China reduces tariffs on US cars to 15 per cent amid signs trade war is softening

China has agreed to reduce tariffs on US cars from 40 per cent to 15 per cent.

Shares in US car firms jumped slightly on immediate reaction to the news.

Shares in General Motors were up 2.8 per cent, while Tesla was up 0.7 per cent and Ford 0.65 per cent.

Meanwhile, US markets were up slightly as the news broke. The S&P 500 increased by 0.18 per cent, while Nasdaq was up 0.46 per cent. The Dow, however, was down 0.19 per cent.

Earlier in the day reports suggested China was poised to cut tariffs on US-made cars. Bloomberg reported that a proposal to reduce tariffs to 15 per cent from the current 40 per cent was submitted to China's Cabinet for review.

Earlier in the day US President Donald Trump tweeted:

Very productive conversations going on with China! Watch for some important announcements!

— Donald J. Trump (@realDonaldTrump) December 11, 2018

US markets have been rattled over the arrest of Huawei's chief financial officer Meng Wanzhou last week.

Meng, who is the daughter of Huawei’s founder, was arrested in Canada and could face extradition to the US. The charges are unknown, but the US has been investigating the Chinese firm on suspicion of violating trade sanctions with Iran since 2016.