Donald Trump sparks NEW trade war with INDIA: US plot to dump Delhi from tariff free plan | World | News


President Trump is planning to throw Delhi out of America’s Generalised System of Preferences (GSP), a move which would end duty free entry of up to $5.6 billion worth of India’s exports to the United States. Indian officials have moved to calm talk of a fresh trade war, promising not to raise retaliatory tariffs and saying “actual benefit” of GSP membership is just $190 million. Mr Trump has vowed to cut US trade deficits and repeatedly criticised India for its high tariffs since taking office in 2017.

The GSP is a US trade programme aimed at stimulating economic growth in developing countries.

Dating back to the 1970s, it provides preferential treatment for about 4,800 products from 129 countries and territories.

In a letter to Congress leaders, Mr Trump said he was planning to remove India from the GSP because Delhi has failed to commit to allowing US businesses equal access to Indian markets.

The president wrote: “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.”

US trade officials said Mr Trump’s measure would take 60 days to come into effect after official notifications to Congress and the Indian government.

Mr Trump would require a presidential proclamation to enshrine the move in US law.

The US Trade Representative’s Office said America’s goods and services trade deficit with India stands at $23.7 billion.

The USTR said: “India has implemented a wide array of trade barriers that create serious negative effects on United States commerce.

“Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion.”

India is the world’s largest beneficiary of the GSP program and ending its participation would be the strongest punitive action Mr Trump has taken on the south Asian nation.

India makes use of concessions on about 1,800 products of the 3,700 the GSP covers and goods from sectors such as chemicals and engineering are exempt from US tariffs under the scheme.

Ajai Sahai, director general of the Federation of Indian Export Organisations, said farm marine and handicraft exports are the products most likely to be hit by Mr Trump’s threat.

The Confederation of Indian Industry, which had lobbied against withdrawal from the GSP, said India’s top GSP-covered exports to the US included motor vehicle parts, ferro alloys, precious metal jewellery, building stone and insulated cables and wires.

Delhi has played down the significance of no longer being party to the GSP with commerce secretary Anup Wadhawan saying it “will not have a significant impact”.

Mr Wadhawan added India does not plan to slap tit-for-tat tariffs on American goods in response to being dumped from the GSP.

He said: “Discussions are on with the United States, and given cordial and strong ties, (we are) keeping retaliatory tariffs out of it.”

Last week, India delayed higher tariffs on some US imports until April 1, in response to the Trump administration’s refusal to exempt it from new steel and aluminium tariffs.

US and Chinese trade representatives are wrapping up talks on a new deal which will end President Trump’s trade war with Beijing.

The deal could end at least $200 billion worth of Chinese goods which are currently subject to extensive US tariffs.

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