US reviewing Turkey's duty-free access to its markets after tariff retaliation

WASHINGTON - Reuters

The Trump administration on Friday launched a review of Turkey's duty-free access to U.S. markets under the Generalized System of Preferences after Ankara imposed retaliatory tariffs on U.S. goods in response to American steel and aluminum tariffs.

The U.S. Trade Representative's office said the review could affect $1.66 billion worth of Turkish imports into the United States that benefited from the GSP program last year, including motor vehicles and parts, jewelry, precious metals and stone products.

A USTR spokeswoman said the review was unrelated to issues surrounding Andrew Brunson, a U.S. pastor on trial in Turkey for backing a coup attempt in Turkey two years ago - a case that has prompted U.S. sanctions against two Turkish cabinet ministers.

Those incidents have recently helped push U.S.-Turkey relations to their lowest point in decades. The announcement from USTR follows by hours new pledges from U.S. Secretary of State Mike Pompeo and Turkish Foreign Minister Mevlüt Çavuşoğlu to try to resolve differences between the two NATO allies.

TARIFF RETALIATION

The USTR spokeswoman said the review "focuses on the Turkish government's compliance with the GSP market access criterion and was prompted by the Turkish government's recent imposition of unfair and unwarranted tariffs on U.S. goods entering Turkey."

Turkey retaliated against U.S. tariffs on steel and aluminum imposed in March by slapping import duties on $1.78 billion worth of U.S. products, including coal, paper, nuts, whiskey, autos, machinery and petrochemicals.

The Trump administration considers such retaliation illegal under World Trade Organization rules and has launched a WTO challenge to such duties imposed by Turkey, China, the European Union, Canada and Mexico.

Meanwhile, USTR considers the U.S. steel and aluminum tariffs to be justified because they were imposed on national security grounds, which it says fall under an exception from WTO rules. But U.S. trading partners argue that the metals tariffs are merely illegal safeguard actions designed to protect U.S. producers.

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