Apparel April 2019 Apparel May 2019 issue | Page 58

INDUSTRY INSIGHTS
overwhelming domestic and international support
India has in response to Trump’s threats. Since
the news of the announcement, major European
and international trade and business associations
representing apparel and footwear, as well as
importers have expressed concerns.
in the ready-made category under GSP that
contribute only about US$587 million to exports.
There is no denying that India is the largest
beneficiary from GSP from all developing nations,
and while this change in GSP status won’t impair
our global trade position, it will impact the lives
of real people. And as this decision impacts the
livelihood of small-scale exporters, specialised
crafters and some manufacturers, it will force US
importers to also seek out equally well-priced,
low-tech apparel from some other sources, which
may prove to be even more expensive in the long
run as the revocation will increase the price of
products to buyers by about seven per cent.
As per the rules of the Trade Act, once the
60 days have passed after the issuance of the
intention to withdraw GSP, the President is
required to issue a Proclamation to that effect.
But a finer reading of the rules tells us that there
is actually no prescribed timeline in place. This
implies that there is plenty of room for diplomats
and trade specialists on both sides to enter into
bilateral talks and resolve this issue. And we may
find this to be a far more likely outcome, given the
52
I APPAREL I
May 2019
TRUMP TRADE WARS
Nearly 24 major groups and associations such
as the American Apparel & Footwear Association
(AAFA), Footwear Distributors and Retailers
of America (FDRA), National Retail Federation
(NRF), Outdoor Industry Association (OIA), and
Retail Industry Leaders Association (RILA) have
taken a stance against the GSP withdrawal.
These groups have aggressively urged the
US government to not act rashly and to work
towards a mutually agreeable outcome. It’s worth
remembering that this is not the first time that the
Trump government has instigated a trade war
stance, and history has shown that it has not
really worked out in favour of the US.
Trump’s trade threats to China had an
immediate backlash as it sent the American stock
market falling and broke the positive economic
momentum that the Obama government had
started. The Trump government’s aggression
against China was mismanaged and has led to
retaliatory action from China that has impacted
US farmers and exporters to a great degree. This
decision is already coming to haunt Trump as it
makes his position in the next American election
weak across the US and has exposed the lack of
support he has in his own cabinet along with the
business community. It’s very likely that in the run-
up to the 2020 election, Trump will learn from this
mistake and retract the GSP threat.