Trump to Drop Preferential Trade Status for India and Turkey
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Trump to Drop Preferential Trade Status for India and Turkey


WASHINGTON, DC – March 5, 2019

President Trump intends to cancel India’s and Turkey’s preferential trade status, sending relevant notifications to Congress.

Trump explained he decision to cancel benefits for India within the framework of the generalized system of preferences  (GSP) by the fact that New Delhi did not give guarantees to providing American companies with "equal and reasonable access to Indian markets." Trump intends to cancel the preferential trade regime with Turkey "based on the level of economic development of the country." According to the American leader, over the past 45 years, during which privileges have been in force, the Turkish economy has noticeably strengthened and diversified, the income level of the population has risen, and poverty has decreased.

Impact of Trump’s decision on India and Turkey’s exports

The decision can seriously affect the supply of goods from India to the United States, which are the main focus of Indian exports (15% of total exports). On the other hand, according to analysts at the Massachusetts Institute of Technology, the US receives only about 2% of its imports from India (in 2017, India exported goods to the US for more than $44 billion).

For Turkish exports, Trump's decision also has a negative effect. According to analysts, the US is the sixth largest direction of Turkish exports; Turkey sends 5.3% of its goods to the US ($8.7 billion in 2017). At the same time, the US receives only 0.4% of its imports from Turkey. The WTO's generalized system of preferences provides unilateral trade preferences for developing countries.

Trump's protectionist policies

Under the presidency of Donald Trump, the US introduced protective duties on the import of a number of products from various countries. For example, last year, the United States increased tariffs on imports of steel and aluminum products from Europe. In response, the European Commission in the summer introduced the so-called rebalancing measures -- additional duties of 25% on the import into the European Union of certain goods from the United States totaling about 3 billion euros. In September, Washington also imposed a 25% import duty on China for hundreds of billions of dollars a year. Beijing responded by declaring a 10% duty on US LNG.

After another round of Chinese-American high-level consultations on trade, held in Washington from February 21 to 24, Trump announced that he would postpone a increase in duties on Chinese goods scheduled for March 1.

Author: USA Really