• 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.

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.

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

The products facing the most new tariffs vary greatly by state:

• In Florida, roses faced more than $1.8 million in new tariffs due to GSP expiration in the run-up to Valentine’s Day.
• In New York, gold jewelry faced more than $1 million in new tariffs.
• In Louisiana, over $600,000 in tariffs were paid on steel-making materials (likely by a company around the Port of New Orleans for distribution throughout the country).
• In Massachusetts, over $200,000 in tariffs were paid on leather sports gloves.
• In Pennsylvania over $160,000 were paid for rubber gloves. They were also the top products for tariffs faced in Connecticut, Mississippi, and Minnesota. Notably, while GSP countries face new tariffs, identical products from China continue to receive a Section 301 tariff waiver for public health reasons.

The $70 million in tariffs paid is a conservative estimate, and the real figure likely is millions of dollars more. Why? Estimates only capture products that continued to claim GSP despite expiration. Yet for numerous products GSP claims fell dramatically while imports continued or even grew. For example, more than $11 million of road wheels from Thailand (88%) were imported in January that didn’t claim GSP. Just 0.4% of those same imports didn’t claim GSP in January 2020. Camshafts and gelatin from Brazil, guitars from Indonesia, and bicycles from Cambodia similarly saw large values of unclaimed GSP imports in January 2021 when nearly all such imports claimed GSP in January 2020.

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

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.

Lost GSP for India cost American companies an estimated $30.4 million in July, while lost GSP for Turkey cost them another $6.4 million. The impacts of the decisions are clear, as shown in the graph below. Before June, year-over-year GSP rose in 37 straight months.

GSP savings from other countries continued to grow, increasing $11.1 million (18%) from July 2018 to July 2019. Savings on imports from Cambodia grew by $8.1 million, from the Philippines by $2.7 million, and from Indonesia by $1.7 million

But growth from other countries was not able to offset the loss of GSP ineligibility for India and Turkey throughout the country: 41 states plus DC and Puerto Rico saw GSP savings decline from July 2018 to July 2019.

By value, the states with the largest year-over-year savings declines were New Jersey (-$3.4 million), New York (-$3.3 million), Florida (-$2.5 million), Texas (-$2.1 million), Michigan (-$1.3 million), South Carolina (-$1.1 million), Maryland (-$1.0 million), Kentucky (-$976,000), North Carolina (-$858,000), and Pennsylvania (-$852,000).

By percent, the states with the largest year-over-year savings declines were New Mexico (-87%), Louisiana (-78%), Vermont (-75%), Iowa (-72%), and West Virginia (-54%).

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.

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.

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 savings exceeded $1 million for 41 states plus Puerto Rico. Even without the expected upward revisions, more than 80% of U.S. states saw GSP savings grow over 2016. The map below shows the overall value of 2017 GSP imports (in blue) and tax savings (in red) by state.

Increased GSP savings were both large and widespread:

• New Jersey, Texas, and California each saw GSP savings jump by about $19 million, followed by a $17 million increase in Florida and a $11 million increase in New York.
• Savings more than doubled for Louisiana, Nebraska, and Delaware, while savings for Montana increased by 80% and savings for Alabama, Maine, and New Hampshire all increased by over 40%.

Some of these states (New Jersey, Nebraska, Florida, Maine, New Hampshire) are among the biggest beneficiaries of the travel goods expansion, meaning they also may see some of the largest upward savings revisions.

However, GSP expiration means American companies that have thrived in recent years are now being hit with millions of dollars in tariffs every day. Companies that import under GSP are strongly encouraged to join the GSP Supporter List and answer our survey on GSP expiration impacts.