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.

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, 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.

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!