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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NEW REPORT: Lost Sales, Investments, and Jobs – Impact of GSP Expiration After One Year

A report released today by the Coalition for GSP adds further urgency to the need to Congress to renew GSP immediately. The report, Lost Sales, Investments, and Jobs: Impact of GSP Expiration After One Year, catalogs the impacts of GSP expiration on more than 200 companies and shows that delayed renewal is forcing companies to take drastic actions.

For example, Matrix Metals laid off 75 workers at facilities in Iowa and Texas, while Vispak LLC in Minnesota is going out of business completely. These are just two of the numerous examples cited in the report, which is can be downloaded here. You can also download a copy of the Coalition’s press release here.

If you’re a company being impacted by GSP expiration, please help us publicize the findings by sharing it on Twitter, Facebook, LinkedIn, etc. You can use the share buttons below to do so.

Sending the report to your Representatives and Senators also would provide a great opportunity to ask what concrete steps they are taking to get GSP renewed (particularly since many will be asking for your vote in the next 6 weeks).

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Reminder: Last Day to Answer GSP Expiration Survey

Before leaving for the holiday weekend, please answer the GSP expiration impact survey if you haven’t already. It should only take a few minutes.

We want the best report possible waiting when Congress returns to DC on September 8, which requires responses from as many GSP importers as possible. All company responses will remain confidential unless you provide explicit permission to use the information publicly.

The best part? After you answer the survey, you have the Coalition’s official blessing* to cut out of the office and kick off the long weekend!

Just be sure to follow this link and answer the survey first!

* May not be recognized by all companies and/or bosses.

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A Wholly Predictable (and Avoidable) Situation Unfolds in Slow Motion

On Friday we wrote about these being very tough times for many GSP importers. As we compile responses from our most recent survey, it’s painful to read about how lives have been hurt by GSP expiration. And why? At the most basic level, these people are suffering for two reasons:

  1. *only* 99 percent of Senators supported GSP renewal legislation in July 2013, and
  2. “procedural hurdles” and partisan gridlock have prevented Congress from taking a vote on GSP since then.

13 months and Congress can’t even take a vote on something costing American companies nearly $2 million per day! One such company is New York-based Sophia Foods, which according to owner Candace Abitbul has paid nearly $50,000 in import taxes, laid off two employees, and halted a planned purchase of a new property that would allow the company to double in size because of congressional inaction. Candace added:

“Due to declining profitability directly related GSP the future of our entire organization and the families we employ and support is at stake. It is so sad to feel the product line and brand we have spent our entire adult lives building is hanging in limbo at risk of declining due to a policy over which we have no control.”

In a vacuum, such a response might surprise those that underestimate GSP’s importance for American companies and workers. But this was a wholly predictable and avoidable situation. Congress should have seen it coming, in no small part because companies like Sophia Foods warned them in advance.

The timeline below highlights Sophia Foods’ experience over the last several years, both in terms of the business impacts of GSP expiration and its efforts to engage Congress. This is by no means comprehensive, just what they’ve shared with us along the way, and there are many other companies with similar experiences.

In May 2011, Sophia Foods first contacted us to say that it had contacted its representatives about the impacts GSP expiration was having on its business.

By June 2011, Sophia Foods had been forced to lay off 2 workers to stay afloat in light of plummeting profits associated with its GSP imports.

In October 2011, Congress passed legislation renewing GSP through July 31, 2013.

In July 2013, Sophia Foods contacted the New York Senators’ offices multiple times urging GSP renewal. It warned of the possible impacts of GSP expiration by citing its experience from 2011. It emphasized that recovering after 2011 was difficult and asked not to be put through the stress and uncertainty again.

By early September 2013, Sophia Foods had paid $3,700 in import taxes and expected another $7,000 before the end of the month because of GSP expiration. Candace wrote: “It’s hard to compete when you don’t know the actual final cost of the goods. We’re essentially playing ‘chicken’ either with our competitors or our year end profit – destabilizing situation for the whole market! We’ve suffered enough! Cut us a break already!

By early March 2014, Sophia Foods had laid off an employee. In response to a survey, Candace wrote: “We laid off one driver due to slowing sales directly related to the raising of prices on product brought at the higher rate. To compound the problem, we’re now sitting on slower moving inventory which is strangling our cash flow.

In July 2014, Sophia Foods joined in our Tariff Tuesdays campaign (owners Danny and Candace are the people in the cover photo) and repeatedly told staff for their congressional representatives about the impacts of GSP expiration on their business and the importance of renewing it.

