The USTR announced on August 3rd that it will review Turkey’s eligibility for the Generalized System of Preferences (GSP) program that grants duty-free access to the U.S. market. GSP is a U.S. trade program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories. Concern over Turkey’s “compliance with the GSP market access criterion,” led the USTR to initiate the review. This also follows Turkey retaliatory tariffs on U.S. goods in response to the Section 232 tariffs imposed by the U.S. in March. Earlier this year, Commerce submitted reports to President Trump stating U.S. importers’ reliance on foreign-made aluminum and steel posed a national security risk.
In 2017, the top categories of goods imported from Turkey under the program were vehicles and vehicle parts, jewelry and precious metals, and stone articles. The final decision on Turkey’s GSP status will be made after a public hearing and comment process.
Steel imports from Turkey have fallen significantly according to data from the U.S. International Trade Commission. Steel imports from Turkey were 1.3% of total U.S. steel imports from January to June of 2018 and dropped over 41% since June 2017. Following on the heels of the USTR’s announcement regarding Turkey’s GSP eligibility review, on August 10, 2018, President Trump threatened to double the Section 232 tariffs on steel and aluminum imports from Turkey, to 50 percent and 20 percent, respectively claiming that the existing tariffs have less of an impact due to Turkey’s currency, the lira, depreciating against the U.S. dollar.
The White House issued the following statement:
“[T]he President has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey. Section 232 tariffs are imposed on imports from particular countries whose exports threaten to impair national security as defined in Section 232, independent of negotiations on trade or any other matter.”
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