China’s Ministry of Finance will slash car import tariff rates by 10 percentage points on 1 July in a bid to make the world’s biggest new car market more attractive to foreign manufacturers and spur automotive development.
This significant cut in import tariffs, taking the figure from an unusually high 25% to 15%, aims to boost investment in the Chinese automotive industry — a sector that’s already gained attention on the world stage for its fast-paced development in electric car technology.
China’s high levy had reduced potential input from foreign car makers that do not produce cars within its borders, such as Tesla. Elon Musk, Tesla's CEO, had previously stated that China’s levy had created a skewed market, while US President Donald Trump labelled it “stupid trade”.
Trump’s comments reflected the US’s comparably low import tariff for new cars at just 2.5% abd he had placed pressure on China to lower its tariffs to even the playing field. The European Union, by comparison, has a 10% levy on foreign-made cars entering its borders.