US to review Turkey's trade preferences after tariff retaliation

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

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

A spokeswoman for the Trade Department said the review was unrelated to issues surrounding Andrew Brunson, a U.S. pastor on trial in Turkey for links to the Gülenist Terror Group (FETÖ) and the PKK, which is recognized as a terrorist organization by the U.S.

"The Trump Administration has concerns with Turkey's compliance with GSP's market access criterion," said Deputy U.S. Trade Representative Jeffrey Gerrish. "We hope that Turkey will work with us to address the concerns that led to this new review of their duty-free access to the United States."

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.

The 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 tariffs on U.S. goods entering Turkey."

A public hearing and comment period for Turkey's GSP eligibility review will be announced in an upcoming Federal Register notice, the department's statement said.

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.

Meanwhile, the Trade Department 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.