Car Industry

Mercedes, Tesla lowering prices in China amid easing tariff tensions

The tariff reduction doesn't actually go into effect until Jan. 1.

Nick Miotke/Roadshow

Full details of China's forthcoming reduction of its tariffs on US-built cars aren't even out yet, but already, automakers have reacted by reducing prices.

Mercedes-Benz will offer discounts on US-built cars in China through March 31, Reuters reports. That cutoff date is the same date that China's tariff reduction is set to expire -- the thought is that the US and China will agree on a new trade deal by then, but if the two parties can't reach a conclusion, there is a possibility that the tariffs could come back.

Mercedes-Benz will drop the prices of four models between 36,000 yuan and 135,000 yuan (about $5,200-$19,500).

That's not the only company making moves quickly. The Verge reports that Tesla will drop the prices of the Model S and Model X in China by about $15,000 and $9,500, respectively. The price drop goes into effect on Jan. 1, the same day China promised to reduce its tariffs. The Model 3 isn't included in the list because it's not on sale in China yet -- that won't happen until spring, and thus, it could avoid talk of trade-war tariffs entirely.

In July, Tesla jacked up the price of its two EVs in China by more than $20,000 as the trade war took shape. In November, it was reported that Tesla's sales in the Middle Kingdom were down by 70 percent year over year, but Tesla disputed that report. The news that the tariffs are going away, and the price reductions that will follow, will likely help Tesla's sales in China.

Last week, the world received official confirmation that trade tensions between the US and China were easing. After the US applied heavy tariffs on a number of Chinese goods, including cars built there, China raised the tariff on US-built vehicles from 15 to 40 percent. Automakers announced a host of changes in their production schedules, and Ford canceled one model's US introduction entirely.

Mercedes-Benz: Check out all the news related to your favorite three-pointed star.

Tesla: Keep up with everything coming out of Fremont -- and the CEO's Twitter account.