It’s not an insignificant cost: Ecuadorian roses faced up to $18 million in tariffs in 2021 due to GSP expiration. Like many products, imports rose throughout the year, so tariff costs for this Valentine’s Day likely will be much higher than last year. This has a big impact on the overall market since tariffs without GSP are 6.8% and Ecuador accounts for about 35% of total U.S. imports of roses. Put differently, GSP lapse has the same effect as adding 2.5% to the cost of all imports…and there aren’t too many U.S.-grown roses available in February.

But it could get worse still for Valentine’s Days-to-come: rising imports mean Ecuadorian roses surpassed GSP’s “competitive need limitation” (CNL) in 2021. If Congress renews GSP without updating its CNL rules – and there’s a bill that would do just that – permanent 6.8% tariffs could be applied to Ecuadorian roses on November 1.

Roses are far from alone in potential negative impacts from CNLs: nearly 20% of all GSP imports either exceeded the 2021 CNL cap or should exceed the 2022 cap based on import levels and trends. That’s because imports from GSP countries grew 35% in 2021 (versus 21% from all countries), and inflation was 7.5%, yet the CNL threshold grew by just 2.6%. Already, as much as 35% of potential GSP imports face tariffs due to these product-specific exclusions, further showing the need to update the rules as part of GSP renewal.

No one likes to pay more than necessary for beautiful roses. Congress can help spread the love by renewing GSP and updating the CNL rules as soon as possible.

In a major shift from 2018, consumer goods were the largest category of GSP imports by both value ($6.6 billion) and savings ($512 million). Consumers goods accounted for 32% of total GSP imports, up from 24% the prior year. Because average tariffs (without GSP) are much higher (7.7%), consumer goods accounted for about half of all GSP savings. Expanding GSP to cover travel goods in 2016/2017 has led to steadily increasing consumer goods imports over the last several year.

Industrial materials ranked second among GSP products both by import value ($6.0 billion) and estimated tariff savings ($256 million). Industrial materials were the largest GSP imports, usually by a wide margin, in each of the last 10 years. The reason industrial materials slipped to #2 is clear from the “top countries”: 5 months of GSP for India eliminated more tariffs on materials used by American manufacturers than full-year GSP for any other country.

Agricultural and food products ranked third among GSP products by import value ($2.9 billion) and estimated tariff savings ($116 million). Among the more surprising data points: Ecuador was the second-largest source of food and agricultural products in 2019 by the value of GSP savings, primarily on tropical plants such as taro, mangoes, and guavas.

Capital goods ranked fourth among GSP imports by value ($2.8 billion) and savings ($83 million) in 2019. Despite similar import values, GSP savings on capital goods were much lower than GSP savings on agricultural and food products due to lower average tariff rates (3.0% versus 4.0%, respectively). India was the second-biggest source country in terms of tariff saving on capital goods, again demonstrating how American manufacturers are bearing the brunt of the decision to end GSP for India.

Autos and parts ranked fifth among GSP imports by value ($2.3 billion) and savings ($66 million) in 2019. Passenger vehicles are not eligible for GSP, so imports tend to be concentrated among parts such as engines, tires, and wire harnesses. Not surprisingly, states with a heavy automotive presence such as Michigan and Tennessee are among the top importers by GSP savings on these components and parts.

The large increases come despite the fact that July, August, and September savings appear significantly understated: official U.S. government data show no claimed GSP benefits for imports of travel goods from countries such as Thailand and the Philippines in July or August despite a recent program expansion. So not only is GSP program usage is booming, it’s likely that data on savings will be revised up considerably in the near future.

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

GSP saved Oklahoma companies $316,000 in September, up $126,000 (67 percent) compared to one year earlier. Taps and cocks and artificial plants from India, rubber hoses from Turkey, and ceramic wares from Indonesia contributed most to Oklahoma’s GSP savings increases.

GSP saved Florida companies $4.8 million in September, up $1.3 million (36 percent) compared to one year earlier. Tropical plywood from Ecuador, travel goods from Burma and Cambodia, and motor boats from South Africa contributed most to Florida’s GSP increases.

In addition to Oklahoma and Florida, companies in 21 other states saw GSP savings increase by at least 20 percent, including: Alabama, Alaska, Arkansas, Delaware, Iowa, Louisiana, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, South Dakota, Texas, Virginia, West Virginia, and Wyoming.

Savings on GSP imports from Pakistan increased by 52 percent compared to September of last year. New York companies’ purchases of jewelry alone resulted in $179,000 in GSP savings. GSP eliminated about $500,000 in import taxes on valves in September, with about half of those savings coming from imports into Texas.

