Most Americans have not heard of GSP. Most do not realize that they save money from it. As part of Imports Work week, we have shown everyday products from the home of the GSP Coalition’s Dan Anthony that benefit from GSP – from his Indonesian dinnerware to his dog’s Indian dinnerware to Thai picture frames to an assortment of food products. You can read the full posts here and here.
GSP benefits can be found all around us – if you’re willing to check out the “Made in” labels. Of course, the ongoing GSP expiration has raised costs for importing all of those everyday products. Between August 2013 and March 2015, GSP expiration increased import taxes on consumer goods by about $256 million. Add in food products and the total climbs to about $400 million.
A new addition to the family means lots of new tags to examine – many of them from GSP countries – such as those pictured below.
Left: Indonesian cotton shirt (19.7 percent import tax); Center: Indian Gerber Onesie, Indonesian plaid bodysuit (8.1 percent import tax each); Right: Cambodian crab tee shirt (14.9 percent import tax)
Unfortunately, while purchased from GSP countries, these products are excluded from GSP because of statutory exclusions for apparel. These exclusions are unlikely to change, as apparel is considered a sensitive product. And it is American families that pay the price, because clothes for very little people have very big (hidden) taxes baked into the price – up to almost 20 percent on the products shown above.
Over the same period that GSP-eligible everyday products faced $400 million in taxes because of expiration, taxes on (ineligible) baby clothes alone from GSP countries totaled another $128 million. The average tax was 11.1 percent. Other apparel products face similarly high tariffs. Even the baby is shocked (left) and disappointed (right) at the high taxes on clothes that he will outgrow after just a few wearings!
While GSP benefits for apparel may be a pipe dream, there is a glimmer of hope for American families and workers looking to save even more money from GSP. The legislation passed by the Senate Finance Committee that would renew GSP also includes provisions known as GSP UPDATE, which would open the door to GSP benefits for travel goods such as backpacks, luggage, and phone cases. The House version of the bill does not include the GSP UPDATE provisions, so it remains to be seen whether they are enacted into law.
Of course, all of these savings are hypothetical so long as GSP itself remains expired. Let’s hope Congress can act soon to renew GSP and expand its coverage. American families will benefits, even if they don’t take the time to read all the “Made In…” labels.
This post is part of the 4th Annual “Imports Work for America Week.“ For more information visit the Imports Work website.
