Trump notified Congress on Monday in letters of his “intent to terminate” trade benefits for both countries under the generalized system of preferences.
Trump said India would no longer receive benefits under the Generalized System of Preferences (GSP), which was set up to promote trade from developing countries. Turkey’s benefits under the program also will end.
“I am providing notice of my intent to terminate the designation of India as a beneficiary developing country under the Generalized System of Preferences (GSP) program,” Trump said.
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.
Hours after Trump’s announcement, New Delhi reacted by saying that the move will not have a “significant impact” on its exports as it concerned a small chunk of India’s $80 billion in annual exports to the US.
The “actual benefit” which will be impacted would be to the tune of $190 million, which Wadhawan said was moderate compared to the total volume of trade.
“India felt it had arrived at a fairly meaningful offer balancing US aspirations with our concerns, which was not workable with the US side. This is a given situation now. So it seems like we’re looking at a non-GSP trade with the US,” Indian Commerce Secretary Anup Wadhawan said, according to NDTV.
“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 India,” added Trump.
Their designation under the program allows duty-free entry of about 2,000 products including auto components, industrial valves, and textile materials.