Welcome to Renew GSP Today

Thanks for visiting our website about the GSP trade program. Congress passed a retroactive GSP renewal on June 26, 2015 that extends the program through December 31, 2017 and refunds approximately $1.3 billion in taxes paid during the previous expiration.

Yet 2017 will be here soon, so we must continue to build support for the GSP program. If your company uses GSP, please get engaged by:

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Year-to-Date GSP Savings By State through July 2016

In the first seven months of 2016, GSP saved American companies about $410 million in eliminated tariffs. New Hampshire joined the list of states for which GSP eliminated at least $1 million in tariffs on imports, bringing the total to 37 states (plus Puerto Rico), and Hawaii is knocking on the door with an estimated $996,000 in waived tariffs.

The map below shows the overall GSP imports and savings by state from January to July.

gsp_savings_map_jan-jul2016

Companies in California continued to lead the way with $65 million in tax savings. Imports into New Jersey, Texas, and New York all faced $30-$35 million less in taxes because of GSP, while imports into Florida, Illinois, and Georgia all faced $20-$25 million less in taxes because of GSP. This map will be updated monthly as new trade data become available and the most up-to-date version will be available at all times on our Graphics page.

These posts highlight some of the individual states, products, and countries with the biggest increases in January, February, March, April, May, June, and July.

And if you’re one of the companies benefiting from GSP renewal, be sure to answer our renewal impact survey here. You can see examples from companies that already answered the survey here, here, here, and here.

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GSP Saved American Companies $58 Million in July 2016

In July, the GSP program saved American companies $58 million on about $1.5 billion in imports. GSP saved U.S. companies $410 million in the first seven months of 2016. In the one year since renewal, GSP saved American companies about $700 million.

Some states, such as Connecticut and New York, saw particularly large increases in GSP imports and savings compared to July 2015, as shown in the graphic below.

gsp_jul2016_snapshot

In Connecticut, GSP imports increased by about 70 percent and savings by about 50 percent compared to one year earlier. Ferroalloys from South Africa, aluminum building materials and rubber gloves from Thailand, and parts for steering wheels from India all contributed to Connecticut’s GSP increases.

In New York, GSP imports increased by 22 percent and savings from GSP by 44 percent compared to one year earlier. Jewelry from Turkey and Bolivia, stainless steel flanges from India, and PET resin from Pakistan contributed most to New York’s GSP increases.

Savings on GSP imports from Pakistan nearly doubled, led by increased imports of lamps in New Jersey. GSP eliminated about $250,000 in import taxes on fresh flowers from Ecuador in July, with more than $230,000 saved on imports into Florida alone.

If your company imports under GSP, be sure to answer our GSP renewal impacts survey here.

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Small Business Paid $250,000 in INTEREST on Bank Loans to Stay Afloat During GSP Expiration

Last week, we profiled two companies (Summit Specialty International in Georgia and Sophia Foods in New York) that have bounced bounced strongly since Congress renewed GSP. Despite difficulties faced during the GSP lapse, both have more workers – and provide expanded benefits for those workers – than when GSP expired in 2013.

(If you have not done so already, please answer the GSP renewal impacts survey here.)

Yet other companies, such as Novita in Monrovia, California, are still working to overcome the deep losses caused by GSP expiration. Novita imports jewelry from Indonesia that it sells to manufacturers, wholesalers, and retailers in the United States, Canada, Mexico, and South Africa.

While GSP was expired, Novita was forced to lay off 3 of its 17 workers. For the remaining 14, overtime was cut and salaries were reduced (or promised raises not given). Officers used personal loans and credit lines to loan the company funds so that it could continue paying bills. According to Vice President George Nazarian, Novita contemplated shutting down completely on account of GSP expiration.

Saying that GSP is crucial for Novita is a major understatement, but even a year after the retroactive renewal the company is not “whole” again:

  • the $2 million in tariffs paid during expiration were refunded, but the $250,000 in interest payments to banks to keep the lights on are gone forever;
  • the 14 remaining employees have received raised, but the 3 positions lost have not been refilled, and
  • sales of GSP-eligible goods have increased over the past year, but they cannot “undo” the lost sales over a 2-year period.

