The Wall Street Journal reported Wednesday that Chinese officials also agreed to replace the comprehensive industrial policy, Made in China 2025, which Trump officials have sharply criticized.
Shares of Toyota Motor Corp.as well as Hyundai Motor Co. tacked on gains before Daimler AG, Tesla Inc. and General Motors Co. also saw their stocks go up.
While reversing the tariffs on American made imported vehicles is a huge step down for the Chinese, it would, in fact, help ease trade tensions between the two countries and help facilitate a truce.
Meng Wanzhou, the CFO of the Chinese telecoms giant Huawei, was on Tuesday, 10 days after her arrest in Vancouver. If they can't, the higher US tariffs will go into effect on the $200 billion in Chinese imports.
However the claim has not yet been confirmed by Chinese officials, sowing confusion.
The development bodes well for Ford Motor Company and BMW, which export luxury vehicles made from the U.S. to China. The German luxury carmaker previously said the tariffs would cost the company $300m this year alone.
In July, China had boosted the tariff on American-made cars to 40pc as part of retaliatory measures against the US.
U.S. President Donald Trump's envoy to Canada says China's rise might have worrying implications for North American workers but she says the U.S. pursuit of a Huawei executive is a separate legal matter.
5 arrested as French police hunt gunman in attack that killed 2
A large-scale manhunt is under way for a suspected extremist gunman who killed three near a Christmas market in Strasbourg . It has been two days since the attack on a Christmas market in Strasbourg , but police have still not caught the attacker.
Less than two weeks after the Trump administration declared a 90 day armistice in the trade war with China, the White House is preparing to condemn China for hacking and IP theft, with the Department of Justice readying indictments against several Chinese hackers.
The trade war has taken a toll on auto companies that manufacture in the USA, with the makers of Mercedes-Benz and BMW both warning of lower profits this year as tariffs forced them to hike prices in China.
"Firstly we had news that China was considering reducing tariffs on U.S. cars, then the Huawei CFO was released on bail and then Trump said he could intervene in the case if it helped secure a trade deal".
The tariff reduction benefits Daimler and BMW more than United States carmakers such as General Motors or Ford. While both automakers export some specialty vehicles, that includes lower-volume sports cars such as the Ford Mustang and the Chevrolet Corvette as well as some luxury vehicles.
A Canadian court on Tuesday conceded safeguard to the official in a move that could help assuage Chinese authorities rankled by her capture.
China-based music streaming company Tencent Music Entertainment was last up 7.9 per cent in its United States debut.
China was the largest market for U.S. soybeans in 2017, accounting for around $US14 billion in sales - more than 60% of total soybean exports. China imported 280,208 vehicles, or 10 percent of total imported cars, from the US last year, according to China's Passenger Car Association.