Yesterday we wrote that GSP savings plummeted to $66 million in June. GSP savings fell by the most since the 2008-2009 financial crisis. But while external forces caused the last big drop, this one stemmed from the Administration’s choice to make American companies tariffs on previously duty-free imports from India (and Turkey). The price tag was steep: American companies paid $25 million in tariffs in June on GSP-eligible products from India.
Impacts were felt throughout the country, as shown by the map below. Companies in Texas alone paid over $3 million in extra taxes. Tariffs paid exceeded $1 million in eight states, but there can be big impacts on individual businesses even in states with relatively low tariffs paid.
Hardware Renaissance in Santa Fe, New Mexico reports paying over $1,000/week in new tariffs on hand-made bronze and iron door hardware. The 5-person company can’t pass on those costs, so tariffs mean lower margins and less money to reinvest in the business. Since India lost GSP in June, Hardware Renaissance has canceled both hiring and capital investments plans.
What might have been? In March, Hardware Renaissance reported plans for a major expansion that included new finishing and distribution in the United States and expanding exports to Mexico and South America. But that was based on new and planned product lines – all imported under GSP. “This is just so detrimental to business,” says Hardware Renaissance President Anagha Dandekar.
Our April report – How GSP Termination would Hurt American Businesses & Workers – profiled numerous companies like Hardware Renaissance that expected (then-potential) GSP termination to hurt their American jobs and investment plans.
