These benefits generally are recognized – when Congress last renewed GSP there were big bipartisan votes in both the Senate and the House – but the challenge has often been getting that vote. Failure to hold a vote in both the House and Senate caused U.S. companies to pay about $1.3 billion in unnecessary taxes between mid-2013 and mid-2015. As such, companies must re-double their efforts to show the importance of renewing GSP before it expires again on December 31, 2017.

As part of that, the Coalition for GSP today released new state-by-state reports on GSP imports, savings, and company benefits for 2015.

The Coalition also created a new website section with shareable graphics. In addition to infographics with 2015 national GSP imports and 2016 monthly snapshots (updated as new data become available),the page also contains new state-specific infographics on 2015 savings for all 50 states.

We are also encouraging companies to continue signing on to our free GSP Supporter List. Stay tuned for more way to get involved and show the importance of imports, and GSP specifically, for America.

This post is part of the 5th Annual “Imports Work for America Week.“ For more information visit the Imports Work website.

Select artisans in India working with GSP importer WorldFinds

While we generally focus on the benefits to U.S. companies of the GSP program, it is important to remember that sourcing from GSP countries has a positive impact on the lives of workers and their families in developing countries. Sometimes, the benefits to poor workers come simply from having a job that otherwise would not exist without the additional U.S. demand created by GSP. Often times, though, U.S. companies importing under GSP choose to go above and beyond in terms of promoting development.

For example, Preferred Brands International in Stamford, Connecticut imports ready-to-eat food products from India. The company cares about more than just increasing sales of its Tasty Bite brand foods: it uses its 23-acre farm in India as a demonstration location to teach best practices in organic and sustainable farming and has a number of community initiatives such as a scholarship fund for factory workers’ children.

Similarly, Nina Designs in Emeryville, California imports fair trade jewelry from multiple GSP countries. This small business has funded $115,000 in microloans to more more than 150 women artisans in 20 developing countries, most of which are GSP beneficiaries. One of the company’s microloan partners is Novica (also on the GSP Supporter List), which has sent more than $68 million to artisans around the world. Nina Designs’ commitment to employees is simply inspirational.

The examples of the companies above run counter to what nearly all trade critics think about imports from lower-wage countries. While GSP and programs like it help make such development possible, they are not guaranteed. For example, WorldFinds in Westmont, Illinois paid $6,000 in extra taxes in the first month after GSP expired in 2013. In the words of founder Kelly Weinberger:

“These tariffs are paralyzing us as a small fair trade business with limited resources and an already tight clash flow. Suddenly a huge amount of money needs to be reallocated to pay tariffs instead of being able to order more product from our low-income artisan groups.”

So while GSP benefits help economic development both at home and abroad (such as WorldFinds artisans pictured above), GSP expiration can quickly reverse those gains. That is just one more reason that Congress must pass legislation to renew GSP early next year to prevent another expiration when its authorization expires on December 31, 2017.

This post is part of the 5th Annual “Imports Work for America Week.“ For more information visit the Imports Work website.

According to the Census Bureau’s 2013-2014 Profile of U.S. Importing and Exporting Companies, about 36,000 American manufacturers were importers in 2014. A separate table showed that 25,000 manufacturers were both exporters and importers. Put differently, nearly 70 percent of manufacturers that imported also exported products in 2014. So any efforts to raise the costs of imports are likely to drive up the costs of U.S. manufacturing, thereby making U.S. exports less competitive as well.

The GSP program helps demonstrate the importance of imports for manufacturers. In 2015, about two-thirds of all imports under GSP were raw materials, components and parts used to make other things in the United States. GSP waved over $400 million in taxes on those products – or about 60 percent of the total tariffs waived by the GSP program in 2015. By comparison, those same products account for just one-third of total U.S. tariffs collected (from all countries) in 2015.

For some states, basically all products imported under GSP in 2015 were raw materials, components and parts. For example, 99.7 percent of tariffs waived on imports into West Virginia in 2015 were for raw materials and parts. These included primary form plastics, chemicals, and transmission parts. Raw materials are parts accounted for 90 percent or more of the tariffs waived by GSP last year in several other states, including Wyoming, Louisiana, Michigan, Indiana, and Alaska.

When import costs are increased, such as when GSP was allowed to expire, American manufacturers (and their workers) suffer. For example, the new taxes associated with GSP expiration after one year forced Matrix Metals to lay off 75 workers in Iowa and Texas and prevented McGuire Manufacturing from replacing two full-time workers that left the small, Connecticut-based company.

Manufacturing jobs losses like those are completely avoidable. Eventually, Congress approved GSP renewal with big bipartisan votes in both the Senate and the House. Yet the false belief that imports must displace U.S. production fails to account for the fact that most imports, especially those under GSP, actually help make American manufacturers more competitive.

So it is ironic that the ease with which people benefit from imports – across every aspect of their lives – allows them take those benefits for granted. This is particularly true for goods brought in under special programs like GSP that most Americans simply do not know exist. For example, GSP eliminated more than $250 million in import taxes on food and consumer goods in 2015 – yet we know of only one person who has actually sought to identify GSP-eligible products in their home (this author). Here are some of the things we have found over the years.

GSP eliminates the 8 percent import tax on ceramic dinnerware sets from Indonesia. In 2015, GSP waived more than $3.5 million in import taxes on such products.


GSP eliminates the 2 percent tariff on stainless steel dog bowls from India. In 2015, GSP waived about $2.5 million in import taxes on these dog bowls (and related household items), such as the one used by Dan’s dog, Duchess.

GSP eliminates the 3.9 percent tariff on wooden picture frames from Thailand. In 2015, GSP waived about $750,000 in import taxes on wooden frames from Thailand and another $1.2 million more on imports from other GSP countries.

GSP eliminates tariffs of up to 6.4 percent on the food items pictured below. Not only are the products potentially eligible for GSP, all of those brands are on the GSP Supporter List. In 2015, GSP waived about $90 million in tariffs across all food types.

Of course, GSP could do more. There has been an influx of baby clothes over the last two years, many of which come from GSP countries, such as those pictured below. However, most apparel is excluded from GSP, meaning that the United States collected nearly $80 million in taxes on baby clothes from GSP countries alone.

Left: Indonesian cotton shirt (19.7 percent import tax); Center: Indian Gerber Onesie, Indonesian plaid bodysuit (8.1 percent import tax each); Right: Cambodian crab tee shirt (14.9 percent import tax)

For all of the products above, the difference between lower and higher prices for American families is congressional action on GSP. (While not currently in the program, there is nothing the prevents Congress from changing the statute to allow benefits for apparel imports, or even a subsection such as baby clothes.) Similar examples could be found in just about every home in America – if the right person is looking.

Lack of awareness of programs such as GSP does and should not preclude families from the benefits of imports. But it does make it incumbent upon those companies and associations that understand the importance of imports to promote them – and that is why the Coalition for GSP is proud to support “Imports Work for America” week.

This post is part of the 5th Annual “Imports Work for America Week.“ For more information visit the Imports Work website.

This was made evident by a September 2014 survey report showing that 13 percent of respondent companies had laid off workers because of GSP expiration, while 44 percent reported a hiring freeze. After two long years of GSP expiration – and stalled job creation – the renewal allowed American importers that rely on the GSP program to begin hiring again.

Take Fab-Line Machinery, a small business with facilities in St. Charles, Illinois and Nashville, Tennessee, that imports metal fabrication machinery from Turkey under GSP. GSP expiration forced Fab-Line to pay an extra $350,000 in taxes in one year and resulted in the laying off of one worker. Within two months of GSP renewal, Fab-Line had hired a new service manager and a new regional manager.

Similarly, Ferndale, Washington-based small business Kona Bicycle could not add any new employees while GSP remained expired. But once it was assured of renewal and refunds of tariffs paid during the nearly two-year expiration, Kona hired a senior engineer and an industrial designer. Kona moved so quickly to hire the workers that the GSP program had not yet gone back into effect!

Primetac, a family-owned small business in Little Ferry, New Jersey, also brought on new workers immediately following GSP renewal. Primetac hired a west coast sales manager and started the search for another representative in California. It not only has more employees – it is paying them better. After freezing pay for several years because of GSP expiration, all employees received raises in 2016. The company also undertook a number of capital investments – including a forklift purchase and a new LED lighting system for its warehouse – supporting yet more American jobs.

So while candidates take increasing tough anti-trade and anti-import positions, they would be wise to the recognize what happens policies raising import taxes are enacted: American jobs are lost, not created, particularly at small businesses. GSP expiration taught that lesson the hard way.

This post is part of the 5th Annual “Imports Work for America Week.“ For more information visit the Imports Work website.

