Brian Miles from chemical distributor I. Stern & Co. in Clark, New Jersey doesn’t believe it can “sustain all of our salespeople if we are put into an uncompetitive price situation caused by the additional duty costs for our raw materials.”
Thomas Snyder of Warehouse Associates in Indianapolis, Indiana, which supplies components to large American equipment manufacturers, expects speculative investments to decline and possible benefits changes for warehouse workers if GSP remains expired. He added: “Where to find $600k? Major customers are not accepting the pass-through asking us to find savings elsewhere.”
Another company (that asked not to be named) said it will reduce the profit margin by 5-10% on impacted products and still expects sales to decline by 5% because some price increases will be necessary. Lower margins and lower sales is not a recipe for growth: the small business may cancel plans to add 3,000 square feet to its facility and 2-3 more employees this year if GSP is not renewed in early 2018.
Those companies are just three of the nearly 400 American companies and associations that sent a letter yesterday to Congressional leaders urging swift, retroactive renewal of the GSP program.
GSP expired on December 31 and companies must now pay $2-3 million per day in extra taxes while awaiting a potential congressional reauthorization. The last time GSP expired, Congress did not renew it for nearly 2 years and companies paid about $1.3 billion in tariffs.
Despite broad, bipartisan support in both the House and Senate, GSP renewal did not get a vote in 2017. Earlier this week, a White House official reportedly said the Trump Administration supports a three-year GSP extension and would like to see Congress act “this this year.”
Companies and associations that wish to be included on future letters (or stay informed of similar initiatives) should add their name to the free GSP supporter list here. Companies can also use our contact Congress tool to email your Representatives and Senators about the need to renew GSP.