By August 2014, Sophia Foods had laid off another employee and delayed a major investment, as noted above. History had officially repeated itself, as the company had to lay off two employees because of GSP expiration in the span of just three years.

It remains to be seen how or when Congress will act to renew GSP and what steps companies may be forced to take in the meantime. But it’s not too late for Congress to help importers that depend on GSP. In particular, Members looking to rack up some final “accomplishments” before the November elections should make sure a retroactive GSP renewal is on the agenda for September. Better late than never.

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Very Tough Times for GSP Importers

We continue to receive responses to our survey on the impacts of GSP expiration after 1 year. To be blunt, they are not pretty. Here are a couple responses we heard this morning:

  • One small business in Illinois laid off a worker yesterday. They have also delayed two hires, so instead of 12 employees they are operating with just 9.
  • Another small business in New York laid off 10 workers and has also delayed two hires (and a variety of capital investments). So instead of 27 employees, the have just 15.
  • Last but certainly not least, there is Golden Valley, Minnesota-based Vispak, which imports engineered plastic packaging material used in the food industry. According to owner Terry Wright: “We are currently in the process of shutting down the business due to this GSP tax making us non-competitive. We have a dozen independent contractors working with this product who will have to find replacement work.

All three of these companies sell to American manufacturers, meaning the higher costs associated with GSP expiration are harming others as well. As one of them noted: “I have marked my price up so the ball rolls down hill so everything they make is marked up and so on.”

You can see how GSP expiration is impacting other companies here, here, here, here, or here. If you have not done so already, please take a minute to answer the survey by next Friday, August 29. As always, all data will be kept confidential and no company-specific answers will be attributed without explicit permission.

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GSP Expiration Survey: Status Update

To date, we’ve had about 80 responses to our new expiration survey. That’s decent…but we need a whole lot more (especially since our last survey report had ~220 responses). So if you have not done so already, please take a minute to answer the survey.

The deadline to respond is next Friday, August 29, but no need to wait until the last minute: early responses give us more time to pull together info for the report and follow up with companies as necessary. They also provide great content for blog posts.

Again, you can answer the survey by clicking this link.

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Companies in 278 Congressional Districts Now Calling on Congress to Renew GSP

Yesterday, we added three new companies to the GSP supporter list: Aapico Forging in Stamford, Connecticut, Mutual Wheel Company in Moline, Illinois, and Alum-Tech Corp. in West Melbourne, Florida.

Aapico Forging was the 8th company company headquartered in Connecticut’s 4th District, while Mutual Wheel company was the 2nd company in Illinois’ 17th District, but Alum-Tech was the first company from Florida’s 8th District.

That makes 607 companies and associations – headquartered in 278 congressional districts – urging Congress to renew GSP. Put differently, 64% of all Representatives have at least 1 constituent company calling for GSP renewal.

As we’ve shown previously, the companies actively calling for GSP renewal are just the tip of the iceberg compared to the companies that likely would benefit. If you’re not yet on the supporter list, you can add your name for free here.

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GSP Expiration Impacts: Renewal Would Allow WA Company to Hire New Workers, Reward Existing Ones

TRInternational (TRI), based in Seattle, Washington, imports over 3 million pounds of eligible chemical products annually from Brazil, Thailand, and Turkey. These are raw materials that in turn are sold primarily to American manufacturers.

As we wrote previously, TRI has made the Puget Sound Business Journal’s “Top 100 Fastest Growing Private Businesses in Washington State” list on three separate occasions in the 20 years it has been in business. Yet the additional $100,000 in higher taxes because of GSP expiration has forced TRI to defer 1-2 new hires and scale back investments in IT infrastructure to “maintenance” levels.

What would TRI do if GSP is renewed retroactively? According to its response to our new survey launched last week, the company would:

  • accelerate capital projects that were previously deferred;
  • implement discretionary employee bonuses, and
  • make at least 1 new hire in inside sales to promote the GSP-eligible products.

You can see how GSP expiration is impacting other companies here and here and here and here. If you have not done so already, please take a minute to answer the survey by Friday, August 29 (so that we can publish a full report when Congress returns to DC on September 8). As always, all data will be kept confidential and no company-specific answers will be attributed without explicit permission (which TRI gave).

Posted in Brazil, GSP, Thailand, Turkey, Washington | Leave a comment