The Coalition for GSP has an open-ended survey asking companies how Covid-19 impacts their operations and GSP imports. Last night we received an interesting response from an importer of cast acrylic plastics. For those unfamiliar with plastic variations (like us), here is what they wrote:
Cell cast acrylic is the raw material used to create the barriers in almost every public space, where one person must interact with another, throughout the entire United States. Cell cast acrylic production in the United States is limited. Imposing duties on products that do not threaten U.S. manufacturing and in fact, create thousands of fabrication and installation jobs, would have resulted in high COVID barrier costs which would have siphoned funds from the purchase of all types of PPE’s during this pandemic.
Put differently: the materials for the plastic barriers now installed everywhere aren’t available from U.S. sources, and GSP helps keep costs low so money can be better spent on other protective measures.
The acrylics example is important for two reasons: 1) everyone has seen the new plastic barriers even if they don’t know what they’re made from, and 2) they would never be classified as a “medical product” in the traditional sense of “what’s needed to battle Covid-19?” For example, they are nowhere to be found in the USITC’s recent report COVID-19 Related Goods: U.S. Imports and Tariffs.
The trade data shows demand for cell cast acrylics has surged in recent months. Compared to 2019, GSP imports were up about 80% in May 2020, 130% in June, and nearly 200% in July. Non-GSP imports were flat in May, up 50% in June and up 100% in July – still strong but clearly showing the important role of GSP benefits in meeting this new demand.
Importers of similar products, such as rubber gloves, have reported similar expectations. One importer of non-medical gloves said current demand for rubber gloves is at least twice – and perhaps as much as nine times – global manufacturing capacity. While lost GSP won’t reduce demand, it could mean up to $10 million annually in extra taxes on rubber gloves alone.
Face masks from Thailand, which lost GSP in April, are the flip side of the coin. Lost GSP won’t reduce Covid-driven demand, but it will raise costs for Americans responding to the pandemic. Congressional failure to renew GSP would add acrylic barriers, rubber gloves, and many other to the list of Covid-related products made “more expensive than necessary” due to tariffs.
Given the strong bipartisan support for GSP (here, or more recently here), hopefully Congress will act soon to avoid this and many other painful tariff hikes for American companies, workers, and consumers.