Based on data released this week, continued GSP expiration cost American importers another $58 million in August 2014. For a number of states – Georgia, Kansas, Michigan, Missouri, New Hampshire, Wisconsin, and Wyoming – August 2014 was the most costly month to date in terms of tariffs paid. (Depressing that we now must use the month and year to report taxes paid because Congress’ failure to renew GSP.)
Since GSP expired on July 31, 2013, companies have paid an estimated $800 million in higher taxes. At $108 million through 13 months, California importers paid the most because of GSP expiration. Companies in New Jersey and Texas each paid more than $60 million during that period. In total, companies in 40 states plus Puerto Rico paid more than $1 million because GSP remained expired.
The results of GSP expiration are predictable: companies lose sales and workers lose jobs and benefits. A recent survey of 240 GSP importers showed that one in eight companies laid of workers because of GSP expiration. More than 40 percent delayed hiring new workers, and 22 percent reported benefits cuts such as reduced retirement or healthcare benefits, reduced or frozen salaries, or canceled bonuses.
If Congress can’t renew GSP in the lame duck session, the tax cost to importers will climb to over $1 billion. Unfortunately, the cost of GSP expiration continues to grow. Congress is out of session so (most) Members of Congress can go home and campaign. Congress returns to DC until mid-November, but its’ post-election agenda remains unclear. If GSP expiration drags into 2015, companies will pay hundreds of millions of dollars more in higher (and unnecessary) taxes, bringing the total cost of expiration to more than $1 billion.
So what can you do? If GSP expiration hurts your business, be sure to contact your Senators and Representatives about the need to pass a retroactive GSP renewal bill when Congress returns after the elections. If you’re not one of the 620+ organizations already on the GSP supporter list, please add your name here.