Due to GSP expiration, Ciranda has paid over $209,000 in extra tariffs on imports of tapioca powders and syrups, coconut products, rice syrup and powders from Brazil, Pakistan, Philippines, and Thailand. The need to pass these costs onto customers led sales to fall. Even if tariffs paid (eventually) are refunded, those lost sales can’t be regained. As an employee-owned company, everyone at Ciranda is impacted by those lost sales and profits.

Ciranda is a great example of the kind of trade GSP is meant to promote. Its qualification process includes an in-person visit to every supplier. While on-site, it observes each ingredient’s journey from the field to the processing plant. In addition to evaluating product quality, it surveys working conditions, fair labor practices, and the overall environmental health of the project. In 2020, Ciranda published a book highlighting the farmers around the world growing their product.

By eliminating U.S. tariffs on sustainable food ingredients, GSP helps companies like Ciranda do “more good” for workers and the environment in developing countries and the United States. Their example also highlights the risk of imposing too many eligible criteria on GSP countries for which higher tariffs are the only possible punishment. No matter how well-intentioned a new GSP criterion (e.g., on environment) may be, terminating GSP often hurts those meeting or exceeding even the highest standards. That’s why the Coalition believes Congress should consider changes to mitigate any punitive actions as part of GSP renewal, such as supporting partial (instead of full) terminations and/or creating a mechanism for good actors to retain benefits.

Note: Ciranda’s story came from a new Coalition survey on expiration impacts. GSP importers can take the survey here.

GSP eliminates tens of thousands of dollars in tariffs annually for dZi, “enough to pay for staff health care or a new employee.” dZi’s 10-person staff in western Massachusetts handle all aspects of design, marketing, warehousing, fulfillment, and customer service – “soup to nuts” as founder and CEO Mac McCoy says.

Watch Mac explain why he urges “all of Congress to move on this cornerstone of good American policy that helps both businesses in our country and struggling communities in developing countries.”

If you’re a GSP importer, submit your own video testimonial here.

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.

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.

The submission came from Kelly Weinberger of WorldFinds in Westmont, IL. The company employs 8 people domestically and works with artisans around the world like Rami in Indonesia and Sushma in India. (Check out some of their jewelry we found here.) According to Kelly, the company paid $6,000 in extra taxes on handicraft imports in August alone and expects to pay another $6,000 in September if GSP benefits are not reinstated. In her words:

“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.”

Let’s consider the full ramifications of reallocating money from new purchases to paying tariffs. Reduced work for poor women like Rami means less money for things like their children’s schooling. Reduced inventories for companies like WorldFinds means lower sales and profits. Reduced sales and profits means fewer resources for future product purchases. Repeat.

So while GSP benefits help economic development both at home and abroad, GSP expiration can quickly reverse those gains.

If your taxes have gone up because of GSP expiration, please tell your story (there’s an option to remain anonymous) by filling out our survey here.