and United Auto Workers (UAW) President Dennis Williams (R) at the American Center for Mobility in Ypsilanti Township, Michigan, U.S. March 15, 2017.
Jonathan Ernst | Reuters

Chinese Vice Premier Liu He has told U.S. officials that China plans to reduce tariffs on American auto imports from 40 percent to 15 percent in a move that could break an escalating trade war between the world's two largest economies, The Wall Street Journal reported, citing a person familiar with the negotiations.

The vice premier told Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer of the decision in a call late Monday, the Journal reported.

Bloomberg News earlier reported that China was moving toward cutting tariffs, citing people familiar with the matter, giving U.S. automakers' shares a lift before the markets opened. China raised tariffs on U.S. autos to 40 percent in July in retaliation to U.S. tariffs.

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China's Commerce Ministry issued a statement saying the conversation — held Monday evening in the U.S., early Tuesday in China — was meant to "push forward with next steps in a timetable and road map" for negotiations, the Journal reported, adding that Liu plans to come to Washington early next year.

Chinese officials are also considering amending the Made in China 2025 plan, which is designed to give Chinese companies an edge in a number of industries, including artificial intelligence and robotics, the Journal reported. It's been a sticking point for the U.S., which complains that it allows Beijing to engage in unfair trade practices.

Fiat Chrysler, GM, Ford and Tesla all rose Tuesday.

A day after President Donald Trump agreed to a 90-day trade truce with China at the G-20 summit, he tweeted that the country had agreed to lower these auto tariffs.

But after the tweet, neither the White House nor China verified any such agreement. The White House did not return a request for comment on Tuesday's report.

Read the full Bloomberg and Journal articles here and here.