This would be the strongest punitive action against India since Trump took office in 2017, as India is the largest beneficiary of the GSP program. According to the US Trade Representative’s Office, the US goods and services trade deficit with India was $27.3 billion in 2017.
US President Donald Trump intends to end India’s preferential trade treatment, media reports. The argument for taking this step is that India has failed to assure America it would provide equitable and reasonable access to its markets in numerous sectors.
Trump informed the US Congress about his intent to terminate the designation of India and Turkey as a beneficiary developing country under the Generalised System of Preferences (GSP) programme that allows $5.6 billion worth of Indian exports to enter the United States duty free, media reported.
The US president has vowed to reduce US trade deficits and has raised the issue of India’s high tariffs repeatedly.
“I am taking this step because, after intensive engagement between the United States and the Government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of InIndia,” media reports quoted Trump’s letter to congressional leaders.“ “I will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria,” Trump said in his letter, a copy of which was released to the press.
India’s removal from the GSP program would not take effect for at least 60 days after notifications to Congress and the Government of India, and it will be enacted by a presidential proclamation, the US Trade Representative’s Office said.
In another letter to the Congress, Trump also informed of his intent to terminate the GSP beneficiary designation of Turkey. This is primarily because the economy of Turkey had improved a lot in the last four-and-a-half decades, Trump said.
Source: Media reports