Vastavam web: Twenty-four U.S. members of Congress sent a letter on Friday to U.S. Trade Representative Robert Lighthizer, urging him not to end a vital trade concession for India, a day before the Trump administration is likely to announce a decision on it. Ending the Generalized System of Preferences (GSP), which allows preferential duty-free imports of up to $5.6 billion from the South Asian nation, would impose “hundreds of millions of dollars annually in new taxes” on American companies, the lawmakers said in a bipartisan letter led by Democratic Representative Jim Himes from Connecticut.
A decision to scrap the trade privilege comes as President Donald Trump has vowed to cut the U.S. trade deficit and repeatedly called out India for high tariffs. India is the world’s largest beneficiary of GSP, which dates from the 1970s, and ending its participation would not only be the strongest punitive action against the country since Trump took office, but would also open a new front in the global trade war.
Last June, India said it would step up import duties varying from 20 percent to 120 percent on a slew of U.S. farm, steel and iron products, angered by Washington’s refusal to exempt it from new steel and aluminum tariffs. But it has since repeatedly delayed adopting the higher duties – a move that could be implemented if GSP is withdrawn, the source added.
India sent a trade package listing the concessions it was willing to make to the USTR in late February but hasn’t heard from them, the source said. “They are usually very responsive so it is highly unusual for them to not respond to the trade package that was sent,” the source said. Despite close political ties between the two countries, trade between India and the United States, which stood at $126 billion in 2017, is widely seen to be performing at nearly a quarter of its potential.