The China/Section 301 diversion is real. So far in 2021, GSP imports are up 12% for products where Chinese imports face Section 301 tariffs but down 7% for products where Chinese imports don’t face any new Section 301 tariffs. It is impossible to know how much more GSP imports might be up (or Chinese imports down) if GSP expiration hadn’t forced American companies to pay tariffs for those products too. We wrote about how GSP renewal must be a part of any “China trade” conversation here.

Imports into 38 states (plus Puerto Rico) paid at least $1 million in tariffs due to GSP expiration. The map below shows estimated tariffs paid for products claiming GSP by state.

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.

From January-August 2021, American companies paid at least $666 million in extra taxes as a result of GSP expiration. Imports into 36 states (plus Puerto Rico) paid at least $1 million in tariffs from January-July 2021 due to GSP expiration. The map below shows estimated tariffs paid for products claiming GSP by state.

August was the most expensive month of GSP expiration yet both nationally and for 15 states: Alabama, Delaware, Georgia, Hawaii, Idaho, Maryland, Minnesota, Montana, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Texas, and Washington. Tariffs paid on imports into Minnesota were 84% higher than any previous month. For Pennsylvania and Georgia, tariffs paid were 53% and 27% higher than any previous month, respectively.

GSP expiration costs have a direct, negative impact on American workers:

• “GSP can be the difference between making a profit or a loss and without profits we obviously can’t increase wages and benefits” says Charlie Smith of BROSCO, a 4th generation, family-owned millwork distributor in Massachusetts and Maine. “Continued losses put all of our 360 workers’ jobs and livelihoods at risk.”
  
• “We are having challenges staying competitive“ says Ajay Kochhar of A&S Distributors in Salida, California. The 7-worker company has paid over $60,000 in extra taxes on food products from Fiji because of GSP expiration. “We can’t hire and give employees full benefits as this is a major increase.”
  
• “The tariffs when added to the rapidly escalating costs of containers have been devastating” says Sandra Colyer of Lily Koo LLC in Jamestown, North Carolina. “Employees laid off due to Covid are slowly being brought back, but return to work would occur more quickly if money was not being spent on tariffs.”

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.

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

March was the most expensive month yet of GSP expiration: the $88 million in extra tariffs paid far exceeded the $65-$70 million paid in January and February. In the first three months of expiration, American companies paid at least $225 million in extra taxes as a result of GSP expiration.

Companies in 28 states paid at least $1 million in tariffs in the first quarter of 2021 due to GSP expiration. The map below shows estimated tariffs for products claiming GSP paid by state.

In Oregon, the March tariff costs exceeded January and February combined. It wasn’t just one product. March was the most expensive month yet for Oregon GSP importers of optical equipment and coconut flour from the Philippines, sweeteners and plywood from Indonesia, rubber gloves from Thailand, and wooden doors from Brazil. And it wasn’t just Oregon: companies in Delaware, South Dakota, Vermont, and Wyoming all paid more in March than in January and February combined.

As is so often the case, GSP expiration contributes to larger national issues such as surging lumber costs (WSJ: Lumber Prices Break New Records, Adding Heat to Home Prices, CNN: New homes cost $36,000 more because of an epic shortage of lumber). In the first quarter, the GSP tariff impact on plywood and veneers grew 118% from $4.8 million in 2020 to $10.5 million in 2021. (In 2020, these were savings, but in 2021 they must be paid due to expiration.) The tariff impact nearly tripled compared to 2019. Plywood and veneers ranked 6th in terms of GSP tariff impacts so far in 2021, up from 25th in 2019. It’s not just plywood and flooring-related products: GSP imports of wooden doors are up 40% in 2021 and builders joinery are up 96%.

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:

• 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
• answer our very short survey on GSP expiration impacts to date

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

Lost GSP for India and Turkey cost American companies as much as $33 million in extra tariffs in July, including up to $26.5 million in new taxes on imports from India and $6.5 million on imports from Turkey. The impacts of the decisions are clear, as shown in the graph below. Before June 2019, year-over-year GSP rose in 37 straight months.

GSP savings from other countries continued to grow, increasing $18.4 million (30%) from September 2018 to September 2019. Savings on imports from Cambodia grew by $10.9 million, from Indonesia by $4.1 million, from Burma by $2.1 million, and from the Philippines by $1.6 million.

By value, the states with the largest year-over-year savings declines were Florida (-$2.1 million), New Jersey (-$2.1 million), Texas (-$2.1 million), Pennsylvania (-$1.1 million), New York (-$984,000), Michigan (-$955,000), North Carolina (-$878,000), Louisiana (-$605,000), Iowa (-$545,000), and Massachusetts (-$490,000).

Savings for companies in Delaware declined over 90%, driven by lost GSP for India. Savings for companies in Maine declined by 84%, resulting from broader-based declines in imports from Brazil, India, Thailand, etc.

Fifteen states saw GSP savings increase in September. Among those, California (+$3.4 million) accounted for 60% of GSP savings increases.

The map below shows the overall value of 2018 GSP imports (in blue) and tax savings (in red) by state.

Increased GSP savings were both large and widespread:

• California saw savings increase by over $50 million (+36%), while New Jersey saw GSP savings jump by about $27 million (+42%).
• Maine‘s savings more than tripled – from about $500,000 in 2017 to nearly $1.6 million in 2018. Savings growth also was very high in Missouri (+59%), North Dakota (+54%), Kentucky (+34%), Delaware (+33%), and South Carolina (+30%).

However, recent decisions to terminate GSP eligibility for Turkey and India mean many of the American companies previously saving money due to GSP now face extra import taxes. Several dozen companies impacted by the decisions were profiled in the Coalition for GSP’s April report: How GSP Termination Would Hurt American Businesses & Workers.

Despite overwhelming congressional support for GSP renewal in 2018, the Trump administration has taken actions that will gut GSP benefits for many American companies. Last week, USTR announced its intent to terminate GSP benefits for India and Turkey.

[Given the risks to those countries and others – companies importing under GSP are strongly encouraged to add their name to our free GSP supporter list]

Imports from India and Turkey accounted for over $330 million of those tax savings for American companies in 2018 – and there could be more bad news to come. There are “pending reviews” for other major GSP suppliers such as Indonesia and Thailand that accounted for over $310 million in GSP savings last year. (Decisions could be announced at any time.) As such, less than 40% of GSP benefits came on products where there is no an immediate risk of losing GSP.

For many states, the situation is even more dire: India and Turkey combined to account for more than 60% of GSP savings for companies in Nebraska (77%), New Mexico (70%), North Dakota (64%), Missouri (64%), Iowa (63%), Delaware (63%), and Oklahoma (61%). House Members from those states voted 25-0 in support of the 2018 GSP renewal bill (2 were not present), but their reauthorization support could be undermined by the Admistration’s actions.

When you include countries under review, 43 states (!) had at least half of all GSP savings in 2018 come from countries at risk of losing GSP. In addition to states listed above, over 80% of GSP savings are at risk for companies in Maine (87%), Tennessee (85%), Mississippi (84%), Alaska (83%), and Minnesota (81%). Again, there was unanimous support among voting House Members from those states for the 2018 reauthorization bill.