*** REMINDER: GSP EXPIRES IN JUST A FEW MONTHS.***

Please use our Contact Congress page to write your Members today about the need to renew GSP today. That page makes it quick and easy to email both Senators and your Representative. All you need to do is: 1) enter your contact info, 2) enter a few sentences about your company/GSP imports, and 3) click send.

Despite the slight overall decline, some states such as West Virginia and Nevada saw very large increases in GSP imports and savings compared to February 2016, as shown in the graphic below.

GSP saved West Virginia companies $91,000 in February, up $36,000 (65 percent) compared to one year earlier. Chemicals and mining tools from India and electrical conductors from Ecuador contributed most to West Virginia’s GSP increases.

GSP saved Nevada companies $330,000 in February, up $128,000 (63 percent) compared to one year earlier. Plastics accessories (e.g., wallets, glasses cases) from India, flourides (chemicals) from Thailand, and tungsten concentrates from Bolivia contributed most to Nevada’s GSP increases.

In addition to West Virginia and Nevada, companies in 10 other states saw GSP savings increase by at least 20 percent, including: Colorado, Connecticut, Delaware, Florida, Michigan, New Hampshire, New Mexico, Rhode Island, Virginia, and Wisconsin.

Savings on GSP imports from Kenya increased by 153 percent compared to February last year. New Jersey companies’ purchases of nuts were among the top GSP imports from Kenya. GSP eliminated about $265,000 in import taxes on gelatin in February, with about of those savings on imports from Iowa.

More monthly GSP import and savings highlights are on our Graphics page.

REMINDER: GSP expires at the end of 2017. Click here to learn about ways to take action and support GSP renewal this year.

Overall, GSP saved U.S. companies $667 million in 2016 through November. GSP savings are up about $58 million, or 10 percent compared to the first 11 months of 2015.

Some states, such as Oregon and Indiana, saw particularly large increases in GSP imports and savings compared to November 2015, as shown in the graphic below.

In Oregon, GSP imports and savings each increased by about 50 percent compared to one year earlier. Wooden doors from Brazil, Indonesia, and South Africa; lighting fixtures from Thailand, and food products from Ecuador all contributed to Oregon’s GSP increases.

In Indiana, GSP imports and savings each increased by about 35 percent compared to one year earlier. Motor vehicles parts and polycarbonates from Thailand and engine parts and electric motors from the Philippines contributed to Indiana’s GSP increases.

Savings on GSP imports from Paraguay increased by 148 percent compared to November last year. Increased imports of sugar contributed most to this increase. GSP eliminated about $237,000 in import taxes on ceramic mugs in November, with more about $47,000 saved on imports into Florida alone.

REMINDER FOR ALL GSP PROGRAM USERS: GSP EXPIRES AT THE END OF 2017.

Please click that link to learn about how to get involved in the Coalition for GSP’s renewal activities this year.

Overall, the value of GSP imports increased by 9 percent and the value of GSP tariff savings increased by 14 percent compared to June 2015. Some states, such as Florida and Kansas, saw much larger increases in GSP imports and savings compared to June 2015, as shown in the graphic below.

In Florida, GSP imports and savings both increased by about 50 percent compared to one year earlier. Ferroalloys from Georgia, jewelry from Bolivia, and plywood from Ecuador all contributed to Florida’s GSP increases.

In Kansas, GSP imports increased by 28 percent and savings from GSP by 53 percent compared to one year earlier. Pesticides from India, ceramic sanitary fixtures (sinks, tubs, toilets, etc.) from Thailand, and building stone from Brazil contributed most to Kansas’ GSP increases.

Imports from the Ukraine nearly doubled, led by increased imports of rare gases by companies in South Carolina. GSP eliminated about $560,000 in import taxes on truck tires in June, with more than $200,000 saved on imports into New Jersey alone.

If your company imports under GSP, be sure to answer our GSP renewal impacts survey here.

So we decided to conduct an experiment: we downloaded all of the Panjiva import records from GSP beneficiary countries for the most recent day available (Thursday, July 17) and examined each shipment to see if the company (likely) paid unnecessary taxes because Congress has failed to renew the program.

We found nearly 100 companies that likely paid taxes on that one day (full list after the jump) based in 24 states. The vast majority of them are not on the GSP supporter list – including some pretty BIG companies – meaning the constituent impacts are much greater than we have been able to highlight. At least they’re not on the list yet…we hope anyone that sees their company below will add it here.

Even this list significantly understates the actual number of companies that likely paid higher taxes last Thursday. That’s because we were conservative in identifying “likely GSP shipments.” For example, we skipped over all records that named a shipping company as the importer of record as well as records with vague product descriptions such as “granite” or “foodstuffs.” These are both major GSP imports, but GSP-eligibility depends on the type of granite and foodstuffs. Finally, there were about 4 times as many shipment records for July 16 as for July 17…would we have found 4 times as many companies had we chosen one day earlier? (We’d still be reviewing them, but may undertake that effort at a later date!)

