Trump kicks India, Turkey out of trade preference program

President Donald Trump said Monday that he has kicked India and Turkey out of a decades-old U.S. program that allows developing countries to export thousands of goods to the United States without paying duties.

India's termination from the Generalized System of Preferences program follows its failure to provide the United States with assurances that it will give equitable and reasonable access to its markets in numerous sectors, the Office of the U.S. Trade Representative said in a statement.

Turkey's termination from GSP follows a finding that it is sufficiently economically developed and should no longer benefit from preferential market access to the United States market, USTR said.

U.S. law requires Trump to wait at least 60 days after he notifies Congress and the governments of the two countries before he formally terminates their participation by issuing a presidential proclamation. Trump sent letters notifying Congress of the changes today.

Trump's move to terminate GSP benefits for India follows his boast last year that Indian government officials had approached him to negotiate a bilateral trade deal. That now looks increasingly in doubt.

His move would raise duties on about $5 billion to $6 billion worth of goods the U.S. imports from India — or slightly more than 10 percent of India's total exports to the U.S. — and potentially provoke New Delhi to retaliate against Trump's steel and aluminum tariffs imposed last year.

The U.S. dairy and medical device industries had asked for the review of India's GSP benefits, complaining that India's policies were unfairly blocking their exports.

GSP suspension would punish Indian companies that rely on the program to export goods such as chemicals, granite, machine valves and bathtubs to the United States. It would also raise costs for American companies by more than $225 million if tariffs are imposed, based on the amount of duties waived on Indian goods in 2017.

Trump's decision to terminate GSP benefits for Turkey was the result of a review initiated by USTR in August, around the same time Trump doubled his national security tariffs on steel and aluminum from the longtime ally to 50 percent and 20 percent, respectively. That's twice what other countries are paying.

Trump said he doubled the duties in response to the plummeting value of the Turkish Lira. But his trade move also came amid a diplomatic row over the arrest of an American pastor and charges against several U.S. officers at the Incirlik Air Base in southern Turkey.