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Tesla Drops Prices in China After the Government Suspends Tariffs

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China will temporarily drop a retaliatory 25 percent tariff on imported US cars as the two countries try to work toward a resolution of the recent trade war, Chinese government officials announced on Friday.

The government there had tacked that 25 percent tariff onto an existing 15 percent import tax earlier this year as part of the escalation between the two sides.

His proclamation followed a post-G20 summit dinner with China’s president Xi Jinping, and it set off a scramble the following day among cabinet members and advisers who offered competing interpretations of what changes, if any, could go into effect.

Tesla also struck a deal this summer to build its third Gigafactory in China, which means the company will eventually be able to produce cars locally and get around the tariff completely.

The country is staring down the first sales drop in almost 30 years, in part because of the trade war, but also because China’s economy is finally cooling off after decades of intense growth.

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