India will lose GSP status on Wednesday, June 5

Posted on Jun 3

Previously, on March 4th President Trump announced his intention to terminate India’s designation as a GSP beneficiary. A 60 day grace period that was granted at that time expired on May 3rd. Last Friday, President Trump terminated India’s designation as a beneficiary developing nation under the Generalized System of Preferences (GSP) after determining that it has not assured the US that it will provide “equitable and reasonable access” to its markets. The effective date of the termination is June 5.

GSP is the largest and oldest US trade preference program, and was designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries. India was the largest beneficiary of the GSP in 2017 with $5.7 billion in imports to the US given duty-free status, according to a Congressional Research Service report issued in January.

In a statement, Coalition for GSP executive director Dan Anthony said President Trump’s decision will cost American businesses over USD 300 million in additional tariffs every year. “Without GSP benefits American small businesses face a new tax that will mean job losses, cancelled investments and cost increases for consumers. Only a year after the Senate and House passed a three year re-authorization of the GSP by a near unanimous margin, the Trump administration has kicked out the GSP country that saves American companies more money than any other,” he said.

V. Alexander will continue to monitor this situation and provide updates as they become available.

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