US terminates Turkey’s preferential trade agreement, reduces tariffs on steel

The United States on Thursday terminated Turkey’s preferential trade treatment that allowed some exports to enter the country duty-free, but it has halved its tariffs on imports of Turkish steel to 25 percent.

The White House said it was appropriate to terminate Turkey’s eligibility to participate in the Generalized System of Preferences (GSP) program, based on its level of economic development. The decision is effective May 17, it added.

The US Trade Representative (USTR) in early March said Turkey was no longer eligible to participate because it “is sufficiently economically developed.” It had begun reviewing the NATO ally’s status in the program last August when the two countries were embroiled in a diplomatic row.

But Ankara had been hopeful that Washington would not go ahead with the decision, saying it would be against the $75 billion target for mutual trade laid out by President Donald Trump and Turkish President Tayyip Erdogan.

During last year’s spat, Trump had imposed higher tariffs on imports of Turkish steel and aluminum to put economic pressure on NATO member Turkey to force it to release Andrew Brunson, an American pastor who was detained there over terrorism charges. Brunson was released last October.

Trump’s move had sent the Turkish lira into a tailspin. Since then, the ties between the two countries have remained tense over disagreements ranging from Ankara’s planned purchase of a Russian missile system to diverging interests in Syria. In a subsequent statement on Thursday, the White House said it was reducing the 50 percent tariff, doubled last August, to 25 percent.

“Maintaining the existing 25 percent tariff on most countries is necessary and appropriate at this time to address the threatened impairment of the national security,” it said.

Turkey was one of 120 countries that participate in the GSP, the oldest and largest US trade preference program. It aims to promote economic development in beneficiary countries and territories by eliminating duties on thousands of products.

The United States imported $1.66 billion in 2017 from Turkey under the GSP program, representing 17.7 percent of total US imports from Turkey, according to USTR’s website.

The leading GSP import categories were vehicles and vehicle parts, jewelry and precious metals, and stone articles, the website said.