Trump: The U.S. Will End Trade Exemptions for India

On Monday, Donald Trump, the President of the United States, announced his intention to revoke tariff exemptions on $5.6 billion worth of imported goods from India. According to Reuters, Trump stated in a letter to U.S. congressional leaders that he plans to terminate India's participation in the Generalized System of Preferences (GSP) as a developing country. The U.S. President emphasized that during negotiations with India, the country did not provide the necessary guarantees for U.S. access to its markets. Trump has consistently stated that he wants to reduce the U.S. trade deficit with other countries and has repeatedly criticized India's high customs tariffs. According to government statistics, the U.S. trade deficit with India was $27.3 billion in 2017. The report notes that India is the largest beneficiary of the GSP program, and ending New Delhi's participation in this program would be the most severe punitive action against India since Trump took office in 2017. Reuters previously reported that one of the reasons for the recent trade disputes between the two countries is new regulations imposed by the Indian government regarding online trade. These new regulations will limit the expanding businesses of Amazon and Flipkart, which is owned by the American company Walmart. The online trade market in India is rapidly growing and is expected to reach $200 billion by 2017. The new regulations announced by the Indian government in December prohibit companies like Amazon from entering into exclusive contracts with manufacturers, limit the discounts offered on product prices, and prevent them from selling products through sellers in which they have a stake. As a result of these restrictions, the product list of Amazon's branch in India has been disrupted, forcing the company to change its business structure. Amazon, Walmart, and the U.S. government have lobbied to prevent the passage of these laws.