BMW and Tesla cut China prices

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BMW announced on Saturday to cut the prices of its U.S. made X5, X6, X5M and X6M following China's decision to suspend additional tariffs on U.S. made cars and auto parts.

The price of its new BMW X5, which was just launched in early December, is slashed to 779,900 yuan, a decrease of 30,000 yuan.

And prices of the X6，X5M、X6M and the last generation of X5 have been adjusted down to just before China raised tariffs on U.S. made autos to 40 percent this July in retaliation to U.S. tariff hikes on the Chinese equivalents.

It is the second automaker to do so in response to the tariff drop. On Friday, Tesla cut the prices of its Model S and Model X vehicles in China.

File photo of Tesla Model S electric car./Reuters Photo

According to the electric carmaker's Chinese website, the price of certain Model S cars was cut by up to 105,000 yuan, and Model Xs by up to 65,000 yuan.

China's finance ministry said on Friday it would suspend additional tariffs on U.S.-made vehicles and auto parts for three months starting from Jan. 1, 2019, a move to implement the agreement reached by Chinese president Xi Jinping and his U.S. counterpart during their trade talks at the G20 summit in Buenos Aires earlier this month.

That means the 40 percent tariffs on U.S. cars will be cut back to 15 percent during the three months. But whether the suspension will last remains to be seen.

BMW said that they are closely watching the situation and will swiftly respond to any policy changes.