An unending trade war with China is forcing American companies to trade more from Generalised System of Preferences (GSP) countries, such as India, Cambodia, Thailand, Indonesia, and Turkey, a latest report stated, although warning that the cancellation of GSP merits to India would only aid China.
The Coalition for GSP, a group of American trade associations and companies, in a report, told that the latest official trade statistics show that the GSP, in March 2019, saved American companies $105 million, an increase of $28 million from March, 2018 and set a record for the second-highest level. In the first quarter of 2019, under GSP, American companies have already saved $285 million.
GSP is the oldest and largest US trade preference programme, intended to promote economic development by permitting duty-free entry of thousands of items from specific beneficiary countries.
President Donald Trump, on March 4, said that the US plans to terminate India’s status as a designated beneficiary country under the GSP programme.
“For India, 97 per cent of increased 2019 GSP imports are on the China Section 301 lists. GSP imports on Section 301 lists increased by USD 193 million (18 per cent), while imports of everything else increased by just USD seven million (two per cent).”, the report said.
The coalition added, “Not only would terminating GSP for India, Turkey or others under review (Thailand, Indonesia) hurt many American companies and workers that have relied on GSP for years, it would also reduce viable sourcing options for companies looking to buy less from China in response to Section 301 tariffs — thereby undermining the president’s own objectives.”
This way, Chinese imports into the US would increase substantially.