Welcome to Renew GSP Today

Thanks for stopping by to check out our website about the GSP trade program.  Despite a “long-term” renewal in 2011, the GSP program expired on July 31, 2013. As a result, American companies now face an estimated $2 million per day in new taxes.

If you’re one of those companies paying higher taxes, be sure to get engaged in GSP renewal by:

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5 More Companies Join the GSP Supporter List

While Congress tries to figure out next steps for the GSP renewal legislation passed by the Senate Finance and House Ways and Means Committees last week, five new companies have joined the group of American organizations urging Congress to renew the program. In total, there are now 696 companies and associations publicly supporting GSP renewal.

The companies are now headquartered in 46 states and 293 congressional districts (plus DC and Puerto Rico) and 81 percent are small businesses with 100 or less employees. The typical company has just 15 employees.

 

Despite going on nearly 2 years of GSP expiration, we continue to hear from new companies all the time. And we’re not just hearing from folks with minor impacts: among the 13 companies that joined the supporter list in April, combined tariffs paid to date because of GSP expiration were at least $1.4 million (several did not report their tariffs paid).

While everyone loves round numbers, hopefully Congress can get GSP renewal legislation over the finish line before we hit 700 GSP supporters (or more).

 

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Rep. Boustany on the Impacts of GSP Expiration

In this morning’s House Ways and Means mark up of the trade preferences bill, Representative Charles Boustany (R-LA) spoke about the importance of renewing GSP for companies in the United States, Louisiana, and his 3rd District. In particular, he highlighted the impacts of expiration on K2 Coolers in New Iberia (clip below).

K2 Coolers is one of the nearly 700 companies and associations that have come out in support of GSP renewal – and not the only supporter list company mentioned during the mark up. In his introduction of the bill, Ways and Means Trade Subcommittee Chairman Pat Tiberi (R-OH) noted that GSP renewal would help companies like The Cannon Group in Westerville grow their businesses and “ultimately create jobs.”

Be sure to watch the clip of Dr. Boustany’s remarks and if you’re active on Twitter, please click here and retweet him!

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Senate Finance, House Ways and Means Committees Pass Legislation to Renew GSP

It’s been a good 18 or so hours. Early last night, the Senate Finance Committee approved legislation that would renew GSP, along with special preferences for African countries and Haiti. The version approved by the Finance Committee contained several amendments to the original bill, including one that would make travel goods (e.g., luggage, backpacks, purses) eligible for GSP benefits.

This morning, the House Ways and Means Committee also approved legislation that would renew GSP and the other preferences. Ways and Means did not approve any changes to the original bill. Both Senate Finance and House Ways and Means approved the preferences bill by a voice vote.

Differences between the House and Senate bill will need to be resolved before GSP renewal can move ahead.

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GSP Survey Responses from Companies in Ways and Means Districts

The House Ways and Means Committee is currently holding a hearing on the trade agenda, so it seems appropriate to highlight survey responses from companies located in Ways and Means members’ districts. You can see previous survey responses here, here, and here (and answer the survey yourself here). We’ll start with an easy one, as we profiled them the other day…

Pacific Paper Export in Seattle, Washington is a small business that imports sauces and chutneys from Pakistan. Sales of products that needed to be priced higher fell and the company was unable to expand warehouse operations as planned due to lower import volumes. The company believes lower prices associated with a reinstated GSP would lead to a 30 percent increase in imports and allow it to bring on new employees. (Represented by Congressman Jim McDermott (WA-7), an original cosponsor of the GSP renewal legislation. Pacific Paper Export is currently one of nine GSP supporter list companies in the district.)

Scrimco, Inc. in Fresno, California is a small business with 15 employees that imports polyester film. Ultimately these products end up in flexible air ducts manufactured in the United States. The company has paid more than $100,000 in import duties. The need to take a ‘wait and see’ attitude has prevented Scrimco from investing in new production equipment to improve efficiencies. The company believes GSP renewal will allow it to hire new workers and make the investments necessary to improve its domestic manufacturing capabilities. (Represented by Congressman Devin Nunes (CA-22). Scrimco is currently one of two GSP supporter list companies in the district.)

