GSP terminations for India and Turkey could take effect as soon as Saturday, May 4. Nothing happens automatically – a Presidential Proclamation setting an implementation date must be issued – after May 4 any such proclamation can take effect immediately.
Kicking India and Turkey out would cost American companies over $300 million annually in new tariffs paid. But in the case of India, it also could lead to (technically unrelated) new tariffs on US exports.
India repeatedly has delayed implementing retaliatory tariffs on US exports in response to US Section 232 steel and aluminum tariffs, despite notifying the WTO of its intent to do so last May. Top US exports on the list include apples, almonds, and chemicals. It has been understood that delays were tied to ongoing US-India talks over GSP and other trade irritants. Tariffs currently are scheduled to take effect on May 2
Indian press has reported that tariffs likely will be delayed again – at least for a little while. “India may not wait till May 15 for imposing the retaliatory duties but may come up with a separate notification for immediate implementation” if GSP benefits are terminated in the interim.
Based on 2018 trade data, the tit-for-tat escalation could lead to nearly $500 million in new tariffs on two-way, US-India trade. The table below shows the state-by-state breakdown.
Some states clearly would be hurt more by tariffs on imports: Georgia, New Jersey, Florida, Virginia, Texas. Others clearly could be hurt more by new tariffs on their exports: California, Washington, North Carolina, Alabama.
Of course, all the tariffs likely could be avoided if the President does not issue a proclamation terminating GSP benefits for India, as has been requested by over 430 US companies and associations, 25 associations; and Senators John Cornyn and Mark Warner.
Sometimes the best course of action is no action at all.