Burris Company, a manufacturer in Greeley, Colorado, has paid nearly $400,000 in tariffs due to GSP expiration. Vice President of Finance Mike Kinnison reports: “Burris Company manufactures as well as imports. The lower cost of imports helps to sustain our manufacturing and keep overall costs low. Additional tariffs puts US manufacturing at risk. Much more delay will result in canceling any large capital investments and lead to layoffs.”

Franklin Mfg Inc. in Jericho, New York has paid about $25,000 in tariffs due to GSP expiration. It raised prices to reflect tariffs, which led to lost sales and lower planned purchases going forward. As Franklin Mfg President and Owner Jesse Taube reports: “We are in a vulnerable position to lose our current customers due to not being as competitive.”

Fusion Gourmet, a food importer in Rancho Dominguez, California that has paid $25,000 in tariffs, similarly raised prices and lost sales. According to Fusion Gourmet President Steve Liaw, job impacts are felt by workers in both the United States and Indonesia, it’s primary GSP source country.

• In the United States: “Due to increased costs related to GSP, we are not able to increase our hiring for 2021. These additional costs directly impact our budget that we allocate towards seasonal hiring.”
• In Indonesia: “We will also reduce our orders from factories that are in countries impacted by GSP. This lost revenue will negatively impact these factories which are usually 70+% women workers.”

A Simpler Time, which is based in Morrisville, North Carolina and also operates a retail store in New Orleans, Louisiana, reports how GSP expiration directly hurt wages for its American workers. According to A Simpler Time President Jeff King: “Normally [we] pay quarterly bonuses to employees, but have delayed them as we can’t pass all the increased costs on to customers.” It also didn’t replace a worker that left and reduced another’s hours due to a combination of higher import costs, supply chain issues, and retail sales that remain well below pre-Covid levels.

If you’re a company impacted by GSP expiration, please answer our very short survey on GSP expiration impacts to date (the source for all of the above examples). To further 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

Worker impacts from a small business that has paid $100,000 in tariffs: “GSP impact has been severe this year. Had to lay off 1 person and did not hire for a new sales position.”

Covid/worker impacts from a small business that has paid $350,000 in tariffs: “Covid19 shutdown reduced our cashflow, with GSP [expired] we don’t have the extra funds to order inventory we need. We were looking to hire at least 3 new employees. Now on hold due to GSP.”

China/worker impacts from a small business that has paid $40,000 in tariffs: “We rely heavily on Thailand produced goods in our market to compete with China imports from our competition. We are higher priced even without 10% tariffs. Now we have a real threat to our market share with cost increase on goods of 10%…Possible funds normally used for employee raised wages will be paid in new tariffs. This weakens our work force stability, thus threatening our output capacity.”

U.S. manufacturing impact from a business that has paid $15,000 in tariffs (but estimates $350,000 in tariffs if GSP remains expired all year): “We are selling our aluminum products to a leading US HVAC manufacture and those products are excluded from 232 tariff but we still have to pay the standard duty without GSP.”

In summary, GSP expiration reduces American jobs, makes pay/benefits at existing jobs worse, makes China more competitive, and raises costs for American manufacturers (even for products not available in the United States). Expiration impacts snowball over time, so Congress should renew GSP – and refund tariffs paid – as soon as possible.

If you’re a company impacted by GSP expiration, please answer our very short survey on GSP expiration impacts to date (the source for all of the above examples). To further 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

One California small business with about 20 employees canceled plans to hire two new workers in January. Longer-term investments that could add 10-15 production jobs and 3-4 more engineers also are on hold. Here, the company’s president describes how he would immediately hire new workers if GSP is renewed, but expansions depend on how it is renewed.

A critical point: the uncertainty created by Congress prevents the types of investments and American job creation that Congress (says it) supports. While expiration means no jobs, and a 1-2 year renewal would mean 2 jobs, a 5+ year renewal could lead to 15-20 skilled manufacturing and engineering jobs. Yet for the last 3 months Congress has chosen the “no jobs” option.

Another important point: all of the company’s GSP imports are used to manufacture other products in the United States. Due to GSP expiration, the company has raised its’ prices 10-15% depending, meaning other American manufacturers are now less competitive in selling in the United States and global markets.

With each passing day adding millions of dollars in new costs, it is past time for Congress to help American companies and workers by renewing GSP.

No similar linear diaphragm pumps are manufactured in the United States, though competitors in China often try to copy Hiblows design and sell for lower prices. Hiblow’s operations also exemplify GSP’s original development goals: workers at the Philippines factory receive competitive wages, bonuses and family outings throughout the year, and private health insurance benefits. GSP is one tool that helps Hiblow workers in the United States and the Philippines stay competitive in the global market.

GSP benefits have helped Hiblow mitigate Covid-19 impacts, particularly a 500% increase in freight costs. Ocean shipping delays meant Hiblow had to use air freight to get its product American manufacturing customs in time.

If GSP expires, Hiblow will need to recoup $400,000 “from somewhere.” That is likely less money spent with local vendors, for conferences, for marketing and advertising materials and – most importantly for policymakers – by freezing any new hires. That is bad news at a time when there are 10 million fewer American jobs than than there were earlier this year.