A study unveiled during Imports Work Week in 2013 found that 16 million U.S. jobs depend on imports. Another study by HSBC shows that imports save the average U.S. family $13,600 a year.  Yet another 2013 study found that the U.S. value-added for imported apparel equals about 70 percent. And of course, numerous Coalition for GSP reports have shown the positive impacts of the GSP program on American companies – and the negative impacts when Congress allows GSP to expire.

More information about Imports Work Week can be found at www.importswork.com or through Twitter at @importswork.

Raw materials, components, and parts have accounted for more than 70 percent of GSP imports since the program expired. Though industrial tariffs tend to be low, these products accounted for about 64 percent of the tariffs paid since GSP expired. Nationally, only a third of US tariffs collected during that period were on raw materials, components, and parts. Put differently, the burden of GSP expiration falls disproportionately on American producers.

Fortunately, policymakers get this. Before yesterday’s Senate vote on legislation that would renew GSP, Senate Finance Chairman Orrin Hatch noted that:

manufacturers and importers benefit by receiving inputs and raw materials at a lower cost. Approximately three-quarters of U.S. imports under GSP are raw materials, parts and components, or machinery and equipment used by U.S. companies to manufacture goods here at home. Unfortunately, because the program expired in 2013, these U.S. businesses have had to deal with high tariffs on these imports for the last two years.

If the national numbers sound impressive, then you’ll want to take a look at the chart below. In a few states, GSP importers use the program exclusively for raw materials and parts. In West Virginia, more than 99 percent of tariffs paid to date were on industrial supplies. In Louisiana and Alaska, it is more than 97 percent.

In value terms, Texas ranks first (or last, since additional taxes are bad) in tariffs paid for raw materials and parts because of GSP expiration. This is despite having paid significantly less tariffs than California or New Jersey on imports of all products. From August 2013 to March 2015, Texas companies paid an estimated $76 million in extra tariffs on raw materials and parts alone.

Fortunately for American manufacturers, the Senate took an important first step yesterday by overwhelmingly passing legislation that would renew GSP through December 2017 and refund most tariffs paid to date. The House of Representatives must pass identical legislation before American producers can once again enjoy duty-free benefits for key components. For manufacturers in many states, House action cannot come soon enough.

This post is part of the 4th Annual “Imports Work for America Week.“ For more information visit the Imports Work website.

GSP benefits can be found all around us – if you’re willing to check out the “Made in” labels. Of course, the ongoing GSP expiration has raised costs for importing all of those everyday products. Between August 2013 and March 2015, GSP expiration increased import taxes on consumer goods by about $256 million. Add in food products and the total climbs to about $400 million.

A new addition to the family means lots of new tags to examine – many of them from GSP countries – such as those pictured below.

Left: Indonesian cotton shirt (19.7 percent import tax); Center: Indian Gerber Onesie, Indonesian plaid bodysuit (8.1 percent import tax each); Right: Cambodian crab tee shirt (14.9 percent import tax)

Unfortunately, while purchased from GSP countries, these products are excluded from GSP because of statutory exclusions for apparel. These exclusions are unlikely to change, as apparel is considered a sensitive product. And it is American families that pay the price, because clothes for very little people have very big (hidden) taxes baked into the price – up to almost 20 percent on the products shown above.

Over the same period that GSP-eligible everyday products faced $400 million in taxes because of expiration, taxes on (ineligible) baby clothes alone from GSP countries totaled another $128 million. The average tax was 11.1 percent. Other apparel products face similarly high tariffs. Even the baby is shocked (left) and disappointed (right) at the high taxes on clothes that he will outgrow after just a few wearings!

While GSP benefits for apparel may be a pipe dream, there is a glimmer of hope for American families and workers looking to save even more money from GSP.  The legislation passed by the Senate Finance Committee that would renew GSP also includes provisions known as GSP UPDATE, which would open the door to GSP benefits for travel goods such as backpacks, luggage, and phone cases. The House version of the bill does not include the GSP UPDATE provisions, so it remains to be seen whether they are enacted into law.

Of course, all of these savings are hypothetical so long as GSP itself remains expired. Let’s hope Congress can act soon to renew GSP and expand its coverage. American families will benefits, even if they don’t take the time to read all the “Made In…” labels.

This post is part of the 4th Annual “Imports Work for America Week.“ For more information visit the Imports Work website.

