Discussions about trade often present a false dichotomy: if exports are good and then imports must be bad. This oversimplified view lends itself to policy prescriptions that encourage exporters and discourage importers. Yet the real world is much more complicated as demonstrated by the types of products imported under GSP.
The leading category of GSP imports, both by value ($6.1 billion) and savings ($256 million), was industrial materials that are used by American companies to produce other things in the United States. Combined with imports of capital goods (e.g., factory equipment) and automotive products – generally parts – nearly two-thirds of all imports under GSP were imports used to make other products in the United States.
GSP imports also demonstrate that U.S. tariffs are not always so low. Within the industrial materials category, the average tariff waived was 4.1 percent – well above the oft-cited average U.S. tariff of about 1.4 percent – and tariffs eliminated by GSP reached as high as 15 percent on titanium products. In consumer goods and food products, the top tariffs waived by GSP were much higher at 25-30 percent.
The graphic below breaks down 2016 GSP imports and tariff savings by their “end use” sectors and provides examples of some of the top states, countries, and products for each sector.