On September 24, Senate Finance Committee Chairman Committee Chuck Grassley (R-IA) introduced S.4729, which would extend GSP’s authorization through April 30, 2022. Grassley refiled the bill on October 1 as S.4784, but it remains a 16-month extension without other changes.
The Grassley legislation is a welcome first step in trying to renew GSP before it expires on December 31. In comments to reporters ($), Grassley said the renewal bill “should be a very easy way to make sure that American businesses and manufacturers have certainty in … recovering from the economic slowdown we have now that’s caused by the pandemic.” Grassley said the 16-month extension gives “time for debate on any changes that members are interested in making.”
The importance of certainty for GSP importers cannot be understated: despite broad bipartisan support, Congress allowed GSP benefits to lapse for more than 30% of the 2010s. That includes 10 months in 2011, 24 months from 2013-2015, and 4 months in 2018. Tariffs paid were eventually refunded due to “retroactive” renewals, but the damage was done: companies lost sales, laid off workers, and canceled R&D and other job-creating expansions.
Covid-19 makes certainty provided by immediate GSP renewal even more important, as 250 companies and associations wrote to Congress this summer. Many companies that were experiencing very strong growth have taken a big hit from Covid, with no clear answer as to when demand might return. For these companies, GSP expiration would be “double trouble.”
American companies can use the GSP Coalition’s Contact Congress page to write their Representatives about the need to renew GSP. Other steps companies can take to support GSP renewal in 2020 include: