In the first two months of expiration, American companies paid at least $135 million in extra taxes as a result of GSP expiration. The map below shows estimated tariffs for products claiming GSP paid by state.

The products facing the most new tariffs vary greatly by state:

• In New York, gold jewelry faced $2.4 million in new tariffs.
• In Florida, roses faced another $2.2 million in new tariffs due to GSP expiration (on top of $1.8 million in January) in the run-up to Valentine’s Day.
• In Texas, nearly $800,000 in tariffs were paid on plywood.
• In Pennsylvania, nearly $400,000 in tariffs were paid on colored pencils.
• In Ohio, $200,000 in tariffs were paid on wire harnesses used in auto manufacturing.

The data on tariffs paid is a conservative estimate, and the real figure likely is millions of dollars more. Why? Estimates only capture products that continued to claim GSP despite expiration. Yet imports of many products that traditionally get GSP did not claim it in February. Tariffs paid on those imports still would be eligible for refunds in the event of a retroactive renewal, but importers would need to file manual requests.

GSP expiration is already costing American jobs and raising prices for American companies that need inputs and consumers that purchase finished goods. It is critical that Congress renew GSP – with refunds for tariffs paid – as soon as possible. To help the Coalition for GSP educate policymakers on who is hurt by expiration (and how), companies are strongly encouraged to:

• write their lawmakers about GSP renewal with our Contact Congress tool
• join the Coalition for GSP
• add their name to the free GSP supporter list
• answer our very short survey on GSP expiration impacts to date

Dear Legislators,                                                                                                           

My name is Nina Cooper and my company, Nina Designs, has been working to improve the lives of women in Indonesia and Thailand for over 30 years by providing secure jobs with benefits, fair wages and equal opportunity for advancement. Our company produces silver jewelry and jewelry making supplies.

https://www.ninadesigns.com/about-us/fair-trade

The GSP is a key factor in our ability to grow our company over the years and provide opportunities for women to thrive.  As you will see, their jobs in silver production have become a lifeline for extended families during the pandemic. Below you will find biographical details of three women who work at our production facility in Bali so that you can see how the impact of the GSP plays out over time.

Our Nina Designs community includes not only the wonderful artisans who craft our products but over 1,000 women jewelry designers in the USA who incorporate our silver charms and findings into their own jewelry. Most of these women work from their homes while raising children and homeschooling them during the pandemic. We also have 12 women working in California to keep our company running smoothly. They design and distribute our beautiful silver products. Finally, we have supported women artisans internationally through our microloan program which has lent over $200,000 to over 700 women in 30 countries. This complex and hard earned ecosystem of mutual support is in jeopardy unless you vote to renew the GSP.

I entreat Congress to reinstate the GSP so that my company can continue empowering women around the world.

“After graduating high school, I started work at Jani Silver 24 years ago as a silver smith because I loved the world of Fashion, especially jewelry. After work, in my free time, I used to teach myself English and computer. One day I asked my boss, Ibu Janet, if I could change to a position in the office. She explained that as I was such a productive smith, I would earn more doing that than data entry. I explained that I felt one day I could reach a senior management position if I was given the opportunity and then I would earn more. She laughed because I was so enthusiastic. I felt that I could combine my silversmithing knowledge with good management systems and when that proved to be true, I was so happy!

My husband, parents and my children all support me and my work. My salary supports not only my own family, but also my extended family.  Since I started here, I married and had 2 children. I was extremely lucky that our company has a policy of 3 months paid maternity leave, or 6 months leave on 50% salary. During the Covid Pandemic, each staff member has received food assistance. I share mine with people in my village who don’t have any income now. I am very grateful that I was given opportunities to advance in my career.  For several years I was a Materials / Logistics Planner and then Production Planner. Now I am the General Manager!  This was beyond my wildest dreams when I started as a silver smith.”

“I have really loved working here for the past 19 years. The owner and management team are good people who really care about the staff.  The income from my silver-smithing work is a huge help for all my family, including my parents in law, especially now that my husband lost his tourism related job.

We borrowed money (at 24% p/a) to build workers housing but now most people don’t have a job so they cannot afford to rent and just stay with their family in their village. So we also opened a small kiosk at the front of our house selling coffee, noodles, and farming supplies like chicken feed etc.

On my salary we can still eat well (but not as much meat as before) and educate our two children. Without my job, my family would be in a very difficult situation. The company pays the BPJS health insurance premiums that covers my whole family’s medical expenses. It also paid me twice for 3 months maternity leave.”

“I have worked here since I left school 22 years ago. I’ve always felt a strong sense of family both between me and my work mates and even between the management. Perhaps the most important thing is that with my salary, I am able to cover the living costs of my family, including my parents and pay for my two children’s schooling.  My husband used to work in tourism but since the Covid pandemic began he has had no work. I am very grateful for my job.”

While GSP was expired, Royal Chain paid more than $2 million in new tariffs. It lost millions of dollars more in sales because products were no longer competitive once tariffs were added to the cost. Royal Chain could not fill new positions, delayed equipment upgrades, and put expansion plans on hold.

(If you have not done so already, please answer the GSP renewal impacts survey here.)

