Welcome to Weise Wednesday! Twice a month we will share a brief Q&A with the former U.S. Commissioner of Customs, Mr. George Weise. If you have questions, we encourage you to send them to This email address is being protected from spambots. You need JavaScript enabled to view it..

 

Q: What new trade developments have you seen that would impact the U.S. trade community?

A: The two most impactful developments for the trade community relate to upcoming changes in eligibility for benefits under the Generalized System of Preferences (GSP) program and a change in the status of the U.S.-China trade dispute.

 

India and Turkey about to lose GSP eligibility

On March 4, U.S. Trade Representative Robert Lighthizer announced, at the direction of the President, that the United States intends to remove India and Turkey as beneficiary developing countries under the GSP program.  

According to the statement issued by USTR, “India’s termination from GSP follows its failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors. Turkey’s termination from GSP follows a finding that it is sufficiently economically developed and should no longer benefit from preferential market access to the United States market.”

These changes are expected to be effectuated by a Presidential Proclamation, but by statute, the changes cannot take effect until at least 60 days after official notifications are made to Congress and the governments of India and Turkey.  Unless negotiations between the parties can convince the U.S. not to move forward on these actions, importers can expect to pay increased tariffs on a number of products that had formerly been eligible for duty-free treatment under the GSP program.

 

Developments in the U.S.-China trade dispute

As I previously discussed, tariffs on numerous Chinese products imported into the U.S. that were  included on the so-called List 3 were scheduled to be increased from 10% ad valorem to 25% ad valorem on March 1, unless a substantial trade agreement was reached between the two countries.

The good news is that President Trump recently announced on Twitter that he would postpone that scheduled increase in tariffs because the ongoing trade talks between the U.S. and China have been going well. On Twitter, the President stated, "I am pleased to report that the U.S. has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues. As a result of these very productive talks, I will be delaying the U.S. increase in tariffs now scheduled for March 1st." The President concluded in his tweet, "Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement.”

This is clearly good news for global traders, assuming an agreement can be reached between the parties. What isn’t clear at this point, however, is how comprehensive the agreement is likely to be, and whether any of the previously implemented additional tariffs already imposed by both countries will be eliminated or continued. As always, stay tuned and stay engaged.