Notable Drop in Prices of New U.S.-Made Vehicles Across Gasoline, Hybrid, and Electric Models

Representative of the Jordanian Automobile Dealers and Distributors Association, Mohammad Al-Zaro, confirmed on Tuesday that the new reciprocal trade agreement signed between the Hashemite Kingdom of Jordan and the United States of America will have a direct and positive impact on the prices of new (zero-mileage) American vehicles in the Jordanian market, following a reduction in the special tax levied on them.

Al-Zaro explained that measuring the full impact of this decision on market dynamics requires a comprehensive study, noting that the reduction specifically targets the special tax, while the general sales tax remains unchanged.

Details of the Special Tax Reduction on U.S. Vehicles

Under the new amendments stemming from the trade agreement, special tax rates on various categories of U.S.-origin vehicles have experienced a targeted and unified reduction to 16%, down from previous rates:

• Electric Vehicles: Special tax reduced from 27% to 16%.
• Hybrid Vehicles: Special tax reduced from 39% to 16%.
• Gasoline Vehicles: Special tax reduced from 55% to 16%.

This broad tax reduction will result in clear price differentials and a noticeable decrease in the cost of new vehicles imported directly from American manufacturers.

Impact on the Jordanian Automotive Market

Regarding the decision's reflection on consumer choices and buying activity:

• Lower Tax Burden: The tax reduction helps lower the final cost of new (zero-mileage) vehicles originating from the United States.
• Market Supply Nature: Al-Zaro pointed out that not all vehicle models available in the Jordanian market are necessarily of U.S. origin, requiring a detailed study to determine the actual impact compared to vehicles from other regions.
• Evaluating Implications: The overall effect on the automotive sector as a whole remains under assessment to evaluate shifts in purchasing power and Jordanian consumer preferences.

Signing of the Trade Agreement in Washington

Jordan and the United States officially signed the reciprocal trade agreement in Washington to bolster bilateral economic relations, expand trade prospects, and facilitate the entry of products and exports between both countries.

The agreement was signed on the Jordanian side by Minister of Industry, Trade, and Supply, Eng. Ya'rub Qudah, and on the U.S. side by United States Trade Representative Jamieson Greer, building on the long-standing economic partnership since the Free Trade Agreement entered into force in 2001.

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