Trump’s Trade War Expands to India
On 5 June 2019, the United States withdrew duty-free market access for over 3600 products that it was providing to India under the Generalized System of Preferences (GSP), affecting a significant amount of Indian exports.
India’s retaliatory tariffs indicate that tough times are coming for the economic relationship.
The GSP was put in place in 1971. It saw 13 developed countries grant duty-free access to designated products from beneficiary developing countries, thereby helping developing countries increase their share of global trade.
While most developed countries introduced the GSP in 1971, the United States accepted this system of preferences in 1976 after the Trade Act of 1974 provided the requisite legal grounds.
The United States extended GSP benefits to 104 countries before it removed India from the list of ’beneficiary developing countries’.