• Top 5 states by tariffs paid due to expiration: California ($287 million), Florida ($98 million), New York ($80 million), Texas ($80 million), Georgia ($61 million)
  
  
• Top 5 states by highest average tariff paid due to expiration: Colorado (12.1%), Maine (11.0%), Wisconsin (9.3%), Montana (9.1%), Utah (9.0%)
  
  
• Top 5 source countries by value of GSP imports: Indonesia ($3.9 billion), Thailand ($3.3 billion), Cambodia ($2.7 billion), Brazil ($2.5 billion), Philippines ($1.9 billion)
  
  
• Top 5 source countries by value of (eventual) tariff savings: Cambodia ($268 million), Indonesia ($218 million), Thailand ($139 million), Philippines ($121 million), Brazil ($94 million)
  
  

Import growth in 2021 was massive. Total U.S. goods imports grew by 21%, while those from GSP countries grew by 35%. Yet “competitive need limitations” (CNLs), which lead to GSP loss for specific products, only grew by 2.6%. As a result, $1.8 billion of the currently eligible imports exceeded the 2021 CNL and another $1.5 billion likely will exceed the 2022 cap based on import levels and trends, putting a huge share of future GSP benefits at risk:

• Top 5 states by share of benefits at risk for exceeding the 2021 CNL: Mississippi (42%), Louisiana (26%), Florida (20%), New York (15%), Virginia (13%)
  
  
• Top 5 states by share of benefits likely at risk from the 2022 CNL: Maine (37%), Colorado (27%), Iowa (27%), Hawaii (19%), Michigan (15%)
  
  

Representatives Stephanie Murphy (D-FL) and Jackie Walorski (R-IN) introduced the bipartisan CNL Update Act (H.R.6171), which would amend the CNLs to grow more in line with historical trends. Not only would the CNL Update Act help preserve GSP for much of that “at risk” trade, it would help restore GSP for some of the $10 billion (!!!) in imports that lost GSP in the past due to product reviews:

• Top 5 states by potential GSP savings increase for products that “should” be restored by H.R.6171: Alaska (84%), South Dakota (72%), Michigan (41%), Maryland (38%), Mississippi (42%)
  
  
• Top 5 states by potential GSP savings increase for products that “may” be restored by H.R.6171: South Dakota (4,565%), Wyoming (218%), Maryland (213%), New York (196%), Minnesota (166%)
  
  

While the CNL Update Act has a chance to “preserve and restore,” there remains considerable down-side risk. The GSP renewal language in the House’s America COMPETES Act not only maintains the current CNL thresholds, but creates a high likelihood of full or partial termination for key GSP supplier countries, particularly Brazil, Cambodia, Myanmar, Philippines, and Thailand. Loss of GSP due to current CNL rules, combined with loss for those countries, would decimate the program:

• States where at least 90% of current GSP benefits are at risk: Wisconsin (-97%), West Virginia (-96%), Montana (-92%), Utah (-91%)
  
  
• States where at least 80% of current GSP benefits are at risk: Colorado (-88%), Connecticut (-86%), Arkansas (-85%), Hawaii (-84%), Wyoming (-83%), Maine (-83%), Alaska (-82%), Kansas (-82%), Mississippi (-82%), Texas (-81%), Indiana (-81%)
  
  
• States where at least 70% of current GSP benefits are at risk: Nebraska (-79%), Georgia (-79%), North Carolina (-79%), Michigan (-79%), Washington (-78%), Rhode Island (-78%), Nevada (-78%), Illinois (-77%), Alabama (-76%), New Mexico (-76%), California (-76%), Minnesota (-75%), Tennessee (-75%), Virginia (-74%), Massachusetts (-74%), Oklahoma (-74%), Kentucky (-73%), South Dakota (-72%), Florida (-72%), Oregon (-71%)
  
  

This last set of stats shows that GSP “renewal” can’t be the only priority. It must be renewed in a way that doesn’t decimate the program in the next 2-3 years. After all, it’s impossible to “promote development through trade” with a program that covers no trade.

In the first six months of expiration, American companies paid at least $480 million in extra taxes as a result of GSP expiration. Companies in 34 states (plus Puerto Rico) paid at least $1 million in tariffs from January-June 2021 due to GSP expiration. The map below shows estimated tariffs for products claiming GSP paid by state in that period.

June was the most expensive month of GSP expiration yet for 12 states: Alabama, Colorado, Delaware, Iowa, Maine, Maryland, Minnesota, New Hampshire, Ohio, Oklahoma, Rhode Island, and South Carolina. For Alabama, Colorado, and Delaware, each new month has been the most expensive one yet (e.g., June was more than May, which was more than April, which was more than March…).

