GSP expiration in 2013 made its products less competitive and cost 3V millions of dollars in lost sales. At the same time, customers that continued purchasing at higher prices were made less competitive by the extra $500,000 in taxes assessed by Customs.

The retroactive GSP renewal by Congress allowed 3V Sigma to build an addition to its warehouse and lowered taxes on the business by hundreds of thousands of dollars. Continued GSP benefits are pivotal for 3V Sigma and the American manufacturers it supplies.

Matr Boomie relies on GSP savings to keep its imports of handcrafted gifts and accessories profitable. When GSP expired in 2013, Matr Boomie’s margin shrank substantially.

GSP renewal led to increased sales, profitability, and U.S. jobs for Matr Boomie. A big increase in sales resulted in GSP savings in the first year of renewal that exceeded the total tariffs paid over the 2-year expiration. Matr Boomie used GSP refunds and savings to hire 2 new workers in 2015 and 4 more in 2016 – nearly doubling its U.S. employment. It also increased salaries significantly.

When GSP expire in 2013, Primetac was forced to raise prices to compensate for those new import taxes. This was no small increase, as the company paid about $1.5 million in new tariffs. The resulting sales drop forced Primetac to freeze hiring, slash benefits, and delay certain investment plans.

The retroactive renewal allowed Primetac to hire 2 new hires and institute a profit-sharing plan for employees. Benefits were not limited to Primetac’s staff: it also purchased a forklift from Crown Industries in Ohio and hired a local contractor to move ahead with a lighting upgrade in its warehouse.

Primetac’s Peter Feniello emailed the other day with another update. After reiterating all the past good allowed by renewal, he added:

The other side of the argument is what we are NOT doing presently due to GSP uncertainty. We are in need of 2 hires (one in administration here in NJ, another as a territory salesperson). We are not going to move on these until the dust settles and GSP renewal is in sight.

Once again, despite expiration itself being 6 months away, companies are starting to pull back on investments and hiring.

Our Primetac profile page has more details about the importance of continued GSP benefits to the company (also available as a one-page PDF here or below).

Sophia Foods was forced to lay off workers each of the last two times Congress allowed GSP to expire. In 2011, it laid off two workers when profits plummeted due to higher tariff costs. As detailed in the 2014 GSP expiration impact survey report (featuring owners Candace and Danny Abitbul on the cover), GSP expiration in 2013 forced Sophia Foods to lay off two employees (out of 7) and implement a hiring freeze. The company also put plans to purchase a warehouse and expand its space on hold until it was sure about the future of the business, which was so closely tied to GSP renewal.

As Candace has noted, the uncertainly associated with GSP renewal/expiration can create paralysis for small businesses:

Stability is the key here. The living in limbo was the worst part of the GSP non-renewal period. We couldn’t move forward, but hesitated to move backward too much without knowing what might happen. It felt like a huge part of our cash flow was being held hostage, and making sound business decisions became increasingly impossible as time wore on.

With GSP back in place, Sophia Foods was able to hire 2 workers to fill the positions eliminated during expiration – and then add 2 more new positions. It increased benefits for all employees and doubled its square footage by expanding into neighboring warehouse space.

Our Sophia Foods profile page has more details about the importance of continued GSP benefits to the company (also available as a one-page PDF here or below).

GSP expiration in 2013 had a snowball effect familiar to many small business users of the program: raising prices to cover the new tariffs led to lower sales. Lower sales resulted in less money available to purchase new inventory, which in turn led to even lower sales. Eventually, Aid Through Trade was forced to freeze hiring and delay necessary equipment updates.

All for what many might consider to be modest tariffs of $30,000 extra over two years. Yet seemingly modest amounts can make a huge difference for small businesses like Aid Through Trade.

With GSP back in place, Aid Through Trade was able to hire a new worker in Maryland and give thousands of dollars in bonuses to its staff. It also invested in new technologies as sales have returned to pre-2013 levels.

