Based on data released last week, continued GSP expiration cost American importers another $58 million in September 2014. For a number of states – Alabama, Arkansas, Florida, Michigan, Nevada, and Ohio – September 2014 was the most costly month to date in terms of tariffs paid.
Since GSP expired on July 31, 2013, companies have paid an estimated $864 million in higher taxes. At $117 million through 14 months, California importers paid the most because of GSP expiration. Companies in New Jersey paid more than $70 million, while companies in Texas and New York paid between $50 million and $70 million. In total, companies in 41 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. Congress returns to DC tomorrow, but whether it will act on GSP remains in question.
So 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 in the lame duck. If you’re not one of the 620+ organizations already on the GSP supporter list, please add your name here.