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China slashes import duty on cars

China slashed import tariffs on vehicles and auto parts in a bid to further open up its market as trade tensions between the U.S. and China appear to be easing.

The Ministry of Finance said it will cut the import duty on cars to 15% from 25% for most vehicles and from 20% for others, starting July 1. Tariffs for auto parts will be cut to 6% from mostly around 10%.

U.S. Treasury Secretary Steven Mnuchin told CNBC on May 21 that the U.S. and China agreed to drop their threatened tariffs on one another: the United States' additional 25% tariffs on $150 billion of Chinese imports and China's tariffs on $50 billion of U.S. exports.

The import reduction is expected to benefit not only U.S. automakers but European and Asian manufacturers as well, particularly those that make luxury cars, Bloomberg News said.

Shares of Volkswagen AG, Bayerische Motoren Werke AG, Tata Motors Ltd. and Daimler AG jumped.

In April, China removed a two-decades-old restriction on foreign ownership of automakers, allowing foreign car makers to own more than 50% of local ventures.