America’s year-long trade war with China is pushing US companies to source more from GSP beneficiary countries such as India, Thailand, Cambodia, Indonesia and Turkey, a report said Tuesday.
The Coalition for GSP, a group of American companies and trade associations, in a report said the latest official trade figures show that the Generalised System of Preference or GSP saved American companies $105 million in March, an increase of $28 million (36 per cent) from March, 2018 and the second-highest level on record.
In the first quarter of 2019, the GSP saved American companies $285 million, which is $63 million more than the first quarter of 2018.
The GSP is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
On March 4, President Donald Trump announced that the US intends to terminate India as a beneficiary developing country under the GSP programme. The 60-day notice period ended on May 3.
Noting that imports from China, subject to new tariffs, are down significantly, the coalition said imports of products from other GSP beneficiaries have increased the most in the first quarter of 2019.
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According to the report, India benefits the most from this.
“For India, 97 per cent of increased 2019 GSP imports are on the China Section 301 lists. GSP imports on Section 301 lists increased by $193 million (18 per cent), while imports of everything else increased by just $7 million (two per cent),” it said.
In another report, the coalition said cancelling the GSP for India would benefit China.
Referring to the results of a recent survey, the coalition said 30 per cent of companies would look to source more from China if GSP benefits are done away with.