Pegasus Imports in Santa Rosa, California is a small business that imports jewelry beads and handicrafts from India and Turkey. The three-person company has paid $60,000 in import duties since GSP expired. The proposed legislation would allow Pegasus to hire two part-time workers and give raises to its current employees. The company also plans to invest in new equipment, such as a 3D printer and software, that will allow it to model new items and hopefully increase future sales. (Represented by Congressman Mike Thompson (CA-5). Pegasus is currently the only GSP supporter list company in the district.)

Engineered Components Co. in Elgin, Illinois is a small business that imports bolts and screws from Thailand. The company has paid $30,000 in tariffs on these products, which are used by American trailer manufacturers. Because Engineered Components has locked-in prices with its customers, it has no choice but to take a hit to its profits. The company believes GSP renewal will allow it to increase import volumes and grow the business. (Represented by Congressman Peter Roskam (IL-6). Engineered Components Co. is currently one of five GSP supporter list companies in the district.)

dZi Inc. in Easthampton, Massachusetts is a small business with 10 employees that imports artisan jewelry and handicrafts from Nepal and India. The company has paid $30,000 in import duties since GSP expired, which as had a number of effects: the company increased the deductible limit in the health program from $500 to $2,000; it postponed spending $15,000 on outside consulting firms for upgrading the e-commerce program, and saw a “notable reduction in orders” after raising prices. If GSP is renewed retroactively, the company could afford to hire a new marketing person, lower the health care deductible, and move ahead with its spending plans. (Represented by Congressman Richard Neal (MA-1). dZi is currently one of two GSP supporter list companies in the district.)

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More GSP Survey Responses: “revenue dropped by more than half a million dollars and several employees had to be let go”

Reynolds_PolymerGSP-eligible acrylics in action at the underwater Ithaa restaurant in the Maldives

Below are some new responses to our GSP reauthorization survey from companies in Colorado, Maryland, and Texas (to go along with responses highlighted yesterday and the day before).

With the Senate Finance and House Ways and Means Committees both expecting to hold trade hearings and votes this week, we’re trying to collect as many responses as possible (ASAP). If you haven’t answered the survey yet, please take a moment to do so here.

Burris Company in Colorado imports sporting rifle scopes from the Philippines. In July 2013, the company decided to expand domestic manufacturing, but those plans were put on hold when GSP expired two weeks later. Since then, Burris has paid about $2.5 million in extra import taxes. The tariff refunds and guaranteed GSP benefits through December 2017 would allow Burris to move ahead with its expansion plans, including an investment in a new facility and CNC machinery that would create 10-15 permanent, high-paying manufacturing jobs in Colorado.

Reynolds Polymer Technology in Colorado imports acrylic sheet from Thailand used in the design and manufacture of custom aquarium windows and other specialty acrylic structures (pictured above). Since GSP expired, the company has paid about $300,000 in extra import taxes for this key component. Overall, revenue dropped by more than half a million dollars and several employees had to be let go. The proposed GSP renewal legislation would lower costs again, allowing Reynolds Polymer to increase sales and hire new workers again.

COLE-TUVE, Inc. is a small business in Maryland that imports Turkish metal fabricating machinery used by U.S. manufacturers. It has paid about $75,000 in extra tariffs because of GSP. Higher prices have forced COLE-TUVE to reduce inventories, and the company has lost about $250,000 in sales to customers that need quick delivery and cannot wait for a new order from Turkey. The company believes the proposal GSP renewal would allow it to increase both inventories and sales, as it would no longer need to turn customers away. The company could also give retirement contributions and annual raises again – both of which have been frozen since GSP expired – and “hopefully hire a new service man.”

Mediterranean Delight is a small business in Texas that specializes in olive oil imports from Tunisia. The company has paid more than $150,000 in tariffs because of GSP expiration and “lost sales that would have allowed the hiring of at least 4 more employees.” By refunding tariffs paid and giving Tunisian olive oil a tariff preference once again, the proposed GSP renewal legislation would allow Mediterranean Delight to hire 3 new account managers immediately. When sales growth returns to pre-GSP expiration levels, the company hopes to hire 6 more. In the meantime, Mediterranean Delight also plans to increase health care contributions to its existing employees.

