Contrary to popular belief, most products imported under GSP are not finished consumer goods – they are raw materials, components, and other industrial goods used by American manufacturers for domestic production. Ferroalloys, which are used to produce steel, have seen the biggest increase in “imports under GSP” in the beginning of 2011 (preferences claimed on Customs forms but tariffs still collected).
In the first two months of 2011, American companies imported $185 million worth of ferrochromium, ferrosilicon, ferrosilicon manganese, and other alloys. Imports were up $72.8 million from the same period in 2010, despite a decline in GSP shipments from South Africa, the top supplier country. Other countries picked up the slack – and then some: imports from Georgia increased by $38 million and those from Russia by $23 million. Imports from Kazakhstan, India, Turkey, Albania, and Brazil all increased by $3-10 million.
Of course, when GSP is expired, rising import values aren’t necessarily a good thing: steel producers paid more than $5.2 million in new tariffs in just two months.
If that wasn’t bad enough, considering that nearly 2 more months have passed, the actual cost could be approaching $10 million.
Unfortunately, we don’t have any ferroalloy importers in our GSP importer database, so we can’t say who exactly is paying these new costs. If you’re stuck paying higher prices and want to drop us a line, we’ll be happy to update the post.