Trade war: President Trump threatens to end trade benefits for India, Turkey

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Published: March 5, 2019 7:35:44 AM

The U.S. said in April it would review India’s eligibility for the generalized system of preferences program after some U.S. companies said dairy and medical devices shipments to India were being hurt by non-tariff barriers.

Trade war: President Trump threatens to end trade benefits for India, TurkeyTrade war: President Trump threatens to end trade benefits for India, Turkey

President Donald Trump delivered notice Monday he plans to end key trade preferences for India and Turkey.

Trump notified Congress in letters of his “intent to terminate” trade benefits for both countries under the generalized system of preferences. The notification starts a 60-day countdown before the president can take the action on his own authority, the U.S. Trade Representative’s Office said in a statement.

Their designation under the program allows duty-free entry of about 2,000 products including auto components, industrial valves, and textile materials. The president can still walk back his notice to terminate the preference programs if the two countries satisfy the concerns of his administration.

India was the largest beneficiary of the program in 2017 with $5.7 billion in imports to the U.S. given duty-free status and Turkey the fifth largest with $1.7 billion in covered imports, according to a Congressional Research Service report issued in January.

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The U.S. said in April it would review India’s eligibility for the generalized system of preferences program after some U.S. companies said dairy and medical devices shipments to India were being hurt by non-tariff barriers.

Trump said in a notification letter that India “has not assured the United States that it will provide equitable and reasonable access to the markets of India.”

He said in a separate letter that Turkey is no longer a “developing country based on its level of economic development.”

Trump’s decision comes at a difficult time for India’s prime minister, Narendra Modi. He faces a general election in a few weeks even as the longstanding animosity between India and Pakistan has escalated into violent clashes that could lead to all-out war.

Trump has had several disagreements with Turkey’s leader, Recep Tayyip Erdogan. His country’s once-robust economy has weakened, and that will likely be a key issue in local elections at the end of the month.

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