And that is the reality of GSP expiration: at best it is a speed bump that slows the growth of small businesses like Summit and Sophia Foods. The other end of the spectrum is much worse. Novita was able to avoid the worst of potential outcomes, but the lingering negative effects of GSP expiration show why it is so important for Congress to renew GSP well before its scheduled expiration at the end of 2017.

Novita provided the above information in response to our GSP renewal impacts survey. If you have not done so already, please take a minute to answer these questions today. As always, all data will be kept confidential and no company-specific answers will be attributed unless permission is explicitly granted. You can find another company responses here, here, and here and some preliminary survey response data here and here.

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It isn’t 1810

“It is an extremely arbitrary and outdated tariff. Our politicians need to realize we operate in a global economy now; it isn’t 1810.”

That comment was provided by Alex Livingston, President of Summit Specialty International in Alpharetta, Georgia, in response to our new GSP renewal impacts survey. The small business imports interior pine doors from Brazil that are used in new residential construction.

Like yesterday’s profile of Candace Abitbul from Sophia Foods, this is not the first time that Alex has provided information about the impacts of GSP on his company. Back in 2014, Alex reported that because of GSP expiration Summit could not “invest in either people or new equipment in a manner in which we would like,” while in early 2015 Alex reported that a retroactive GSP renewal would allow Summit “to hire another worker, give raises, and invest in additional inventory.”

GSP expiration cost Summit $198,218.03 in extra import taxes. Since GSP renewal, it has gone above and beyond previous predictions: Summit has hired two workers, gave its five employees raises, and started providing medical insurance.

These types of outcomes are possible when American companies can invest in their workers and operations instead of paying those “arbitrary and outdated tariffs.” As the scheduled GSP expiration approaches next year, importers must continue to remind Congress that they operate in the 21st – as opposed to the 19th – century economy.

Summit Specialty provided the above information in response to our GSP renewal impacts survey. If you have not done so already, please take a minute to answer these questions today. As always, all data will be kept confidential and no company-specific answers will be attributed unless permission is explicitly granted. You can find another company responses here and here and some preliminary survey response data here and here.

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GSP Renewal Allows New York Small Business to Refill Positions Lost During Expiration – and Then Some

Last week, we received a response to our new GSP renewal impacts survey from Candace Abitbul from Sophia Foods in Brooklyn, New York. Candace and her husband Danny, who own the small business together, have repeatedly shared their GSP story over the years (see below for a timeline from an August 2014 post).

gsp-expiration-survey-report-coverAs detailed in the 2014 GSP expiration impact survey report (right, featuring Candace and Danny on the cover), GSP expiration in 2013 forced Sophia Foods to lay off two employees (out of 7) and implement a hiring freeze. The company also put plans to purchase a warehouse and expand its space on hold until it was sure about the future of the business, which was so closely tied to GSP renewal.

So where do things stand now for Sophia Foods? Fortunately, it received refunds for tariffs paid during the expiration quickly (within 1-3 months). According to Candace:

Since GSP renewal, we refilled the two spots that were eliminated during expiration and added another position, and we are now able to offer more paid time off to our loyal, hardworking team. We have doubled our leased space, and are now confidently and actively searching for a warehouse of our own to purchase.

Thanks to the stability ensured by GSP renewal, our sales have increased, and we have very recently landed two major accounts which we hope will expand our business exponentially into the future.

So things are definitely looking up! But continued growth depends upon Congress renewing GSP before it is set to expire again at the end of next year. After all, Sophia Foods had to lay off two workers when GSP expired in 2011, then spent the next two years rebuilding the business before history repeated itself.

For small businesses, the uncertainly associated with GSP renewal/expiration can create paralysis. As Candace noted in this latest survey:

Stability is the key here. The living in limbo was the worst part of the GSP non-renewal period. We couldn’t move forward, but hesitated to move backward too much without knowing what might happen. It felt like a huge part of our cash flow was being held hostage, and making sound business decisions became increasingly impossible as time wore on.

This is a message that must be delivered to Members of Congress over and over and over again, right up until it renews GSP beyond December 31, 2017. But the Coalition can only provide them if importers share them with us first, as Candace has done here and you can do by answering the survey too.

