President, USTR announce plans to end import benefits for India, Turkey

On March 4, U.S. Trade Representative (USTR) Robert Lighthizer announced plans to end benefits for India and Turkey under the Generalized System of Preferences (GSP), a long-standing program that eliminates tariffs on non-import sensitive goods from developing countries that meet specific eligibility criteria. According to the USTR:

• India has implemented a wide array of trade barriers that create serious negative consequences on United States commerce; and,
• Turkey no longer qualifies as a GSP since the country has experienced improved economic development since it received GSP status in 1975.

“The tariffs on imports from China increased costs and derailed the transportation system, as importers purchased extra inventory ahead of the tariffs. Also as a result of these tariffs, companies looked to manufacture in other countries. India is one of these countries that gained new business,” explained Richard K. Packer, CFSP, president and chief operating officer, American Metalcraft, Inc., Franklin Park, Ill. “Now, with the GSP denial for India and Turkey, costs will again increase and the situation for importers will continue to be uncertain.”

The announcement reflects a new, stricter review process for GSP eligibility announced by USTR in 2017,” said NAFEM legal team member Nicholas Galbraith, Barnes & Thornburg. The administration also has launched GPS reviews of Indonesia, Kazakhstan and Thailand.

GSP status could be removed from India and Turkey as early as May 3. It will become official when an Executive Order or Presidential Proclamation is published in the Federal Register.