Tuesday, March 5, 2019

Trump’s New Trade War Foes: India and Turkey

Interesting, no?
Surprising? Not in the least.

Fortune
President Donald Trump announced Monday his intentions to end preferential treatment for India and Turkey that allows billions of dollars’ worth of exports to enter the U.S. duty-free.

The biggest beneficiary of the so-called Generalized System of Preferences, India exported $5.6 billion of products to the U.S. duty-free in 2017 thanks to the program, and Turkey was No. 5 on the list, importing $1.7 billion of products duty-free.

Trump has frequently taken India to task for its tariffs on U.S. imports. “I am taking this step because, after intensive engagement between the United States and the government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India,” Trump told congressional leaders in a letter.
Is a lack of access to Indian markets the only reason Trump has decided to target India? 

Could there be other reasons? Of course there could be! Starting to feel like sanctioning without calling it sanctions..

1- Refusal to comply with ostracizing Venezuela

Important! :India Does NOT Support/Recognize Venezuela's Self Declared President 

India refuses to join efforts to recognise self-declared president of Venezuela
 India on Friday refused to be part of any efforts to recognise self-declared president of Venezuela and asserted that it is for the people of that country to find political solution obliquely rejecting outside interference in a country's internal affairs.
The hardline US National Security Adviser John Bolton has issued a warning to India against buying Venezuelan oil, saying it "will not be forgotten"
2- Trading with Iran 


 How about Turkey? 

I don't even know where to begin with the many reasons the US would have to target Turkey- Number 5 on the list. Oh let's give it a go! Off the top of my head.. 

1- Not complying with the remake agenda
2- Won't go along with their own destruction
3- Purchasing s-400's from Russia
4- Cooperating with Russia and Iran
5- Displeasure expressed loud and clear with the attempted coup
6- Cleaned house of US/NATO allies in the Turkish military
7- Displeased with the US refusal to extradite Gulen
8- Wants US proxy PKK/SDF away from their border
9- Pipeline with Russia 
10- Trades with Venzuela despite US edicts

I'm sure there are still more reasons the US would target Turkey that have nothing to do with them being # 5 on the list? I mean what about numbers 2, 3 and 4?

As we read on through the Fortune article you get an understanding that, yes, this move is about geopolitics...

 Fortune con't: At the Conservative Political Action Conference on Saturday, Trump said, “India is a very high-tariff nation. They charge us a lot. … When we send a motorcycle to India, it’s a 100% tariff. They charge 100%. When India sends a motorcycle to us, we brilliantly charge them nothing.” Trump has mentioned India’s 100% motorcycle tariff before, but in fact Indian President Narendra Modi lowered tariffs on U.S. motorcycles from 75% to 50% in 2018.

And Turkey has now outgrown the system’s incentives, Trump wrote in a separate letter. “Increases in Gross National Income per capita, declining poverty rates, and export diversification by trading partner and by sector are all evidence of Turkey’s increased level of economic development,” he wrote. “The United States remains committed to fair and reciprocal trade with Turkey.”

Turkish President Recep Tayyip Erdogan has been on Trump’s bad side for a while.
In April 2018, Erdogan called for a boycott on U.S. electronics in an effort to support domestic phone makers; the Turkish lira went into a tailspin shortly thereafter.
Removing Turkey’s and India’s access to the Generalized System of Preferences, an incentive from the 1970s meant to encourage economic growth in developing countries, will take effect 60 days after notification of Congress and the respective governments.

Reacting to the news, Indian Commerce Secretary Anup Wadhawan argued that the program gave India an actual benefit of just $190 million annually. “Discussions are on with the United States, and given cordial and strong ties, keeping retaliatory tariffs out of it,” he told reporters. “The government will internally review the retaliatory tariff issue.”

Reuters reports India’s top duty-free exports to the United States in 2017 were motor vehicle parts, ferro alloys, precious metal jewelry, building stone, insulated cables and wires, but export-oriented industries such as pharmaceuticals and textiles are also likely to be affected.
 The trade dispute may affect the election Indian Prime Minister Narendra Modi faces in April, the Financial Times reports. In the past year, Modi raised import tariffs on a variety of U.S. goods to support domestic manufacturing, which was a blow to American companies such as Apple and Ford. It’s worth noting that India’s $5.6 billion of duty-free exports to the U.S. in 2017 accounted for just over 11% of its $48 billion total to the U.S. that year.
Interfering in an election? Perhaps that's what was going on with the recent rise in tensions in Kashmir?  Pressuring Modi? Yes, I'm still of the mind that a third party/ies were stirring the pot in Kashmir.
The U.S. Trade Representative’s Office says trade debt with India totaled $27.3 billion in 2017. The Wall Street Journal reports the Census Bureau will likely report that the U.S. registered its largest trade deficit ever in 2018 despite Trump’s aggressive trade policies.

India, the world’s largest democracy, is also a major emerging market. More than a third of India’s 1.4 billion people are now online, double the level of three years ago. Given that Google and other Western tech giants are essentially shut out of China, no other country offers a bigger opportunity to add hundreds of millions of users than India.
Walmart last year spent $16 billion to acquire Indian e-commerce platform Flipkart. But trade ties with the United States began to sour after India adopted new e-commerce rules restricting how Internet giants such as Amazon and Flipkart can do business in the country.

Related:

 Trudeau/SNC Scandal:

 What warming?

btw: awoke this morning to a chilling -14.22C or 6.4F

 

 

4 comments:

  1. Just to add to reasons why the US is pressuring India, under Modi, the country signed a deal with Russia to secure deliveries of the S-400. India also signed a deal for a third nuclear sub to be leased from Russia. The two agreed that the systems would be paid for with their respective national currencies.

    S-400 link: https://economictimes.indiatimes.com/news/defence/india-to-receive-s-400-in-due-time-russia/articleshow/67458147.cms

    Sub link: https://www.timesnownews.com/india/article/india-russia-nuclear-submarine-deal-us-sanctions-ins-chakra-s-400-triumf-defence-missile/378754

    Meanwhile, Turkey has doubled down on their S-400 deal with Russia and have expressed interest in the S-500.

    Link: http://tass.com/defense/1047771

    ReplyDelete
    Replies
    1. thanks for the additional information
      did not know about the nuclear sub!

      It does appear to me that Modi is being pressured. Which means at any time the Kashmir situation can be heated up or cooled at will- not good :(

      Delete
    2. Looks like the mask has come off now. Elliot Abrams is now demanding India hand over its sovereign right to buy Venezuelan oil or else.

      Link: https://www.reuters.com/article/us-venezuela-politics-india-envoy/u-s-pressing-india-to-stop-buying-venezuelan-oil-envoy-idUSKBN1QR0DC

      Delete
    3. Hey Anonymous:
      Timely comment :)
      I was going to get back to India today..
      Thanks and I will credit you for the news, of course

      Delete

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