The data on tariffs paid is a conservative estimate, and the real figure likely is higher. Why? Estimates only capture products that continued to claim GSP despite expiration. Yet imports of many products that traditionally get GSP have not claimed it in 2021. Tariffs paid on those imports still would be eligible for refunds in the event of a retroactive renewal, but importers would need to file manual requests.

It is critical that Congress renew GSP – with refunds for tariffs paid – as soon as possible. We strongly encourage GSP importers hurt by expiration to answer our new survey here . As always, no company-specific details will be published without permission. Companies that want to help the Coalition for GSP educate policymakers on the importance of GSP should also join the Coalition for GSP and/or add their name to the free GSP supporter list.

In the first five months of expiration, American companies paid at least $397 million in extra taxes as a result of GSP expiration. Companies in 32 states paid at least $1 million in tariffs from January-May 2021 due to GSP expiration. The map below shows estimated tariffs for products claiming GSP paid by state in that period.

May was the most expensive month of GSP expiration yet both nationally and for 19 states: Alabama, Colorado, Delaware, Georgia, Hawaii, Illinois, Kansas, Massachusetts, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Pennsylvania, South Carolina, and Virginia. In three states – Colorado, Kansas, and New Mexico – tariffs paid in May were at least double any of the previous four months.

While many believe the United States has low tariffs, Colorado companies have paid extra tariffs averaging 11.7% due to GSP expiration. Companies in Maine, Montana, New Hampshire, Utah, and Wisconsin have all paid extra tariffs average 7-10%.

The data on tariffs paid is a conservative estimate, and the real figure likely is higher. Why? Estimates only capture products that continued to claim GSP despite expiration. Yet imports of many products that traditionally get GSP have not claimed it in 2021. Tariffs paid on those imports still would be eligible for refunds in the event of a retroactive renewal, but importers would need to file manual requests.

It is critical that Congress renew GSP – with refunds for tariffs paid – as soon as possible. Companies that want to help the Coalition for GSP educate policymakers on who is hurt by expiration (and how) should:

• join the Coalition for GSP
• add their name to the free GSP supporter list
• answer our very short survey on GSP expiration impacts to date

In the first four months of expiration, American companies paid at least $308 million in extra taxes as a result of GSP expiration. Companies in 31 states paid at least $1 million in tariffs from January-April 2021 due to GSP expiration. The map below shows estimated tariffs for products claiming GSP paid by state in that period.

April was the most expensive month of GSP expiration yet for 21 states – stretching from Florida to Alaska:

• GSP expiration costs have increased every month in Alabama, Colorado, Delaware, Idaho, Kansas, and Virginia.
• GSP expiration costs were about 4x higher in April than January in both Idaho and Delaware, and nearly 2x higher in Colorado and Alabama.
• The extra $2 million in tariffs paid in April by companies in Indiana is 40% higher than the average in the first three months of the year, while the $370,000 paid by companies in Nevada was 75% over the January to March average.

GSP expiration impacts are getting worse over time.

The data on tariffs paid is a conservative estimate, and the real figure likely is higher. Why? Estimates only capture products that continued to claim GSP despite expiration. Yet imports of many products that traditionally get GSP have not claimed it in 2021. Tariffs paid on those imports still would be eligible for refunds in the event of a retroactive renewal, but importers would need to file manual requests.

GSP expiration is already costing American jobs and raising prices for American companies that need inputs and consumers that purchase finished goods. It is critical that Congress renew GSP – with refunds for tariffs paid – as soon as possible. To help the Coalition for GSP educate policymakers on who is hurt by expiration (and how), companies are strongly encouraged to:

• join the Coalition for GSP
• add their name to the free GSP supporter list
• answer our very short survey on GSP expiration impacts to date

Burris Company, a manufacturer in Greeley, Colorado, has paid nearly $400,000 in tariffs due to GSP expiration. Vice President of Finance Mike Kinnison reports: “Burris Company manufactures as well as imports. The lower cost of imports helps to sustain our manufacturing and keep overall costs low. Additional tariffs puts US manufacturing at risk. Much more delay will result in canceling any large capital investments and lead to layoffs.”

Franklin Mfg Inc. in Jericho, New York has paid about $25,000 in tariffs due to GSP expiration. It raised prices to reflect tariffs, which led to lost sales and lower planned purchases going forward. As Franklin Mfg President and Owner Jesse Taube reports: “We are in a vulnerable position to lose our current customers due to not being as competitive.”

Fusion Gourmet, a food importer in Rancho Dominguez, California that has paid $25,000 in tariffs, similarly raised prices and lost sales. According to Fusion Gourmet President Steve Liaw, job impacts are felt by workers in both the United States and Indonesia, it’s primary GSP source country.

• In the United States: “Due to increased costs related to GSP, we are not able to increase our hiring for 2021. These additional costs directly impact our budget that we allocate towards seasonal hiring.”
• In Indonesia: “We will also reduce our orders from factories that are in countries impacted by GSP. This lost revenue will negatively impact these factories which are usually 70+% women workers.”