Watch Hiblow President Tim Smith explain how “renewing GSP is imperative to us to grow our business and hire more people in 2021 and beyond.”

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

For many years, TRI’s GSP savings funded multiple full-time salaries. Despite loss of GSP for products imported from India and Turkey, GSP “still saves our company the equivalent of more than a full-time employee’s annual salary.”

Watch TRI Executive Vice President and CFO Jeff Wright explain how “maintaining full employment, full wages, and employee benefits is our top priority as is supporting our US customers who are trying to do the same for their American workers” – and how GSP renewal would help them do it.

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

GSP eliminates $25,000 to $30,000 in tariffs annually on panels designed in the United States and manufactured in Thailand. The savings help Vtronix keep costs low for its customers — SME American manufacturers — who in turn are better able to compete against large, multinational producers.

Watch founder Anil Gowda explain how “this year, especially with Covid…renewing GSP would be a great benefit for us.”

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

PolySource is just one of the GSP importers sharing how GSP allows its businesses and workers to thrive on our Company Profiles page.

• 2013 INC 5000 member
• 2013 state “manufacturer of the year” nominee
• 2014 INC 5000 member (albeit a much lower rank)
• 2014 county chamber “small business of the year” winner
• 2015 state “manufacturer of the year” nominee

Everything sounds great, right? Well despite these successes, this small manufacturer could have grown so much more if not burdened by $15,000 to $20,000 per month in higher taxes because of GSP expiration. In fact:

• 2014 ended 4 straight years of double-digit employment growth rates
• plans to break ground on a (further) expansion in 2015 were put on hold indefinitely
• stagnant revenue will keep the company off of the 2015 INC 5000 list

We often publish data about the tax costs of GSP expiration, but that’s only a small part of the story. GSP expiration prevents good – and even great – companies from reaching their full potential.

Our survey last year showed this as well, where 44 percent of respondents reported hiring freezes because of GSP expiration. The impacts were particularly hard on small businesses with less than 25 employees. This includes McGuire Manufacturing in Cheshire, Connecticut, a small manufacturer with 20 employees. As McGuire President Mike McRoberts said at the time:

“As a result of GSP expiration, we have allowed attrition to reduce our workforce by two fulltime positions. I’d like to replace them, and would do so immediately if Congress renews GSP retroactively, but I can’t right now.”

That same survey showed 40 percent of companies reporting capital expenditure delays, which have a ripple effect on other local businesses. Small businesses like B&C Technologies, which has 28 employees in Panama City, Florida, are among the hit hardest once again.

B&C imports industrial and commercial laundry equipment from Thailand under GSP. In March 2014, it bought a building in Panama City Beach with a plan to begin manufacturing in the United States by April 2015.

According to B&C President Bengt Bruce, that goal now has slipped to July 2015 – at the earliest – and plans have been scaled back “quite a bit.”

Instead of a complete overhaul of the building (e.g., new floors, walls, re-designed space) that would have generated significant work for local contractors, B&C is doing only what is necessary to move into the new office space.

None of these impacts show up in the trade data, but they are the practical result of Congress’ continued failure to renew GSP.

NAM highlighted the impact on Momentive, a specialty chemicals and materials producer with a presence in 21 states, including manufacturing facilities in New York, Ohio, West Virginia, Florida, North Carolina, Oregon, Indiana and California. Roger McCrary, Momentive’s Vice President for Global Trade Management, noted the trade-offs that companies must make when Congress fails to renew GSP:

“Our ability to remain an innovative, cutting-edge American company requires access to affordable raw materials. With the increase in tariffs resulting from GSP’s expiration, we need to cut from other parts of our budget, such as R&D. That has an impact on our bottom line and future products.”

These trade-offs are faced by all companies, not just manufacturers. Some companies cut R&D. Others reduce purchases (and limit future profit potential), while others still must lay off workers. In each of these cases, though, the result is clear: even a temporary GSP expiration can have a lasting impact.

While fretting over the potential tariffs, they gave some of the back-story: the company supplies various chemical intermediates to U.S. chemical manufacturers.  This small business helps American manufacturers keep their raw material costs down by importing certainly specialty chemicals from India under GSP – typically saving tariffs of 6.5 percent.

The company spent three years trying to win a piece of new business with one of the largest U.S. chemical manufacturers.  This involved extensive testing by chemists for both the U.S. supplier and its potential customer and multiple trips to India for further tests.  After three years (!)  the two sides reached a win-win agreement: the large U.S. manufacturer gained access to a key raw material at a good price and small U.S. specialty supplier had a new, big customer.

Yet small profit margins, high tariffs, a long-term contract, and potential GSP expiration threaten the deal.  Only two shipments have arrived to date, but their profits didn’t even cover the costs associated with winning the business.  Prices are already locked in for future shipments, so the specialty supplier will be forced to absorb the costs if GSP expires and the tariffs on Indian chemicals revert back to 6.5 percent.

So what’s the payoff for three years of hard work? GSP expiration may cause the small business that landed a major deal to lose money on each shipment.