So while far from perfect, here is the partial list of companies that likely got stuck paying higher taxes on July 17:

GSP supporter list companies importing GSP-eligible products (22):

• Acme Food Sales (Seattle, WA) – coconut water from Thailand
• Bridgestone Americas (Nashville, TN) – tires from Indonesia
• Camerican International (Paramus, NJ) – food products from Thailand
• Cummins Inc. (Columbus, IN) – engine parts from India
• Eastland Food Corporation (Jessup, MD) – food products from Thailand
• Eucatex of North America (Alpharetta, GA) – fiberboard from Brazil
• Felt Racing LLC (Irvine, CA) – bicycles from Cambodia
• Fusion Gourmet (Gardena, CA) – candy from Indonesia
• Handy International (Salisbury, MD) – seafood products from Thailand
• Henry W. Peabody & Co. (Lynnfield, MA) – polypropylene products from Indonesia
• International Packaging Films (Norwood, NJ) – polyester films from India
• Jaunty Co. (Los Angeles, CA) – hand-tufted carpets from India
• Kas Oriental Rugs (Somerset, NJ) – hand-tufted carpets from India
• Loloi Inc. (Dallas, TX) – hand-tufted carpets from India
• LR Resources (Dalton, GA) – hand-tufted carpets from India
• M.S. International (Batavia, CA) – stone products from Brazil and Turkey
• Primetac (Little Ferry, NJ) – adhesive tape from Indonesia
• Sumitomo Electric Wiring Systems (Edmonton, KY) – copper wire from Indonesia
• Universal Arquati (Santa Clarita, CA) – wooden picture-frame moulding from Indonesia
• Via Motif (Miami, FL) – handicrafts from Indonesia
• Yaraghi LLC (Port Washington, NY) – hand-tufted carpets from India
• Zebra Pen Corp. (Edison, NJ) – ballpoint pens from India

Other GSP supporter list companies (product descriptions too vague to determine GSP eligibility (9):

• General Electric (Fairfield, CT)
• Michelin North America (Greenville, SC)
• Napa Rayloc (Atlanta, GA)
• Omicron Supply (Pompano Beach, FL)
• Pantai USA (Doral, FL)
• S&V Industries (Fairlawn, OH)
• Tumac Lumber (Portland, OR)
• Universal Forest Products (Union City, GA)
• Venture Lighting (Solon, OH)

Non-supporter companies importing GSP-eligible products (60):

