Even as United States President Donald Trump is apparently deepening his protectionist and ‘America First’ policy, his administration has decided to bring to an the preferential treatment on trade that it historically provides India. This treatment would be stopped from next week, announced Trump.
The scheme that was initiated years ago in the 1970s has been for year benefited India the most among the countries that took advantage of it which allows products from the designated and identified countries to be imported into the US free of any duty. This policy was started by the US to help the poorer and developing countries to grow.
However, stating next week, that special privilege given to India for years now would come to an end, Trump said. Back in March, Trump has said that this special status for India would be taken away as its own market has not been opened up to satisfactory degree by India. However no specific date for the actions was annoucned by Trump back then.
“It is appropriate to terminate India’s designation as a beneficiary developing country,” Trump said on Friday.
While claiming the this move would result in “minimal economic impact” to the Indian economy according to Indian authorities, this move comes at a time when Indian economy is experiencing lower economic growth accompanies by record rates of unemployment.
Under the preferential trade beneficiary program called the Generalized System of Preferences (GSP) programme, no import duty was levied on Indian products into entering the United States worth up to $5.6 billion so far.
Analysts say that this move by the Trump administration is its latest push to set right what it believes are trade relationships that are unfair for America. The preferential treatment on trade to Turkey given by the US under this program was terminated last month.
Import tariffs on steel and aluminium imports from countries around the world were also imposed last year by the Trump administration. India also hiked import duties on a host of products imported from the US last year as a retaliatory step against the US imposing tariffs on steel and aluminum.
In other protectionist measures, the Trump administration last month hiked import tariffs on Chinese products worth $200 billion from 10 per cent to 25 per cent thereby escalating the already acrimonious trade war between the two countries. Trump has also threatened imposing trade tariffs on all goods sent from Mexico over his allegations that this southern neighbor is not doing enough to control illegal immigrants entering the US through its borders – comprising mainly of people from Central American countries.
(Adapted form BBC.com)