Yesterday we highlighted some of the early responses to our latest latest survey. With lots of trade action expected in Congress during the upcoming week, we need as many survey response ASAP.
So no one thinks we’re only interested in responses from companies willing to go on-the-record, here are several more incredibly detailed and helpful responses from companies provided on a strictly not-for-attribution basis.
A wholesaler of jewelry with 30 workers in New Jersey has paid about $2 million in import taxes since GSP expired. Sales are also down about 30 percent compared to when GSP was in place, forcing the company to freeze hiring and cancel expansion plans. The owner of the company estimates that refunded tariffs and lower costs going forward will allow it to hire 5-10 additional workers.
A small wholesaler of raw materials to U.S. manufacturers in New York has paid $154,000 in additional tariffs – despite losing an estimated $4.2 million in sales – because of GSP expiration. As a result, the company laid off 2 workers and cut salaries for the remaining workers by 30 percent. According to the owner, “Our cash flow has gotten so tight that we have lost our favorable bank financing terms…[and] paid over $38,000 in increased bank financing costs.” Those financing costs mean that a quarter of any GSP refund has already been spent. (We wrote about financing problems for other companies here.) Yet the proposed GSP renewal bill would allow the company to rehire one worker, return pay to previous levels, bring in about $3 million more in product annually, and hopefully get favorable financing terms from the bank once again.
A small business with 20 employees in California that imports from artisans in Thailand, Indonesia, Brazil, and India has paid about $175,000 in tariffs since GSP expired. According to the owner, “The number one enemy has been the uncertainty. Do we raise prices now? By how much? We’ve had to hedge against GSP never coming back, which has prevented us from being aggressive with pricing and hurt us as we compete on price with mass produced imports from countries such as China.” Knowing that tariffs are coming back and benefits would be guaranteed through December 2017 would allow the company to get more aggressive. The owner continued, “We’re needing to expand our operations team, and a refund of tariffs would be just the shot in the arm we need to do so.”
We need more of these examples to share with congressional staff (and publicly if allowed), so please answer our survey here if you haven’t done so already.