Like many GSP program users, Aid Through Trade is both importer and exporter. (About 45% of GSP Supporter List companies export.) Aid Through Trade exports products that enter duty-free under GSP to Europe.

When GSP expired in 2013, Golden Country raised prices to reflect the new tariffs and saw sales drop as a result. It froze hiring – and couldn’t replace employees that left – and help off on updates to its Chicago facilities. Ultimately, the small business paid over $1 million in unnecessary tariffs while waiting for Congress to renew GSP.

GSP renewal allowed Golden Country to invest in both its people and facilities: Golden Country was able to give its employees raises and purchase new warehouse equipment and trucks. GSP eliminated about $400,000 in tariffs on Golden Country’s imports in the first year after renewal – savings that could be passed along to consumers.

When GSP expired in 2013, Fab-Line was forced to raise prices to compensate for those new import taxes. Ultimately the company paid about $350,000 in new tariffs. This hurt the company, which had to lay off one employee, and the American manufacturers that now had to pay more for Fab-Line’s equipment.

The retroactive renewal allowed Fab-Line to hire 2 new workers – a service manager and a service engineer. Yet Fab-Line President Patrick Canning says another potential expiration threatens the company again:

“If the GSP does not get signed I will raise my pricing to pay for the duties and of course that will have a negative impact on my business.”

GSP may not expire until December 31, but the decision date is much sooner for Fab-Line. According to our newest survey, Fab-Line will start placing orders for 2018 delivery in mid-August. If Congress has not renewed GSP before the August recess, Fab-Line will be forced to guess whether orders will be subject to extra taxes.

New tariffs from GSP expiration in 2013 put the company’s products at a disadvantage to Chinese mouldings, which typically account for 70+ percent of US imports. In total, Universal Arquati paid about $185,000 in extra taxes because of GSP expiration. The uncertainty regarding when, or even if, those taxes might be refunded led Universal Arquati to freeze all hiring and investments.

After 7 years of trials and tribulations, the start-up company reached break-even in 2013 and had grown to 20 employees. Then Congress allowed GSP to expire. As Thompson Traders’ President Fred Starr reported in January 2015:

“Due to our financial position and our inability to pass this charge onto our customers, we had to slow down growth, including hiring. We would be a different company today without this totally unanticipated tariff. We’ve reduced our payroll by eight people, a 40% reduction and will not be adding people, until we have a better government environment, including the renewing of GSP.”

Ultimately, Thompson Traders paid $220,000 in higher taxes during the two-year GSP expiration.

With GSP reinstated and tariffs refunded, the company reinvested all of the refunds back into the business. The company initiated a major new product line in a new market in 2015. Thompson Traders rolled out stocking programs with three of its biggest customers and initiated a program to try to manufacture in the United States.

Today, Thompson Traders has 25 employees – more than before GSP expired in 2013 (and double the 12-employee low hit during GSP expiration). Growing sales meant that GSP saved the company nearly as much ($180,000) in the first year of renewal and it did in the two years of expiration ($220,000).

Our Thompson Traders profile page has more details about the importance of continued GSP benefits to the company (also available as a one-page PDF here or below).

Thompson Traders is just one of the GSP importers sharing how GSP allows its businesses and workers to thrive on our Company Profiles page.

GSP expiration in 2013 led to an estimated $1.5 million in sales for Kona, which also paid nearly $600,000 in tariffs. As Kona’s Chairman Jacob Heilbron said in 2014:

“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.”

While it took nearly a year to receive all of its tariff refunds, Kona took immediate steps to invest and hire new workers following GSP renewal in 2015. In the 30 days after GSP was renewed (but before benefits kicked back in), Kona hired a senior engineer and an industrial designer and had plans to hire a new product manager the next month. It has hired two more workers since and now has 32 employees, a nearly 20 percent increase over early 2015 before Congress renewed GSP.

Our Kona profile page has more details about the importance of continued GSP benefits to the company (also available as a one-page PDF here or below).

Kona is just one of the GSP importers sharing how GSP allows its businesses and workers to thrive on our Company Profiles page.