Yet other companies, such as Novita in Monrovia, California, are still working to overcome the deep losses caused by GSP expiration. Novita imports jewelry from Indonesia that it sells to manufacturers, wholesalers, and retailers in the United States, Canada, Mexico, and South Africa.

While GSP was expired, Novita was forced to lay off 3 of its 17 workers. For the remaining 14, overtime was cut and salaries were reduced (or promised raises not given). Officers used personal loans and credit lines to loan the company funds so that it could continue paying bills. According to Vice President George Nazarian, Novita contemplated shutting down completely on account of GSP expiration.

Saying that GSP is crucial for Novita is a major understatement, but even a year after the retroactive renewal the company is not “whole” again:

• the $2 million in tariffs paid during expiration were refunded, but the $250,000 in interest payments to banks to keep the lights on are gone forever;
• the 14 remaining employees have received raised, but the 3 positions lost have not been refilled, and
• sales of GSP-eligible goods have increased over the past year, but they cannot “undo” the lost sales over a 2-year period.

And that is the reality of GSP expiration: at best it is a speed bump that slows the growth of small businesses like Summit and Sophia Foods. The other end of the spectrum is much worse. Novita was able to avoid the worst of potential outcomes, but the lingering negative effects of GSP expiration show why it is so important for Congress to renew GSP well before its scheduled expiration at the end of 2017.

Novita provided the above information in response to our GSP renewal impacts survey. If you have not done so already, please take a minute to answer these questions today. As always, all data will be kept confidential and no company-specific answers will be attributed unless permission is explicitly granted. You can find another company responses here, here, and here and some preliminary survey response data here and here.

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.

Overall, the value of GSP imports and tariff savings both increased by more than 10 percent compared to May 2015. Some states, such as Arkansas and Rhode Island, saw very large increases in GSP imports and savings compared to May 2015, as shown in the graphic below.

In Arkansas, GSP imports and savings both increased by 37 percent compared to one year earlier. Vanadium oxides and hydroxides from South Africa, firearms from Turkey, and transmission parts from Thailand contributed most to Arkansas’ GSP increases.

In Rhode Island, GSP imports increased by 79 percent and savings from GSP by 145 percent compared to one year earlier. Costume jewelry from Thailand, glass fibers from Sri Lanka, and metal picture frames from Turkey contributed most to Rhode Island’s GSP increases.

Imports from Cambodia jumped by 121 percent, led by increased imports of window blinds by companies in California. GSP eliminated about $109,000 in import taxes on buses in May and has waived more than $400,000 on imports of buses in the first five months of 2016.

Overall, GSP tariff savings increased increased by 31 percent compared to February 2015. The value of imports under GSP increased 30 percent. These sharp increases reflect abnormally low imports in February 2015 on account of the the West Coast port strikes.

Some states, including those not affected by the 2015 strikes such as Pennsylvania and Virginia, saw ever bigger increases in GSP imports and savings compared to February 2015, as shown in the graphic below.

In Pennsylvania, GSP imports increased by 52 percent and savings from GSP by 63 percent compared to one year earlier. Primary form plastics and pencils/crayons from Brazil, ferrochromium (a raw material for steel manufacturing) from Zimbabwe, and candy confections from Thailand contributed most to Pennsylvania’s GSP increases.

In Virginia, GSP imports increased by 39 percent and savings from GSP by 52 percent compared to one year earlier. Ceramic tableware and kitchenware from Indonesia, steering wheels and columns from India, and iron oxides from Brazil contributed most to Virginia’s GSP increases.

Imports from Uruguay jumped by 102 percent, led by increased imports of plywood by companies in Washington. GSP eliminated more than $580,000 in import taxes on silver jewelry. More than 40 percent of those imports went to New York.

These new taxes are beginning to take a toll on importers. MG Golf in Irving, Texas is a small business that imports golf gloves from Indonesia. MG Golf has paid more than $40,000 in higher taxes since GSP expired and was forced to lay off one of its warehouse employees. If GSP is not renewed in the near future, the company expects additional cost-cutting efforts will be necessary.

Higher taxes are the only problem for importers: for a small jewelry fabricator in California, many regular customers have refused to place orders no one can be certain that tariffs will be refunded. In addition to the $160,000 in new import taxes, the company has lost an additional $500,000 in sales.

And each day these problems get worse. That’s one reason that 10 new companies have joined the GSP supporter list in the last week alone. If you’re being hurt GSP expiration, make sure to add your organization (it’s free) here and take our latest expiration survey.

By county, the highest savings came on imports from India ($184.0 million), Thailand ($146.0 million), Indonesia ($94.3 million), Brazil ($86.4 million), and the Philippines ($48.6 million).

By product, the highest savings came on imports of radial car tires ($22.7 million), silver jewelry ($18.2 million), miscellaneous food products ($14.2 million), aluminum alloy plates and sheets (12.0 million), and ferrosilicon manganese, which is used to manufacture steel ($10.9 million).

While US tariffs are generally low, effective tariffs waived by GSP can be quite high.  For example, GSP saved American companies from paying tariffs of 17.9% on certain nuts and seeds, 15.0% on Romano and other cheeses, 12.5% on ballpoint pens, and 10.0% on ferrosilicon chromium.

If you have any questions about the data, give us a call at 202-347-1085, and if you’re a company importing these or other GSP products, make sure to add your name to our Supporter List.