U.S. automakers surged Monday, while their European rivals booked the biggest single-session gains in more than a year, after President Donald Trump said China had agreed to lower tariffs on cars imported into the world's biggest market following an agreement with Xi Jinping to suspend their simmering trade war at this weekend's G20 summit in Argentina.

A White House statement late Saturday said Trump will hold off on increasing tariffs on China-made goods, which were set to kick-in on January 1, for at least 90 days as the two sides negotiate a settlement on myriad trade, technology transfer and intellectual property theft disputes that have eroded relations for must of the past year. China's Foreign Ministry told reporters Monday that it had been instructed to examine the removal of all trade tariffs between the two countries and Trump Tweeted that Beijing agreed to "reduce and remove" levies on cars made in the United States and sold in China.

Tesla Motor Co.

(TSLA) - Get Report

shares were marked 3.2% higher in Monday at $360.00 each as investors bet the new trade detente would support its sales in China, which plunged 70% year-on-year in October, according to official data. Tesla said that number was "wildly inaccurate" but had noted earlier that tariffs of up to 40% were hurting sales and forcing the company to operate at "a 55% to 60% cost disadvantage compared to the exact same car locally produced in China."

Ford Motor Co. (F) - Get Report shares were also firmer, rising 2.9% to $9.68 each, while rival General Motors Co. (GM) - Get Report was marked 1.9% higher at $38.68 each.

In Europe, BMW AG (BMWYY) and Daimler AG (DMLRY) , both of which produce their luxury cars and SUVs in the United States in order to import into China, the world's biggest car market, gained 5.1% and 4.8% respectively in Frankfurt trading following both the White House statement and President Trump's Tweet. Domestic rival Volkswagen AG (VLKAY) was marked 3.2% higher at €153.66 each.

Daimler had said earlier this year that a "decisive factor" in its weaker profit outlook was that that "at Mercedes-Benz Cars, fewer than expected SUV sales and higher than expected costs - not completely passed on to the customers - must be assumed because of increased import tariffs for US vehicles into the Chinese market."

European automakers, however, still face the threat of potential tariffs in the United States, according to a senior European lawmaker who warned last week that the White House could apply fresh tariffs on exports to the United States before the end of the year.

European Union Budget Commissioner Gunther Oettinger, a German politician who once oversaw the auto industry in the state of Baden-Württemberg said he expected the new levies "before Christmas", according to a report by Germany's Wirtschaftwoche, a business and economics focused newspaper. The Commission itself attempted to clarify the comments, saying Oettinger was "concerned" the tariffs "could" come, and wasn't insisting anything had been decided in Washington.

New tariffs would mark a stark reversal to a July agreement between President Donald Trump and European Commission President Jean-Claude Juncker to freeze auto levies while they negotiate terms of the "breakthrough" trade arrangement. Juncker praised Trump for agreeing to hold off on new tariffs for European-made cars sold in the United States, calling it a "major concession" from the White House.