Exports likely to be hit as US moves to end major trade benefits to India

Economy News

Ending months of speculation, the Donald Trump administration has decided to cut benefits to Indian exporters under its Generalized System of Preferences (GSP) scheme.

"At the direction of President Donald J Trump, US Trade Representative Robert Lighthizer announced today that the United States intends to terminate India's and Turkey's designations as beneficiary developing countries under the GSP program because they no longer comply with the statutory eligibility criteria", the United States Trade Representatives office announced late on Monday.

India, having exported goods worth $5.6 billion to the US in 2017-18 under GSP, is the largest beneficiary of the scheme. The GSP is the largest and oldest US trade preference programme designed to promote economic development by allowing duty-free entry for thousands of products, mostly from developing nations.

While Turkey was also been removed from the GSP list on Monday, the USTR came down particularly hard on India. "India has implemented a wide array of trade barriers that create serious negative effects on United States commerce," it said.A long time coming

 Back in November last year, the US President had signed an executive order to end the duty-free status of 50 Indian exports to the US. These included inorganic and organic chemicals, agricultural products like cucumbers and gherkin, and certain types of animal hide. These were part of a global list of 90 items — from a large group of nations including Brazil, Argentina, Thailand, Egypt and Ecuador — for which prevailing rates of import tariff were to be be levied when imported into the US.

Trump move to end preferential trade treatment won't hurt India much: Govt

Economy News

India does not plan to impose retaliatory tariffs on US goods after US President Donald Trump said he intends to end India's preferential trade treatment, a top trade official said on Tuesday.
Anup Wadhawan said the withdrawal of the Generalised System of Preferences for Indian products would have limited impact.

The two countries had been working on a trade package to address each other's concerns, he said.Under the GSP program, India exports $5.6 billion worth of goods to the United States duty-free.
Arguing that New Delhi had failed to assure America that it would provide equitable and reasonable access to its markets in numerous sectors, US President Donald Trump on Monday informed the US Congress about his intent to terminate the designation of India and Turkey as a beneficiary developing country under the Generalised System of Preferences (GSP) programme.

In a letter to the Speaker of the US House of Representatives, Nancy Pelosi, Trump said he was determined that New Delhi had "not assured" the United States that it would "provide equitable and reasonable access" to the markets of India.

"I will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria," Trump said in his letter, a copy of which was released to the press.


 In a separate letter, Trump also informed the Congress of his intent to terminate the GSP beneficiary designation of Turkey. This was primarily because the economy of Turkey had improved a lot in the last four-and-a-half decades, he said...Read More

Global stocks rise with yuan on optimism for US-China trade deal

International News

Stocks advanced in Europe and Asia while the Yuan strengthened after the US and China were said to be close to a trade deal that may end American tariffs in return for Chinese concessions. S&P 500 futures climbed, while the dollar fluctuated and Treasuries held steady.

Gains in miners and media companies led the Stoxx Europe 600 Index to five-month high. Earlier in Asia, Chinese and Japanese stocks saw the biggest advances, though several markets pared increases as the session progressed. The mooted trade deal would require Beijing to follow through on pledges ranging from better protecting intellectual-property rights to buying a significant amount of American products, two people familiar with the discussions said. The dollar nudged higher even after US President Donald Trump warned against it becoming too strong.

“While we have all these great headlines about what could be achieved under a US-China trade agreement, we’re still a little way away,” said Kerry Craig, JP Morgan’s global market strategist. “There could be a chance for a disappointment. It could be phased in over a number of years. There’s still questions about how and what China will actually buy to try and reduce their deficit.”

Signs of progress between Beijing and Washington are helping revitalize a rally in global equities that showed signs of stalling last week. The market will keep focused on both superpowers for other developments as well: China’s annual National People’s Congress may yield policy clues when it kicks off on Tuesday and investors will get the latest read on the US economy with the monthly jobs report on Friday.


 Elsewhere, the pound rose against the euro, approaching a 21-month high it touched last week, amid optimism UK lawmakers are avoiding a hard Brexit by moving toward supporting Prime Minister Theresa May’s proposed deal. West Texas oil climbed above $56 a barrel on signs of slowing US production growth and as OPEC and its allies deepened cutbacks...Read More

China to pass new foreign investment law to meet US' demand, end trade war

International News
China is all set pass a new foreign investment law to provide a level playing field to global investors with legal safeguards on IPR and technology transfer, some of the main demands of US President Donald Trump to end the trade war between the world's two largest economies.

The US and China are locked in a trade war since Trump imposed heavy tariffs on imported steel and aluminium items from China in March last year, a move that sparked fears of a global trade war. In response, China imposed tit-for-tat tariffs on billions of dollars worth of American imports.
China is the world's second largest economy after the US.

The draft foreign investment law will be submitted to the top legislature, the National People's Congress (NPC), for review on March 8 and put for vote on March 15, Zhang Yesui, spokesman of the NPC said on Monday.

Asked why China is passing the new foreign investment law in a hurry, Zhang said that the interests of China and the United States are deeply interwoven and a confrontational China-US relationship does not benefit anyone.

China has a clear policy towards its relationship with the US, which is based on no-conflict and no-confrontation, mutual respect and win-win cooperation, he said.


 The adoption of the foreign investment law is an innovation in the legal system on foreign investment and is to replace the existing three laws and serve as the basic law on foreign investment as China continues to open up in the new era, Zhang said...Read More

South Korea war games too expensive for US: Trump on ending military drill

International News

US President Donald Trump denied that he ordered an end to major US-South Korean military exercises as a concession to North Korea's totalitarian leader Kim Jong Un.
The previously annual, large-scale manoeuvers -- meant to keep troops ready in case of conflict with North Korea -- were shelved shortly after Trump's summit last week with Kim in Hanoi.
Trump denied there was any link.
"The military drills, or war games as I call them, were never even discussed in my mtg w/ Kim Jong Un," he tweeted.
"I made that decision long ago because it costs the U.S. far too much money to have those 'games', especially since we are not reimbursed for the tremendous cost!" he said in the tweet.
There are close to 30,000 US troops stationed in South Korea, and their annual drills with tens of thousands of South Korean soldiers have angered North Korea, which claims they are rehearsals for invasion.
While Trump has ruled out withdrawing US troops, he has repeatedly complained about the cost of the exercises, describing them at a press conference in Hanoi as "very, very expensive".

 Trump's summit with Kim ended with no progress toward Washington's goal of getting the isolated country to give up its nuclear weapons...Read More