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Tesla slashes car prices in China after tariff suspension
9:44 AM ET Fri, 14 Dec 2018 | 02:21

Tesla is slashing prices on its Model S sedan and Model X sport utility vehicle in China after Beijing suspended some tariffs on cars imported from the U.S..

The company confirmed the news on Friday.

Tariffs on U.S.-made cars and light trucks will be temporarily reduced to 15 percent from Jan. 1 until March 31, which temporarily brings tariffs on U.S. exports in line with other World Trade Organization member countries, said Kristin Dziczek, vice president of industry, labor & economics at the Center for Automotive Research.

The electric car maker has been hit hard by the steep duty on all vehicles imported to the country. The tariff on imported vehicles into China had originally been 25 percent, a policy that had been in place since China joined World Trade Organization, Dziczek said.

On July 1, the country lowered the duty to 15 percent for every other member of the WTO except the United States, she said. China then boosted the tariffs solely on U.S.-made vehicles to 40 percent on July 6 in retaliation for U.S. duties on Chinese imports.

Tesla CEO Elon Musk has been particularly vocal about the tariffs China has long levied against U.S. imports, in comparison with the mostly low tariffs the U.S. has historically charged importers.

Tesla was not immediately available for comment.

China accounted for 17.2 percent of Tesla's total revenues in 2017, but only 6 percent in the third quarter due to the impact of the tariffs, said CFRA analyst Garrett Nelson.