Automakers rise on report of China moving to cut U.S. car tariffs

(Reuters) – Automakers’ shares rose on Tuesday following a report that China could move to cut tariffs on American-made cars, a step which was forecast by U.S. President Donald Trump after a meeting with China’s president in Argentina.

China is moving to cut import tariffs on American-made cars to 15 percent from the current 40 percent, Bloomberg reported on Tuesday citing people familiar with the matter.

The step hasn’t been finalized and could still change, according to the report.

Shares of U.S. automakers including General Motors Co (GM.N) and Ford Motor Co (F.N) rose about 2 percent in premarket trading on hopes that the move could revitalize sales that took a hit when China ramped up levies on U.S.-made cars.

European auto stocks .SXAP also rallied 2.8 pct on the news, as several of the carmakers build SUVs in the United States and sell in China.

BMW (BMWG.DE), Volkswagen AG (VOWG_p.DE) and Daimler AG (BMWG.DE) rose between 2.3 percent and 4 percent.

A proposal to reduce tariffs on cars made in the U.S. to 15 percent has been submitted to China’s Cabinet to be reviewed in the coming days, according to the report.