China to cancel auto parts tariffs

Beijing has said that it will stop charging import tariff on certain auto parts as of Tuesday after the WTO last year ruled that it violated international trade rules, the Wall Street Journal reported. The case was the first time that China lost a case in front of the world trade body, but analysts said the ruling will not make much difference as the world’s major auto makers are already manufacturing large quantities of cars in China using mostly locally sourced components. Analysts said that reducing the tax on imported auto parts to 10% may help foreign auto makers that are making new models in China. Such firms may prefer to import large pieces of the vehicle in the initial phase of production before switching to local suppliers.