U.S. Automakers’ Shares Surge After Xi Announces China’s plan to Reduce Car Tariffs

Shares of U.S. carmakers surged after Chinese President Xi Jinping announced the government's plans to “open the country's economy and to reduce the tariffs on automobiles.

Tesla edged up 5.2 percent while Fiat Chrysler advanced 2 percent. Ford Motor increased 1.8 percent and General Motors increased 3.3 percent. China is an important market for U.S. carmakers. European automakers also rose, with BMW rising 3 percent.

GM sold over 4 million cars in China in the previous year for the first time, while Tesla increased its revenue by twofold from China to $2 billion in 2017.

Xi said that his plans include greatly lowering import tariffs on foreign autos and reducing duties of other products. At the Boao Forum for Asia, Xi said that China is planning to boost imports and reach a greater of balance of international payments under the present account.

The Chinese leader's comments come amid escalating trade tensions between Washington and Beijing. In a retaliatory move against America's tariff plans, China has unveiled its plan to impose fresh duties last week on 106 U.S. products, which then resulted in President Donald Trump threatening more duties.

This weekend, the U.S. softened its tone against China. On Sunday, Secretary Steven Mnuchin told CBS that a full-out trade war between the U.S. and China is not seen to take place. On the same day, Trump said that he will always have friendly ties with President Xi no matter the consequence of their trade conflict. He also said that China will roll down its Trade Barriers because it is the proper action to take.

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