A Simpler Time, which is based in Morrisville, North Carolina and also operates a retail store in New Orleans, Louisiana, reports how GSP expiration directly hurt wages for its American workers. According to A Simpler Time President Jeff King: “Normally [we] pay quarterly bonuses to employees, but have delayed them as we can’t pass all the increased costs on to customers.” It also didn’t replace a worker that left and reduced another’s hours due to a combination of higher import costs, supply chain issues, and retail sales that remain well below pre-Covid levels.

If you’re a company impacted by GSP expiration, please answer our very short survey on GSP expiration impacts to date (the source for all of the above examples). To further help the Coalition for GSP educate policymakers on who is hurt by expiration (and how), companies are strongly encouraged to:

• write their lawmakers about GSP renewal with our Contact Congress tool
• join the Coalition for GSP
• add their name to the free GSP supporter list

California accounts for more than a quarter of GSP savings, more than the next 3 states – New York, Florida, Texas – combined. Georgia, New Jersey, Ohio, Illinois, Washington, and Pennsylvania round out the top 10 states for GSP savings in 2020.

Estimated GSP savings for Colorado grew from $4 million in 2019 to $14 million in 2020, by far the largest increase. Estimated GSP savings also grew in Wisconsin (+$869,000), Arkansas (+$478,000), Washington (+$300,000), Delaware (+$73,000), and Wyoming (+$34,000). Estimated savings fell in all other states.

While Covid-19 had big impacts on GSP imports in the spring, declines were largely due to country suspensions. Excluding products impacted by country suspensions (e.g., India, Turkey, Thailand), most states’ GSP savings grew. For example, New York’s GSP savings grew by $15 million on non-impacted products but fell by $2.5 million overall due to country suspensions. Similarly, Texas’ savings GSP by $9 million on non-impacted products but fell by over $7 million overall.

Since GSP expired on December 31, American likely have paid about $110 million in tariffs that previously would’ve been “GSP savings.” It is critical that Congress renew GSP – with refunds for tariffs paid – as soon as possible. To help the Coalition for GSP educate policymakers on who is hurt by expiration (and how), companies are strongly encouraged to:

• join the Coalition for GSP
• add their name to the free GSP supporter list
• answer our very short survey on GSP expiration impacts to date

The top states by GSP savings have been fairly consistent over the years. California accounts for more than a quarter of GSP savings – about as much as the next 4 states (Florida, New York, Texas, New Jersey) combined. Washington and Tennessee have moved into the top 10 states in 2020, replacing Pennsylvania and North Carolina.

Savings are down sharply, from $555 million in 2019 to $407 million in 2020. The map below shows the widespread declines, with the Mountain West being a notable exception. Washington, Idaho, Wyoming, Utah, Colorado, and Arizona form a string of growth states from the Canadian to Mexican borders. Colorado’s savings increased over 150% from 2019, largely driven by a jump in backpack imports. Massachusetts is the only other state where GSP savings are up in the first half of 2020.

Savings declined by over 40% in more than 20 states, including a whopping 78% in Vermont. GSP savings also declined by 67% in Montana and Oklahoma, 63% in North Dakota, 61% in Michigan, 60% in Minnesota, and 52% in West Virginia.

Declines are NOT due to Covid-19. American companies have paid up to $183 million in extra tariffs in 2020 due to GSP suspensions for India, Turkey, and Thailand. In the first half of 2019, tariffs paid due to suspensions (India and Turkey only) were about $35 million. Add those potential savings to actual savings in both years, and the first half totals were nearly identical ($590 million) in spite of Covid-19-related declines. Our next post will dig into state-by-state costs in 2020 associated with the suspensions.

In the first two months of 2018, companies paid $145 million. That includes only products that claimed GSP despite the expiration. Companies have until September 19 to claim refunds manually, so actual refunds paid for January-February likely will be higher than $145 million.

GSP imports were up by 8 percent compared to February 2017. Had companies not been forced to pay them, tariff savings would have increased by 17 percent. Arizona and Utah were among the states with the biggest increases in tariffs paid because of expiration, as shown in the graphic below.

GSP expiration cost Arizona companies $422,000 in February. Potential savings were up $238,000 (130 percent) compared to one year earlier. Chemicals from India, fashion accessories and conveyor belts from Thailand, and tires from Indonesia contributed most to the increases.

GSP expiration cost Utah companies $313,000 in February. Potential savings were up $120,000 (62 percent) compared to one year earlier. Bicycles from Cambodia and travel goods and compressor pumps from the Philippines contributed most to the increases.

