On December 1, 284 American companies and associations sent a letter to Senate Majority Leader McConnell, Senate Democratic Leader Schumer, House Speaker Pelosi, and House Republican Leader McCarthy urging immediate passage of legislation extending the Generalized System of Preferences (GSP).
We know what happens when Congress lets GSP lapse: US companies will pay $2-3 million/day in new tariffs, US small businesses in particular will suffer, and American workers will lose jobs, benefits, etc – there are lots of examples from a past expiration documented here. Covid-19 makes a bad situation worse. Letting GSP expire would directly undermine congressional efforts to support struggling small businesses.
Companies are headquartered in over 40 states and operate in every state and congressional district. The vast majority are small businesses but signers also include some of the largest US companies. Association signers range from large U.S. business groups to those focused on sustainable trade and growth. GSP expiration would hurt both US businesses and development goals.
The letter recognizes that some Members of Congress want to see changes. Based on 40+ years of using GSP, many American companies do too. Yet with just 4 weeks until expiration – and likely 1-2 weeks with Congress in session – there is no time for thoughtful consideration given the lack of hearings, public proposals, or discussion of impacts on American GSP users to date.
GSP renewal has a long history of bipartisan support that should make a straight extension achievable:
- Senate Finance Committee Chairman Grassley has introduced legislation for a 16-month extension that, in his own words, gives “time for debate on any changes that members are interested in making.”
- The last House vote on GSP passed 400-2 in 2018, with strong statements of support from Ways and Means Republican and Democratic leaders.
- The last Senate vote on GSP passed 97-1 in 2015, again with strong statements of support from Finance Committee Republican and Democratic leaders.
To avoid harming American companies and workers, Congress must reauthorize GSP as-is and let the next Congress consider any potential changes. Hundreds of American companies that signed the letter – and many more that did not – are depending on it.