China will suspend additional tariffs on U.S.-made vehicles and auto parts for three months starting Jan. 1, 2019, the country’s finance ministry said on Friday, following a truce in a trade war between the world’s two largest economies.
China will suspend 25 percent tariffs on 144 U.S. vehicle and auto part items and 5 percent tariffs on 67 auto items between Jan. 1 and March 31, the ministry said in a statement on its website.
The Ministry of Finance also said it hopes China and the United States can speed up negotiations to remove all additional tariffs on each other’s goods.
The announcement on the planned tariff suspension followed China’s first major purchase of U.S. soybeans since U.S. President Donald Trump and his Chinese counterpart Xi Jinping’s landmark talks on trade in Argentina on Dec. 1.
The tariff suspension and soybean purchase are early signs that the bitter trade war between China and the United States may be starting to thaw.
In Argentina, Trump and Xi agreed to a truce that delayed the planned Jan. 1 U.S. increase of tariffs on $200 billion worth of Chinese goods while they negotiate a trade deal.
A Trump official said on Tuesday that China had agreed to cut tariffs on U.S.-built cars and auto parts to 15 percent from 40 percent.
China’s tariff cut was communicated during a phone call between Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, the official said.
Earlier this year, China hiked its tariffs on U.S. autos and parts after the United States raised its tariffs on Chinese vehicles and parts to 27.5 percent.