Market Overview

Auto Stocks Ride Reduced China Import Tax

Share:
Auto Stocks Ride Reduced China Import Tax

Carmakers gained momentum Monday after President Donald Trump announced reduced trade barriers in one of the largest global markets.

What Happened

Trump tweeted late Sunday that China would cut its burdensome import tariffs on American vehicles.

“China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%,” Trump said in the tweet after the G20 meeting.

Why It’s Important

U.S. automakers have suffered depressed sales in China since the foreign government instituted retaliatory tariffs in July.

China’s reversed trade policy would bolster margins and incentivize higher sales volumes in a region with a significant consumer base. Monday morning, Tesla Inc (NASDAQ: TSLA) popped 3.5 percent, General Motors Company (NYSE: GM) 3.3 percent, Ford Motor Company (NYSE: F) 2.4 percent and Fiat Chrysler Automobiles NV (NYSE: FCAU) 2.3 percent.

Chinese automakers such as Nio Inc - ADR (NYSE: NIO) also traded up on the news, given the galvanizing implications for their domestic auto market. Amid stunted economic growth and the U.S. trade war, sales are expected to contract this year for the first time in decades.

What’s Next

China has not yet announced its formal policy, and Trump did not clarify details of the cut in his tweet. More information is likely forthcoming.

Related Links:

What China's Proposed 50% Cut To Car Purchase Tax Could Mean For Automakers

China Cuts Car Tariffs, But That May Not Advance The 'America First' Theme

Posted-In: China Donald TrumpGovernment News Regulations Top Stories Movers Trading Ideas Best of Benzinga

 

Related Articles (F + FCAU)

View Comments and Join the Discussion!
Fastest Market News Application
You'll Hear It First On Pro
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Best Sector ETFs For December: Repeat Performers

28 Stocks Moving In Monday's Pre-Market Session