Tariffs are just another kind of tax. As many Americans scramble to finish up their taxes – and learn whether they’re due a refund (or something less pleasant) – there is another group of Americans for which May 4 may be a more important deadline: small businesses importing under GSP. These companies need an extension.
That is because May 4 is the earliest that the Trump administration could revoke GSP eligibility for India and Turkey based on an earlier announcement. The result would be $330 million in new taxes on American companies annually. More taxes could be following if the Administration makes similar decisions on other countries “under review,” as shown below.
The looming tax hikes are why over 430 companies and associations wrote to Congress asking for help stopping these tax hikes. Senators John Cornyn (R-TX) and Mark Warner (D-VA) wrote a letter to U.S. Trade Representative Robert Lighthizer last week asking for a delay for India. A group of associations wrote a similar letter, including the U.S. Chamber of Commerce, the American Apparel & Footwear Association, the National Retail Federation, the Retail Industry Leaders Association, the National Association of Chemical Distributors, and others.
Usually higher taxes for one group means lower taxes for another, but this is the rare case where no one benefits. American importers will pay more, American exporters won’t get potential negotiated tariff cuts – and may now be more likely to be subject to retaliation for other measures.
It is a lose-lose-lose situation, but one that could be avoided if President Trump decides not to move ahead on May 4. There is nothing preventing delay, in fact the last time GSP benefits were suspended it did not occur after 60 or even 90 days. The Trump administration waited 120 days to provide additional time to avoid extra taxes being imposed.
Like many Americans, small businesses using GSP need a #TaxDay extension.