Cell cast acrylic is the raw material used to create the barriers in almost every public space, where one person must interact with another, throughout the entire United States. Cell cast acrylic production in the United States is limited. Imposing duties on products that do not threaten U.S. manufacturing and in fact, create thousands of fabrication and installation jobs, would have resulted in high COVID barrier costs which would have siphoned funds from the purchase of all types of PPE’s during this pandemic.

Put differently: the materials for the plastic barriers now installed everywhere aren’t available from U.S. sources, and GSP helps keep costs low so money can be better spent on other protective measures.

The acrylics example is important for two reasons: 1) everyone has seen the new plastic barriers even if they don’t know what they’re made from, and 2) they would never be classified as a “medical product” in the traditional sense of “what’s needed to battle Covid-19?” For example, they are nowhere to be found in the USITC’s recent report COVID-19 Related Goods: U.S. Imports and Tariffs.

The trade data shows demand for cell cast acrylics has surged in recent months. Compared to 2019, GSP imports were up about 80% in May 2020, 130% in June, and nearly 200% in July. Non-GSP imports were flat in May, up 50% in June and up 100% in July – still strong but clearly showing the important role of GSP benefits in meeting this new demand.

Importers of similar products, such as rubber gloves, have reported similar expectations. One importer of non-medical gloves said current demand for rubber gloves is at least twice – and perhaps as much as nine times – global manufacturing capacity. While lost GSP won’t reduce demand, it could mean up to $10 million annually in extra taxes on rubber gloves alone.

Face masks from Thailand, which lost GSP in April, are the flip side of the coin. Lost GSP won’t reduce Covid-driven demand, but it will raise costs for Americans responding to the pandemic. Congressional failure to renew GSP would add acrylic barriers, rubber gloves, and many other to the list of Covid-related products made “more expensive than necessary” due to tariffs.

Given the strong bipartisan support for GSP (here, or more recently here), hopefully Congress will act soon to avoid this and many other painful tariff hikes for American companies, workers, and consumers.

In July alone, American companies paid over $275,000 on non-disposable cloth face masks from Thailand – and about $25,000 on other types of face masks – that face 7% tariffs without GSP. The next highest tariff line, certain off-road tires, faced a little over $200,000 in new tariffs due to lost GSP.

Such analysis was not possible until recent changes to how the United States reports import data for certain health-related products. Historically cloth face masks were reported in a catch-all “other made-up [textile] articles” category (HTS 6307.90.9889), but that catch-all category was subdivided into the following categories starting July 1:

• N95 Respirators Of Textiles (HTS 6307.90.9845)
• Respirators Of Textiles, Other Than N95 (HTS 6307.90.9850)
• Face Masks Of Textiles, Disposable (HTS 6307.90.9870)
• Face Masks Of Textiles, Other Than Disposable (HTS 6307.90.9875)
• Other Made Up Textile Articles (HTS 6307.90.9891)

Data show the old catch-all category of imports faced nearly $800,000 in tariffs in May/June – about 80% more than the next highest tariff line. And while we cannot know exactly how much of those tariffs were on masks, the July breakdown suggests it is a large majority.

Import trends clearly show tariffs from suspended GSP are hurting Americans, not Thais. While Americans are paying hundreds of thousands of dollars per month in extra tariffs, Thai exporters are shipping more than ever due to surging demand from Covid-19. It’s a lose-lose scenario for everyday Americans and for those that want to use punitive tariffs as leverage.

While the specific tariff costs for Thai masks couldn’t be known until recently, the potential costs were obvious before the GSP suspension took effect. In mid-April, 17 national associations asked the Trump Administration to delay implementation of the GSP suspension. The letter warned that the move “could undermine COVID-19 response directly” and “the United States should not reduce sourcing options or raise costs for potentially important products.”

Recognizing that higher tariffs for face masks would hurt Americans, the Trump administration suspended Section 301 China tariffs on these products in March. The Administration similarly could reinstate GSP benefits for Thailand, or it could continue harming Americans by imposing punitive tariffs on needed items.