Sophia Foods provided the above information in response to our GSP renewal impacts survey. If you have not done so already, please take a minute to answer these questions today. As always, all data will be kept confidential and no company-specific answers will be attributed unless permission is explicitly granted. You can find another company response here and some preliminary survey response data here and here.


The Sophia Foods timeline from an August 2014 post

In May 2011, Sophia Foods first contacted the Coalition for GSP to say that it had reached out to its representatives about the impacts GSP expiration was having on the business.

By June 2011, Sophia Foods had been forced to lay off 2 workers to stay afloat in light of plummeting profits associated with its GSP imports.

In October 2011, Congress passed legislation renewing GSP through July 31, 2013.

In July 2013, Sophia Foods contacted the New York Senators’ offices multiple times urging GSP renewal. It warned of the possible impacts of GSP expiration by citing its experience from 2011. It emphasized that recovering after 2011 was difficult and asked not to be put through the stress and uncertainty again.

By early September 2013, Sophia Foods had paid $3,700 in import taxes and expected another $7,000 before the end of the month because of GSP expiration. Candace wrote: “It’s hard to compete when you don’t know the actual final cost of the goods. We’re essentially playing ‘chicken’ either with our competitors or our year end profit – destabilizing situation for the whole market! We’ve suffered enough! Cut us a break already!

By early March 2014, Sophia Foods had laid off an employee. In response to a survey, Candace wrote: “We laid off one driver due to slowing sales directly related to the raising of prices on product brought at the higher rate. To compound the problem, we’re now sitting on slower moving inventory which is strangling our cash flow.

In July 2014, Sophia Foods joined in our Tariff Tuesdays campaign (owners Danny and Candace are the people in the cover photo) and repeatedly told staff for their congressional representatives about the impacts of GSP expiration on their business and the importance of renewing it.

By August 2014, Sophia Foods had laid off another employee and delayed a major investment, as noted above. History had officially repeated itself, as the company had to lay off two employees because of GSP expiration in the span of just three years.

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New Jersey Small Business Explains Impacts of GSP Expiration, Renewal

EVCO International is a small business in Manalapan, New Jersey that imports marble kitchenware and bath accessories from Indonesia and India and kettles from Thailand. When GSP expired and EVCO tried to raises prices, sales fell. Higher costs impacted both EVCO’s US sales and its exports from New Jersey to South America, Europe, Canada. As Evco President Les Koenig puts it:

“Despite our attention to design, color, and style, many retailers consider our products to fall under the commodity goods umbrella (very basic) and as such, will not pay increased costs. Margins are crucial to us, and lack of GSP really hurt.”

The company ended up paying about $90,000 in tariffs while GSP was expired. Like many others, Evco still waiting on some of those refunds a full year after GSP went back into effect. With GSP back in place, the company no longer has to absorb the tariff costs and can shift its focus back to where it belongs: design, color, and style.

EVCO provided the above information in response to our GSP renewal impacts survey. If you have not done so already, please take a minute to answer these questions today. As always, all data will be kept confidential and no company-specific answers will be attributed unless permission is explicitly granted.

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GSP Renewal Survey (Preliminary Results): 55% of Respondents Incorporate GSP Imports into Exports

On Friday, we published the first preliminary finding from our new GSP renewal survey: that nearly 1 in 4 companies was still waiting for refunds after one year.

Today, we want to highlight the responses to another question that had not been asked in the past, namely whether or not the products receiving duty-free benefits under GSP were later exported from the United States. Once again, the findings might surprise readers: more than half of respondents said their GSP imports are incorporated into U.S. exports.

GSP_Preliminary_Survey_Refund_Exporters.png

While past reports have focused on the positive domestic impacts of GSP on American businesses and workers, this is a very important finding from a trade policy perspective. In short, renewing GSP makes U.S. exports more competitive.

Among the respondents naming specific countries, the top destinations include Canada, Mexico, Japan, and the United Kingdom. Among those naming regions, the top destinations include Europe (or EU) and Central and South America.

The preliminary results are useful, but more responses are necessary to make compelling arguments about GSP promoting U.S. exports. If you haven’t answered already, please take a moment to answer the survey here.

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