GSP will expire in just a few weeks if Congress doesn’t pass legislation reauthorizing it beyond December 31. Failure to do so will lead to millions of dollars a day in new tariffs on American companies, hundreds of which sent a letter to Congress urging renewal last week. More important than the raw dollars are the impacts of those new costs: Americans will lose jobs; American will lose critical benefits like health insurance; companies will cancel the types of job-creating investments need to pull the economy out of recession in 2021.
Just one of thousands of products that qualify for GSP, at this time of year Christmas lights can illuminate how GSP benefits touch many aspects of everyday life that people don’t realize.
More than half of all U.S. imports of Christmas lights – about $234 million out of $450 million in 2020 so far – claimed GSP benefits. GSP has eliminated nearly $20 million in tariffs on Christmas lights alone. As the graph below shows, this is a new development.
Historically, nearly all Christmas lights came from China, which doesn’t qualify for GSP. In 2017, China accounted for about 90% of U.S. imports. But new tariffs on China – starting at 10% in fall 2018 and increasing to 25% in May 2019 – changed everything.
GSP countries have become the primary alternatives for companies that cannot or will not pay 33% (!) tariffs on Christmas lights from China. GSP countries accounted for more than half of all Christmas light imports in both 2019 and 2020, while China’s share has continued to fall.
The real beneficiaries are American families that want to decorate without paying exorbitant tariff-related costs. Whether you like all-white lights or multi-colored ones, indoor or outdoor or both, raising tariffs on Christmas lights from China and then raising tariffs on the new sources that them sounds pretty grinch-y.
If you import Christmas lights or any other product under GSP, be sure to use our Contact Congress page to tell them to renew GSP today.
