Tariffs paid by American companies due to expiration of the GSP program keep going up up up. Based on an analysis of new U.S. Census Bureau data, American companies paid at least $113 million in tariffs on products claiming GSP in June due to GSP expiration – and $1.7 billion in new tariffs from January 2021 and June 2022. The $656 million in tariffs paid in the first half of 2022 due to GSP expiration are a massive 39% increase over the same period in 2021.
The “real” cost of GSP expiration to date is likely over $2 billion. In addition to the $1.7 billion in tariffs paid that we know about, another $400 million in tariffs have been paid on products that may qualify for GSP but didn’t claim it. There easily could be another $100-$200 million in refundable tariff payments even after eliminating products that rightfully didn’t claim GSP (e.g., they don’t meet the rules of origin). Tack on another 35 days of payments for which the data aren’t available yet (July 1-August 4) and we’re probably in the $2.0-$2.1 billion range.
That’s right – over $2 billion in extra tariffs due to expiration of a program that no sitting House member voted against when it last came up for a vote in 2018. (It passed 400-2.) Billions of dollars in unnecessary tariffs is not how you bring down inflation.
The GSP Coalition launched a new survey on GSP expiration costs to date. If you’re a GSP importer, we’d greatly appreciate if you could complete the survey at this link.
June was the costliest month of GSP expiration yet for 7 states including Georgia, Washington, Virginia, Minnesota, Iowa, Maine, and New Mexico. Imports into 40 states (plus Puerto Rico) have faced at least $1 million in extra tariffs due to GSP expiration. The map below shows estimated tariffs paid for products claiming GSP by state.
These aren’t “unavoidable” costs – they stem from an explicit policy decision by Congress to let GSP remain expired, thereby making China more competitive, increasing inflationary pressures in the United States, and reducing GSP’s potential development impacts. Congress is leaving a lot on the table in terms of what GSP could accomplish.
