It’s the end for duty free eligibility on India textiles

Importers of India-made home textiles products, take note: Effective today, eligibility
for duty free entry into the US for all India-made textiles products was terminated.
This latest trade development emerged May 31 when President Trump signed the
proclamation ending Generalized System of Preferences (GSP) eligibility for India.
Customs attorney Robert Leo, who serves as legal counsel of the Home Fashion
Products Association (HFPA) and is a partner at Meeks, Sheppard, Leo & Pillsbury,
issued a memo to HFPA members on Monday regarding the status change.
“This move by the U.S. was not unexpected,” he noted. “There is no exemption or special
treatment indicated for goods in transit.” Since November 1st, a list of 50 Indian-made
products — among them hand-loomed textiles and rugs — that were previously dutyfree became subject to regular tariffs.
“My reaction is that it is disappointing and it is a shame it had to come to this point,”
Leo told PBM. “This was obviously done to force India to try to give the US better access to their markets,” he continued. “Overall, it’s more of a trade issue than a specific product-byproduct issue.” Petitions on products aren’t really going to help, he warned. As of Tuesday night, no HFPA members had responded to Leo’s memo with comments or questions. But Leo is not surprised.“There may be some home accessory products that are now subject to tariffs. But nothing has really changed for bedding or other fabric textiles products because they are already at that normal duty rate, which for home fashions is usually higher than 3% for pillows and sheets and things like that. It’s closer to 6%, or 8% to 12%, and they’ve been paying that all along for India,” Leo explained. “That is probably why I didn’t get a lot of feedback from my memo.”
Kas Rugs’ Hari Tummala, VP, said the impact on the company’s rug imports are
expected to be “minimum.”
He continued: “We are currently paying 6% duty on tufted rugs from India and it will
remain the same. As of now, there is no duty on hand-knotted/hand-loomed products,
and we were told it remains the same. Poufs out of India are subjected to a 6% duty.”
But on a broader scale, the effects on the American economy could be crippling –
“costing American businesses over $300 million in additional tariffs every year,” warned
Dan Anthony, executive director of The Coalition for GSP, in a statement he released
Friday.
“Without GSP benefits American small businesses face a new tax that will mean job
losses, canceled investments and cost increases for consumers,” he noted. “There are no
winners from [this] decision. American importers will pay more, while some American
exporters will continue to face current market access barriers in India and others…In
the weeks ahead we urge the Administration to restart negotiations and strike a deal
that reinstates GSP eligibility for India. American companies and workers that rely on
the GSP savings are depending on it.”