• Abaline Supply Co. (Port Reading, NJ) – plastic cups from India
• ABB Power (Jefferson City, MO) – parts for electrical transformers from India
• Acme Mfg. Co. (Denver, CO) – aluminum alloy extruded products from India
• AKG Thermal Systems (Mebane, NC) – oil coolers from India
• Amber International (West Orange, NJ) – plastic tubes with caps from Thailand
• American Honda Motor Company Parts Center (Chino, CA) – auto parts from Thailand
• Arrowpak Inc. (Richmond Hill, NY) – glass bottles from India
• Atlapac Trading Company (Commerce, CA) – sweet corn in brine from Thailand
• Atlas Global Supply (Arlington, TX) – metal clothes hangers from Cambodia
• Aurolife Pharma LLC (Dayton, NJ) – high-density polyethylene (plastic) bottles from India
• Bacova Guild Ltd. (Covington, VA) – rubber mats from India
• Barbara Cosgrove Lamps (North Kansas City, MO) – handicrafts from India
• Carbon Activated Corp. (Compton, CA) – activated carbon from Sri Lanka
• Castings Inc. (Grand Junction, CO) – sanitary castings from India
• Chem One Ltd. (Houston, TX) – sodium formate from Turkey
• CLP Chemicals (Houston, TX) – glycerine from Indonesia
• Collaborative Advantage Marketing (Birmingham, MI) – coconut water from Thailand
• Del Valle, Kahman & Company (Buena Park, CA) – plywood from Indonesia
• Design by Deekay (Montclair, CA) – incense from India
• Donau Carbon Corporation (Springfield, NJ) – activated carbon from India
• Eagle Ottawa (Auburn Hills, MI) – buffalo leather from India
• G.L. Food Wholesale (City of Industry, CA) – soy sauce from the Philippines
• Gemini Food Corporation (Walnut, CA) – chili sauce from Thailand
• Global Agri-Trade Corporation (Long Beach, CA) – palmitic acid from Indonesia
• Goodman Manufacturing Company (Houston, TX) – air conditioning parts from Thailand
• Hankook Tire America Corp. (Wayne, NJ) – tires from Indonesia
• Home Design Store (Coral Gables, FL) – wooden products from India
• Homegoods (Framingham, MA) – brooms from Sri Lanka
• IKEA Supply (Perryville, MD) – ceramic sanitarywares from Turkey
• Innoleo LLC (Boca Raton, FL) – ricinoleic acid from India
• Kimberly-Clark Global Sales (Romeoville, IL) – latex gloves from Thailand
• Ludlow Composites (Fremont, OH) – rubber mats from India
• Main Street Décor (Rancho Cucamonga, CA) – wooden picture frames from Indonesia
• Mizuno USA (Norcross, GA) – batting gloves from Indonesia
• MM Composite Inc. (Fort Madison, IA) – epoxide resin from Thailand
• Montebello Packaging (Lebanon, KY) – aluminum discs from Thailand
• Nissan North America (Canton, MS) – steering components from Brazil
• Nitta Gelatin (Morrisville, NC) – gelatin from India
• Pacific Coral Seafood (Miami, FL) – frozen fried plantains from Ecuador
• Panamerican Food LLC (Miami, FL) – frozen bakery products from Uruguay
• Perfette Van Melle (Hebron, KY) – sugar-free gum from Turkey
• Pharmexcipient Inc. (Boca Raton, FL) – microchrystaline cellulose from Brazil
• Platinum Goods Corp. (Miami, FL) – coconut water from Brazil
• Pro Comp USA (Chula Vista, CA) – leaf springs from India
• Ramcar Batteries (Commerce, CA) – lead-acid storage batteries from the Philippines
• Rice Import USA (Hicksville, NY) – parboiled rice from Pakistan
• Rubbermaid Commercial Products (Winchester, VA) – brooms from Sri Lanka
• Spazio Marble and Granite (Lake Worth, FL) – travertine from Brazil
• Spicy Sense (Los Angeles, CA) – coconut milk from Thailand
• Stash Tea Company (Tigard, OR) – lemongrass from Thailand
• Stauber California (Fullerton, CA) – papaya fruit powder from India
• Sullair Corporation (Michigan City, IN) – air intake filters from Turkey
• Summit Flexible Products (Dayton, OH) – rubber floor mats from India
• Sun Lee Inc. (Los Angeles, CA) – corn and other food products from Thailand
• Superior Mfg. Group (Bedford Park, IL) – rubber floor mats from India
• Tecumseh Compressor Co. (Ann Arbor, MI) – electrical relays from Brazil
• TG Medical USA (Azusa, CA) – latex gloves from Thailand
• The Incense Works Inc. (Pleasant Lake, IN) – incense from India
• Vipac Inc. (Edison, NJ) – plastic bags from India
• Viraj USA (Garden City, NY) – threaded metal products from India

Again, if your company is in that last group and you want to add your name to the free GSP supporter list, you can do it here.

• They are headquartered in 42 states (plus DC) and 221 congressional districts and you can download the list by supporter list by congressional district here.
• They range from sole proprietors to some of the largest corporations in the world, but about 78% are small businesses with 100 or less employees, and the median number of employees is just 15.
• GSP savings range from as little as $1,000 to millions of dollars per year.
• They import from more than a quarter of GSP-eligible countries, including: Bangladesh, Bhutan, Bolivia, Brazil, Burkina Faso, Cambodia, Ecuador, Egypt, Georgia, Ghana, Haiti, India, Indonesia, Kazakhstan, Kenya, Lebanon, Macedonia, Madagascar, Malawi, Mali, Nepal, Pakistan, Paraguay, Philippines, Russia, Senegal, South Africa, Sri Lanka, Tanzania, Thailand, Tunisia, Turkey, Ukraine, and Uruguay.

For those comparing to our last update, we’ve added 2 states (New Hampshire and Vermont), a number of new CDs, enough very small businesses to drop the median employees from 17 to 15,  and one new GSP-eligible country (Ukraine).

If you’re not yet on the list, be sure to add your name here.

Meanwhile, it appears that Ecuador has decided to unilaterally renounce its ATPA benefits, claiming that the United States was attempting to use them as “blackmail” to prevent Ecuador from granting asylum to Edward Snowden. It is not clear whether Ecuador also intended to renounce GSP benefits, but certain Members of Congress seem to think it’s appropriate.

The GSP’s importance to its beneficiary countries cannot be underestimated. The import program benefits more than 3.8 billion people living in two-thirds of the world’s economies. They rely on GSP duty-free exports to the United States to create tangible economic development.

The letter also noted that when GSP was allowed to expire for 10 months back in 2011:

U.S. imports of GSP-eligible items during that period decreased by over 17 percent, while overall U.S. imports increased by 15 percent.

We’re in the process of collecting company/association signatures for a similar U.S. business letter.  If you’d like your organization to be on that letter, just add your name (if you haven’t already) to our GSP Supporter List.  But act quick, as our letter will be going out VERY soon!