Nothing has made the importance of GSP for American jobs more apparent than its continued expiration. As we noted around this time last year, a March 2014 survey showed that 10 percent of companies had laid off workers, while 31 percent had delayed hires. By September 2014, the number of companies reporting lay offs increased to 13 percent, while the number reporting a hiring freeze climbed to 44 percent.

Take Sophia Foods, a small business in New York. According to owner Candace Abitbul:

“We planned to purchase a property and double our size, but due to waning sales directly related to GSP we have put that idea on hold. Furthermore, until we know where we stand on the [GSP] issue, we have not only implemented a hiring freeze, but have had to lay off two employees.”

This situation was not just avoidable, but predictable. Kona Bicycle in Washington is another small business for which GSP expiration has impacted its ability to create American jobs. According to Chairman Jacob Heilbron:

“We’re unable to raise prices during our model year so the loss of profit is absorbed into our bottom line. We would like to hire new U.S. based personnel for our R&D/Product Development team but are waiting until GSP is renewed.”

After nearly 2 years, Kona Bicycle is still waiting. Higher prices for imports doesn’t just impact the quantity of jobs – it impacts the quality as well. Between March 2014 and September 2014, the share of companies reporting worker benefits cuts because of GSP expiration doubled from 11 percent to 22 percent. Stackhouse Athletic in Oregon and HiBlow USA in Michigan both cut health benefits for workers, while Fast-Pak Trading in New Jersey cut salaries by 20 percent across the board (in addition to laying off workers).

More recently in an April 2105 survey, 22 percent of companies reported layoffs (+9 percentage points from September 2014); 43 percent reported hiring freezes (-1 percentage point), and 26 percent reported benefits cuts (+4 percentage points). Since different companies responded to each survey, these are not quite apples-to-apples comparisons, but the trends certainly are not positive.

What is positive? Congressional focus on a robust trade agenda that includes legislation to renew GSP through December 2017 and refund (most) tariffs paid to date. As Congress seeks to advance bipartisan trade legislation during World Trade Month, it should remember that American jobs depend not just on access to foreign export markets, but also on access to low-cost imports. GSP expiration has taught that lesson the hard way.

This post is part of the 4th Annual “Imports Work for America Week.“ For more information visit the Imports Work website.

• American importers have been forced to pay an estimated $510 million in higher import taxes;
• Higher costs and reduced sales have forced companies to lay off workers, delay new hires, and put major investments on hold while waiting to see if Congress will renew GSP retroactively, and
• The number of American organizations calling on Congress to renew GSP has grown from 160 to 550, on average more than 1 new company or association per day.

Simply renewing GSP going forward is not enough – any renewal must refund the half a billion in tariffs already paid by U.S. companies. This would allow companies to reverse some of the damages caused by expiration. But it’s not just about the money. It’s also about importers’ faith in Congress to do the right thing when it comes to GSP.

As noted yesterday, GSP has expired 9 (!) times in its history, with expirations ranging from a few weeks to 15 months. Each of the first 8 times, importers were refunded tariffs paid. Congress’ track record – to at least make amends when it could not avoid expiration in the first place – provides importers with a reason to continue importing under GSP as the expiration date approaches (or sails on by). If this trust is broken even once, that could not be undone.

If you’re a congressional staffer or even a Member of Congress…try to put yourself in an importing company’s position. How would you react to the following hypothetical – but possibly very real – scenario?

• It takes 4 months between placing an order from a GSP country and delivery in the United States;
• GSP is scheduled to expire in 3 months;
• the last two times GSP was up for reauthorization, Congress failed to renew it despite strong bipartisan support in the House and the support of 99 of 100 Senators;
• those two expirations each lasted at least 10 months, and
• tariffs paid during the last expiration were not refunded.

Would you feel comfortable signing a major contract where the only difference between profitability and losses is a Congressional vote? Would you trust Congress to get the job done when your money is on the line?

To a certain extent, companies are already in that position. But Congress’ track record of always refunding tariffs paid alleviates some concerns about continued sourcing under GSP. Congress can remove all doubt by passing an immediate, retroactive GSP renewal.

Imports, including those under the GSP program, can do wonders for the American economy. But policymakers must first recognize their benefits and take concrete steps to encourage them. That might be harder than claiming to be “pro-export,” but it is no less important, as the impacts of GSP expiration have shown. Voting immediately to renew GSP and refund tariffs paid to date is one concrete step that Congress can take to show it recognizes the benefits of trade – both exports and imports – for the American economy.