- The Trump administration will end trade preferences on billions of dollars worth of goods from India over the country’s trade practices.
- Experts warned the administration’s decision could be a sign that more tariffs are on the horizon.
- “This could potentially presage a new trade investigation and, possibly, tariffs,” analysts wrote.
The Trump administration’s decision to rescind trade preferences with India could be a sign that more tariffs are on the horizon, experts say.
U.S. trade officials announced Friday the end of special trade treatment on $6 billion worth of goods from India because the country has “not assured the United States that India will provide equitable and reasonable access to its markets.”
Those Indian goods were exempted from tariffs under what’s called the Generalized System of Preferences (GSP). Special trade treatment will end Wednesday, suggesting to trade experts President Donald Trump is expanding war against the U.S. trade deficit.
“This could potentially presage a new trade investigation and, possibly, tariffs,” analysts ClearView Energy Partners wrote in a report released Monday morning.
ClearView analysts said the Trump administration may be weighing a Section 301 investigation, which could lead to retaliatory tariffs if trade officials find India’s trade policies hurt U.S. commerce. Trump has criticized India’s “unfair” trade practices, which he says hurts U.S. companies and workers.
U.S. President Donald Trump inspects an honour guard with Britain’s Prince Charles at Buckingham Palace, in London, Britain, June 3, 2019. REUTERS/Toby Melville.
“As we discussed in March, the termination of India’s duty exemptions – and especially the imposition of new tariffs – could potentially draw retaliation against U.S. coal exports, a nontrivial risk for U.S. producers,” according to ClearView.
The Indian government called the end of trade preferences “unfortunate.” India ended trade benefits for $200 million worth of U.S. goods in recent months in retaliation for steel and aluminum tariffs Trump put in place last year. (RELATED: Trump Allows For Expanded Ethanol Sales As Chinese Tariffs Squeeze Farmers)
“In any relationship, in particular in the area of economic ties, there are ongoing issues which get resolved mutually from time to time,” the Indian government said, according to CNN.
“We view this issue as a part of this regular process and will continue to build on our strong ties with the US,” the Indian government said.
Trump’s focus on Indian trade comes on the heels of the president slapping gradually rising tariffs on Mexico unless it does more to combat illegal immigration. Trump is also considering new tariffs against China.
The White House told Congress in March it would end trade preferences with Turkey and India, which is the U.S.’s ninth-largest trading partner. However, Indian officials said trade preferences could be restored and tariffs could be avoided.
India’s Prime Minister Narendra Modi speaks to the media after his meeting with President Ram Nath Kovind, to stake claim to form the new government at the Presidential Palace in New Delhi, India May 25, 2019. REUTERS/File Photo.
“This is not the end of GSP (benefits), possibly because the US has restored the benefits in the past to other countries after withdrawing them,” an unnamed Indian official told The Economic Times of India.
“There have been instances where they have restored the GSP. They withdrew the benefits from Argentina but subsequently restored them,” the official said Sunday.
India has been a major center for foreign investment under Prime Minister Narendra Modi, but foreign investment has winded down as Modi focused on building support among domestic businesses. Modi won a landslide victory in India’s national election in May.
The White House did not respond to The Daily Caller News Foundation’s request for comment.
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