US ends special trade treatment for India amid tariff dispute

10:28 | 04/06/2019 Cooperation

The US will end preferential trade status for India on Wednesday, President Donald Trump has confirmed amid a deepening row over protectionism.

Mr Modi and Mr Trump have had cordial ties but their countries are at odds over trade

India had been the largest beneficiary of a scheme that allows some goods to enter the US duty-free. However that status will end on Wednesday, Mr Trump said.

In March he announced that it would be revoked because India had failed to provide adequate access to its markets. Then last Friday he said: "It is appropriate to terminate India's designation as a beneficiary developing country."

India had said the move would have a "minimal economic impact", but it comes at a time lower growth and record unemployment in the country.

Until now, preferential trade treatment for India under the Generalized System of Preferences (GSP) programme allowed $5.6bn (£4.3bn) worth of exports to enter the US duty free.

The move is the latest push by the Trump administration to redress what it considers to be unfair trading relationships with other countries.

Last month the US ended Turkey's preferential status under the scheme.

Mr Trump has also imposed tariffs on steel and aluminium imports from countries around the world. Last year, India retaliated against those tariff hikes by raising import duties on a range of goods.

Separately, the US is involved in an escalating trade war with China, and recently threatened tariffs on Mexican goods over illegal migration.

Theo BBC