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Behind Trade Move Against India: Dispute on Knee Implants

India, Turkey will no longer be awarded zero-tariffs status on some goods
By Kate Seamons,  Newser Staff
Posted Mar 6, 2019 8:47 AM CST
President Donald Trump meets with India's Prime Minister Narendra Modi, Friday, Nov. 30, 2018 in Buenos Aires, Argentina.   (AP Photo/Pablo Martinez Monsivais)

(Newser) – Amidst America's trade battle with the world's most populated country comes a new move against the nation that occupies the No. 2 slot on that list. The US on Monday night announced that within 60 days, India will lose the preferential trade status that allowed it to export billions of dollars worth of goods to the US tariff-free. The Office of the United States Trade Representative said the change will apply to Turkey, too. The AP reports the zero-tariffs status, called the Generalized System of Preferences, is extended as a growth mechanism to poor countries. The decision to end Turkey's status was made in light of its economic growth. The same motivation didn't exactly apply to India, reports the New York Times, which says the "retaliatory" move came after a year-long effort by the Trump administration to get India to lower the tariffs it imposes on American exports, among other things. What you need to know:

  • India sits No. 1 on the list in terms of the value of goods exported to the US under GSP, at $5.69 billion in 2017. Among the top categories: car parts, precious-metal jewelry, and insulated cable and wires. Fortune notes that was 11% of India's overall exports to the US that year. Turkey was in the 5th slot in 2017, at $1.66 billion.
  • President Trump often returns to the same example when discussing India's "tremendous, tremendous" tariffs, reports the Times: Harley-Davidson. India imposes a 50% tariff on its motorcycles. As a workaround, Harley-Davidson now produces almost all the bikes sold in India (3,000 in 2018) abroad to sidestep the tariff.

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