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New GSP Survey Responses: “A refund of tariffs would be just the shot in the arm we need”

Yesterday we highlighted some of the early responses to our latest latest survey. With lots of trade action expected in Congress during the upcoming week, we need as many survey response ASAP.

So no one thinks we’re only interested in responses from companies willing to go on-the-record, here are several more incredibly detailed and helpful responses from companies provided on a strictly not-for-attribution basis.

A wholesaler of jewelry with 30 workers in New Jersey has paid about $2 million in import taxes since GSP expired. Sales are also down about 30 percent compared to when GSP was in place, forcing the company to freeze hiring and cancel expansion plans. The owner of the company estimates that refunded tariffs and lower costs going forward will allow it to hire 5-10 additional workers.

A small wholesaler of raw materials to U.S. manufacturers in New York has paid $154,000 in additional tariffs – despite losing an estimated $4.2 million in sales – because of GSP expiration.  As a result, the company laid off 2 workers and cut salaries for the remaining workers by 30 percent. According to the owner, “Our cash flow has gotten so tight that we have lost our favorable bank financing terms…[and] paid over $38,000 in increased bank financing costs.Those financing costs mean that a quarter of any GSP refund has already been spent. (We wrote about financing problems for other companies here.) Yet the proposed GSP renewal bill would allow the company to rehire one worker, return pay to previous levels, bring in about $3 million more in product annually, and hopefully get favorable financing terms from the bank once again.

A small business with 20 employees in California that imports from artisans in Thailand, Indonesia, Brazil, and India has paid about $175,000 in tariffs since GSP expired. According to the owner, “The number one enemy has been the uncertainty. Do we raise prices now? By how much? We’ve had to hedge against GSP never coming back, which has prevented us from being aggressive with pricing and hurt us as we compete on price with mass produced imports from countries such as China.” Knowing that tariffs are coming back and benefits would be guaranteed through December 2017 would allow the company to get more aggressive. The owner continued, We’re needing to expand our operations team, and a refund of tariffs would be just the shot in the arm we need to do so.”

We need more of these examples to share with congressional staff (and publicly if allowed), so please answer our survey here if you haven’t done so already.

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GSP Reauthorization Survey: Preliminary Answers

With a new GSP bill introduced on Thursday, we launched a new survey yesterday to help show why swift passage of the GSP renewal legislation is critical for US businesses. We expect a number of trade hearings the week of April 20, so please answer the survey ASAP if you’re impacted by GSP expiration (and haven’t answered already).

Special thanks to those companies that not only responded, but have allowed us to publish their survey responses. Here are just a few of the 50 or so responses received to date. Again, if you haven’t done so already, please answer our survey here.

Summit Specialty International in Georgia imports interior pine doors from Brazil. With total sales of about $4,000,000, the $150,000 in GSP payments was an extreme burden. According to owner Alex Livingston: “I have not been able to provide medical insurance (or even consider it) for my five employees. I pay them well above minimum wage and would like to provide them more benefits. I could also use additional office help. The return of the tariff money from the previous year and the additional margin will allow me to hire another worker, give raises, and invest in additional inventory, thus increasing sales.”

Associated Textile Mills in New York is a small business that imports tarps and drop clothes from India. GSP expiration has cost the company $70,000 in additional tariffs and results in a drop in sales. As a result, the company froze salaries and employees were forced to contribute to their health benefits. The proposed GSP renewal legislation would allow the company to eliminate the employee contributions to health benefits and hire two new employees, as it expects import volumes (and therefore sales) to increase significantly without the tariffs in place.

Pacific Paper Export in Washington is a small business that imports sauces and chutneys from Pakistan. Sales of products that needed to be priced higher fell and the company was unable to expand warehouse operations as planned due to lower import volumes. The company believes lower prices associated with a reinstated GSP would lead to a 30 percent increase in imports and allow it to bring on new employees.

Posted in Brazil, Georgia, India, New York, Pakistan, Washington | Tagged , , | 1 Comment