In addition to Arizona and Utah, companies in 20 other statessaw potential GSP savings increase by at least 20 percent, including: Alaska, California, Colorado, Florida, Georgia, Idaho, Indiana, Kansas, Maine, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, Oregon, South Dakota, Washington, and Wyoming.

Potential savings on GSP imports from Ukraine increased by 195 percent compared to February of last year. Chocolate products into Pennsylvania accounted for nearly a third of imports from Ukraine. Companies paid about $1.1 million in tariffs on plywood, led by importers in Florida.

*** REMINDER: GSP GOES BACK INTO EFFECT APRIL 22 BUT PRODUCT- AND COUNTRY-SPECIFIC BENEFITS MAY BE AT RISK AS PART OF ADMINISTRATIVE REVIEW PROCESS.***

While GSP has been renewed through 2020, we encourage GSP program users to sign up for the free GSP Supporter List to receive periodic updates on such issues such as refunds and the Annual Review process.

By comparison, the most tariffs paid in a single month during the last 2-year expiration was “just” $61 million. So the stakes for a swift, retroactive renewal are much, much higher for American companies this time around.

GSP imports were up by 18 percent compared to January 2017. Had companies not been forced to pay them, tariff savings would have increased by 21 percent. Montana and South Carolina were among the states with big increases in GSP imports getting slapped with new tariffs, as shown in the graphic below.

GSP expiration cost Montana companies $46,000 in January. Potential savings were up $38,000 (514 percent) compared to one year earlier. Travel goods from Philippines and fishing lures from Cambodia contributed most to the increases. As noted recently, Montana Fly Company in Colombia Falls had to lay off 3 workers due to higher tariffs associated with GSP expiration.

GSP expiration cost South Carolina companies $1.8 million in January. Potential savings were up $607,000 (49 percent) compared to one year earlier. Plastic resins from South Africa, motorcycles from Thailand, and plaited goods (baskets, wickerwork) from India contributed most to the increases.

In addition to Georgia and North Carolina, companies in 19 other states (plus DC and Puerto Rico) saw potential GSP savings increase by at least 20 percent, including: Alaska, Colorado, Delaware, Florida, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Missouri, Nebraska, Nevada, New Jersey, New Mexico, Texas, Vermont, Virginia, and Wyoming.

Potential savings on GSP imports from Tunisia increased by 115 percent compared to January of last year. Maryland companies alone imported $3.4 million in olive oil claiming GSP in January. GSP would’ve eliminated about $1.2 million in import taxes on monumental and building stone in January had it been in place. Illinois was among the largest importing states.

*** REMINDER: GSP EXPIRED EFFECTIVE JANUARY 1.***

The House passed GSP renewal legislation in February, but the Senate must pass legislation for GSP benefits to resume. Please use our Contact Congress tool to write your Senators about GSP renewal; answer our brief survey on how GSP expiration impacts you, and/or sign up for the free GSP supporter list to show the broad support for renewal.

• Employ anywhere from 1 to 30,000 US employees. Small businesses dominate, with about 2/3 of companies reporting 12 or fewer workers.
• Saved anywhere from $5,000 to $3 million because of GSP in 2017, and bigger company ≠ bigger savings. The top “saver” was an SME; while 3 of the top 6  were among those with 12 or fewer workers.
• Are headquartered in 17 states and 39 different congressional districts. New supporters come from Massachusetts and Florida and Southern California and Washington State – and everywhere in between.

Here are some of the companies that granted permission to share the details of their GSP use:

• Lawrence & Co. in New Bedford, Massachusetts has 3 employees. GSP saved it $6,000 in 2017 on imports of mica products and leather goods from India.
• RV Industries in Buford, Georgia has 30 employees and saved $200,000 in 2017 on imports of coconut products from Thailand and the Philippines. RV Industries also exports to both Canada and Mexico.
• Miami Chemical in Miami, Florida is among the small business with big GSP savings. GSP saved the 12-person company about $1 million on imports of chemicals from India, Thailand, and Turkey.
• Pioneer Square Brands‘ 110 employees makes it among the larger new supporter list companies. The Seattle, Washington-based company saved $250,000 on imports of educational accessories from Cambodia.
• Colorado Angler Supply in Aurora, Colorado has 6 employees and saved $5,000 in 2017 on imports of fishing tools and accessories from India. It also exports to Canada and South America.

It’s not just new companies: the International Bottled Water Association and the Society of American Florists both joined the supporter list this month as well.

In short, GSP supporters are as diverse as the products they import. It might be hard to find something that ties these 7 organizations together beyond their support for GSP renewal, which may help explain bipartisan support in Congress too.

But it’s hard to pass any legislation these days, so we’re always looking for new examples of how GSP benefits companies and workers throughout the United States. If your organization benefits from GSP and is not yet on the free supporter list, please take a moment to add it here. We also have an open-ended survey where companies can share specific impacts of GSP expiration here.