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 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

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.

The impacts of the India and Turkey decisions are clear, as shown in the graph below. Year-over-year GSP savings regularly were growing by $10+ million per month. In fact, June marked the first time since April 2016 (37 months) that year-over-year GSP savings declined. The $15 million year-over-year drop was the largest decline in GSP savings since the 2008-2009 financial crisis.

GSP savings from other countries continued to grow, increasing $12.5 million (23%) from June 2018 to June 2019. Savings on imports from Cambodia grew by $7.3 million, from Indonesia by $3.0 million, from Thailand by $1.6 million, and from Burma by $1.3 million.

But growth from other countries was not able to offset the loss of GSP ineligibility for India and Turkey throughout the country: 39 states plus DC and Puerto saw GSP savings decline from June 2018 to June 2018.

By value, the states with the largest year-over-year savings declines were New Jersey (-$4.1 million), Florida (-$3.6 million), Texas (-$2.0 million), New York (-$1.2 million), Illinois (-$1.1 million), Louisiana (-$1.0 million), Michigan (-$942,000), North Carolina (-$882,000), Georgia (-$716,000), and South Carolina (-$512,000).

By percent, the states with the largest year-over-year savings declines were Louisiana (-88%), Nebraska (-82%), Vermont (-76%), Wyoming (-71%), Minnesota (-71%), Mississippi (-68%), New Mexico (-65%), Iowa (-62%), Arkansas (-60%), and Idaho (-54%).

In many of these states, declines were wholly attributable to lost GSP for India and Turkey, leaving little chance that savings will bounce back in July.

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.

Some states such as Georgia and North Carolina saw much larger increases in GSP imports and savings compared to the previous year, as shown in the graphic below.

GSP saved Georgia companies $3.9 million in December, up $1.3 million (49 percent) compared to one year earlier. Metal products from Brazil, luggage from Thailand,  and chemicals from India contributed the most to Georgia’s GSP savings increases.

GSP saved North Carolina companies $2.0 million in December, up $577,000 (39 percent) compared to one year earlier. Chemicals from the Philippines, furniture fittings from Thailand, and wood products from Indonesia contributed most to North Carolina’s GSP increases.

In addition to Georgia and North Carolina, companies in 26 other states saw GSP savings increase by at least 20 percent, including: California, Connecticut, Florida, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, and Wyoming.

Savings on GSP imports from Indonesia increased by 31 percent compared to December of last year. California companies’ alone imported $4.6 million in silver jewelry under GSP in December. GSP eliminated about $1.5 million in import taxes on mangoes and guavas in December. About two-thirds of those savings were on imports into New Jersey.

*** 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.

GSP imports were up by 14 percent – and tariffs savings were up by 25 percent – compared to November 2016. Year-to-date savings from GSP are up $118 million, or nearly $11 million per month, over the first 11 months of 2016.

November was the first month that U.S. government data started reflecting imports under the recent travel goods expansion (though companies have been saving since July 1). GSP savings on travel goods jumped about $5 million from October to November and July-October savings likely will be revised up by similar amounts.

Some states such as Louisiana and New York saw much larger increases in GSP imports and savings compared to the previous year, as shown in the graphic below.

GSP saved Louisiana companies $1.0 million in November, up $529,000 (104 percent) compared to one year earlier. Ferrochromium from South Africa, zinc from India, and tropical plywood from Cambodia contributed the most to Louisiana’s GSP savings increases.

GSP saved New York companies $7.2 million in November, up $2.3 million (46 percent) compared to one year earlier. Chemicals from India and Brazil, jewelry from Indonesia, and eye-wear from Thailand contributed most to New York’s GSP increases.

In addition to Louisiana and New York, companies in 25 other states saw GSP savings increase by at least 20 percent, including: Alabama, California, Delaware, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, North Carolina, Ohio, Oklahoma, South Carolina, South Dakota, Wisconsin, and Wyoming.

Savings on GSP imports from Egypt increased by 30 percent compared to November of last year. Texas companies’ alone imported $836,000 in activated clays under GSP in November. GSP eliminated about $10 million (!) in import taxes on travel goods in November, the first month the data reflect the recent expansion. About one-third of those savings were on imports into New Jersey.

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

Please see our expiration post on what to do now to expedite any potential refund process and help renew GSP swiftly.

• total GSP imports, tariffs savings, and average tariffs waived on account of GSP in 2016;
• companies importing GSP-eligible products;
• top GSP imports by product type;
• top GSP source countries by tariff savings, and
• the extent to which recent GSP expiration periods prevented “real-time” user benefits.

GSP usage differs greatly between states, from the types of products they import to the dependence on suppliers in specific countries. For example:

• Colorado companies saved $4.5 million on imports of about $60 million, meaning average tariffs waived of about 7.5 percent. That was about twice the U.S. average and nearly triple the 2.6 percent average tariff waived in Louisiana.
• North Dakota‘s imports under GSP in 2016 were primarily food products (56 percent), whereas West Virginia‘s imports were auto parts (44 percent). In most states, a single product grouping accounted for at least a quarter of GSP imports.
• Iowa is among the most concentrated states in terms of source countries, with 94 percent of GSP savings on imports from just three countries (India, Brazil, and Thailand) in 2016. Florida is the least concentrated state, with less than half of GSP savings on imports from its top three source countries.
• Idaho importers have paid tariffs on GSP imports more often than not: nearly 60 percent of tariffs waived on imports into the state since 2011 came when GSP was expired, meaning companies paid up front and “hoped for the best” regarding refunds. Conversely, just 33 percent of New Hampshire‘s tariff savings came during expiration periods since 2011.

All reports are available for download, along with other state-specific info, on the state reports page. A sample of the Kentucky report is below.

Some states, such as Arizona and Minnesota, saw particularly large increases in GSP imports and savings compared to January 2016, as shown in the graphic below.

GSP saved Arizona companies $706,000 in January, up $215,000 (44 percent) compared to one year earlier. Semiprecious stones from Brazil and Madagascar, chemicals from India, and plastic statues and decorative items from the Philippines contributed most to Arizona’s GSP increases.

GSP saved Minnesota companies $413,000 in January, up $95,000 (30 percent) compared to one year earlier. Aluminum structures from Thailand, optical lenses from Indonesia and Thailand, and measuring instruments from the Philippines contributed most to Minnesota’s GSP increases.

The increase in GSP savings for American companies has been shared broadly. In addition to Arizona and Minnesota, companies in 16 other states saw GSP savings increase by at least 20 percent, including: Alabama, Alaska, Arkansas, Colorado, Connecticut, Idaho, Louisiana, Maine, New Hampshire, New York, North Dakota, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, Vermont, and Wisconsin.

Savings on GSP imports from Turkey increased by 23 percent compared to January last year. Georgia companies’ purchases of tires were among the top GSP imports from Turkey. GSP eliminated about $100,000 in import taxes on air bags and parts in January, with nearly all of those savings on imports from Thailand into Utah.

REMINDER: GSP EXPIRES AT THE END OF 2017. Click here to learn about ways to take action and support GSP renewal this year.