2019 GSP highlights by sector

Dan Anthony — Wed, 13 May 2020 12:15:10 +0000

In 2019, GSP saved American companies $1.035 billion in eliminated tariffs, including $24 million on Covid-related products. The graphic below highlights the variety of products imported under GSP last year.

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.

In August, the GSP program saved American companies $62 million on about $1.6 billion in imports. The value of GSP imports increased by about 5 percent, while tariff savings increased by about 11 percent compared to August 2015.

Overall, GSP saved U.S. companies $472 million in the first eight months of 2016. GSP savings in 2016 are up about $40 million, or 9 percent, compared to the first eight months of 2015.

Some states, such as Colorado and North Carolina, saw particularly large increases in GSP imports and savings compared to August 2015, as shown in the graphic below.

In Colorado, GSP imports increased by about 19 percent and savings by about 46 percent compared to one year earlier. Optical goods from the Philippines, electric motor parts from India, and monumental building stone from Brazil all contributed to Colorado’s GSP increases.

In North Carolina, GSP imports increased by 14 percent and savings from GSP by 21 percent compared to one year earlier. Chemicals from the Philippines, batteries from Indonesia, and furniture fittings from Thailand contributed most to North Carolina’s GSP increases.

Savings on GSP imports from Brazil jumped 30 percent, led by increased imports of machining centers in Ohio. GSP eliminated about $184,000 in import taxes on microphones in August, with more than $100,000 saved on imports into California alone.

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

electric motors – Renew GSP Today

2019 GSP highlights by sector

GSP Saved American Companies $62 Million in August 2016