From January-July 2021, American companies paid at least $565 million in extra taxes as a result of GSP expiration. Imports into 36 states (plus Puerto Rico) paid at least $1 million in tariffs from January-July 2021 due to GSP expiration. The map below shows estimated tariffs paid for products claiming GSP by state.

July was the most expensive month of GSP expiration yet for 12 states: Georgia, Hawaii, Iowa, Kansas, New Hampshire, Rhode Island, South Carolina, Utah, Vermont, Virginia, Washington, and Wisconsin. In Rhode Island, tariffs costs in July were more than the previously three months combined. Tantalum metals used primarily to manufacture electronic components from Kazakhstan and Christmas lights from Cambodia – the two products driving the Rhode Island increase – show the diverse impacts of GSP expiration.

GSP expiration costs have a direct, negative impact on American workers:

• “GSP can be the difference between making a profit or a loss and without profits we obviously can’t increase wages and benefits” says Charlie Smith of BROSCO, a 4th generation, family-owned millwork distributor in Massachusetts and Maine. “Continued losses put all of our 360 workers’ jobs and livelihoods at risk.”
  
• “We are having challenges staying competitive“ says Ajay Kochhar of A&S Distributors in Salida, California. The 7-worker company has paid over $60,000 in extra taxes on food products from Fiji because of GSP expiration. “We can’t hire and give employees full benefits as this is a major increase.”
  
• “The tariffs when added to the rapidly escalating costs of containers have been devastating” says Sandra Colyer of Lily Koo LLC in Jamestown, North Carolina. “Employees laid off due to Covid are slowly being brought back, but return to work would occur more quickly if money was not being spent on tariffs.”

It is critical that Congress renew GSP – with refunds for tariffs paid – as soon as possible. We strongly encourage GSP importers hurt by expiration to answer our new survey here. As always, no company-specific details will be published without permission.

In the first five months of expiration, American companies paid at least $397 million in extra taxes as a result of GSP expiration. Companies in 32 states paid at least $1 million in tariffs from January-May 2021 due to GSP expiration. The map below shows estimated tariffs for products claiming GSP paid by state in that period.

May was the most expensive month of GSP expiration yet both nationally and for 19 states: Alabama, Colorado, Delaware, Georgia, Hawaii, Illinois, Kansas, Massachusetts, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Pennsylvania, South Carolina, and Virginia. In three states – Colorado, Kansas, and New Mexico – tariffs paid in May were at least double any of the previous four months.

While many believe the United States has low tariffs, Colorado companies have paid extra tariffs averaging 11.7% due to GSP expiration. Companies in Maine, Montana, New Hampshire, Utah, and Wisconsin have all paid extra tariffs average 7-10%.

The data on tariffs paid is a conservative estimate, and the real figure likely is higher. Why? Estimates only capture products that continued to claim GSP despite expiration. Yet imports of many products that traditionally get GSP have not claimed it in 2021. 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.

It is critical that Congress renew GSP – with refunds for tariffs paid – as soon as possible. Companies that want to help the Coalition for GSP educate policymakers on who is hurt by expiration (and how) should:

• 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

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

• In Florida, roses faced more than $1.8 million in new tariffs due to GSP expiration in the run-up to Valentine’s Day.
• In New York, gold jewelry faced more than $1 million in new tariffs.
• In Louisiana, over $600,000 in tariffs were paid on steel-making materials (likely by a company around the Port of New Orleans for distribution throughout the country).
• In Massachusetts, over $200,000 in tariffs were paid on leather sports gloves.
• In Pennsylvania over $160,000 were paid for rubber gloves. They were also the top products for tariffs faced in Connecticut, Mississippi, and Minnesota. Notably, while GSP countries face new tariffs, identical products from China continue to receive a Section 301 tariff waiver for public health reasons.

The $70 million in 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 for numerous products GSP claims fell dramatically while imports continued or even grew. For example, more than $11 million of road wheels from Thailand (88%) were imported in January that didn’t claim GSP. Just 0.4% of those same imports didn’t claim GSP in January 2020. Camshafts and gelatin from Brazil, guitars from Indonesia, and bicycles from Cambodia similarly saw large values of unclaimed GSP imports in January 2021 when nearly all such imports claimed GSP in January 2020.

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

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.

The top states by GSP savings have been fairly consistent over the years. California accounts for more than a quarter of GSP savings – about as much as the next 4 states (Florida, New York, Texas, New Jersey) combined. Washington and Tennessee have moved into the top 10 states in 2020, replacing Pennsylvania and North Carolina.

Savings are down sharply, from $555 million in 2019 to $407 million in 2020. The map below shows the widespread declines, with the Mountain West being a notable exception. Washington, Idaho, Wyoming, Utah, Colorado, and Arizona form a string of growth states from the Canadian to Mexican borders. Colorado’s savings increased over 150% from 2019, largely driven by a jump in backpack imports. Massachusetts is the only other state where GSP savings are up in the first half of 2020.

Savings declined by over 40% in more than 20 states, including a whopping 78% in Vermont. GSP savings also declined by 67% in Montana and Oklahoma, 63% in North Dakota, 61% in Michigan, 60% in Minnesota, and 52% in West Virginia.

Declines are NOT due to Covid-19. American companies have paid up to $183 million in extra tariffs in 2020 due to GSP suspensions for India, Turkey, and Thailand. In the first half of 2019, tariffs paid due to suspensions (India and Turkey only) were about $35 million. Add those potential savings to actual savings in both years, and the first half totals were nearly identical ($590 million) in spite of Covid-19-related declines. Our next post will dig into state-by-state costs in 2020 associated with the suspensions.

• Employ anywhere from 1 to 30,000 US employees. Small businesses dominate, with about 2/3 of companies reporting 12 or fewer workers.
• Saved anywhere from $5,000 to $3 million because of GSP in 2017, and bigger company ≠ bigger savings. The top “saver” was an SME; while 3 of the top 6  were among those with 12 or fewer workers.
• Are headquartered in 17 states and 39 different congressional districts. New supporters come from Massachusetts and Florida and Southern California and Washington State – and everywhere in between.

Here are some of the companies that granted permission to share the details of their GSP use:

• Lawrence & Co. in New Bedford, Massachusetts has 3 employees. GSP saved it $6,000 in 2017 on imports of mica products and leather goods from India.
• RV Industries in Buford, Georgia has 30 employees and saved $200,000 in 2017 on imports of coconut products from Thailand and the Philippines. RV Industries also exports to both Canada and Mexico.
• Miami Chemical in Miami, Florida is among the small business with big GSP savings. GSP saved the 12-person company about $1 million on imports of chemicals from India, Thailand, and Turkey.
• Pioneer Square Brands‘ 110 employees makes it among the larger new supporter list companies. The Seattle, Washington-based company saved $250,000 on imports of educational accessories from Cambodia.
• Colorado Angler Supply in Aurora, Colorado has 6 employees and saved $5,000 in 2017 on imports of fishing tools and accessories from India. It also exports to Canada and South America.

It’s not just new companies: the International Bottled Water Association and the Society of American Florists both joined the supporter list this month as well.

In short, GSP supporters are as diverse as the products they import. It might be hard to find something that ties these 7 organizations together beyond their support for GSP renewal, which may help explain bipartisan support in Congress too.

But it’s hard to pass any legislation these days, so we’re always looking for new examples of how GSP benefits companies and workers throughout the United States. If your organization benefits from GSP and is not yet on the free supporter list, please take a moment to add it here. We also have an open-ended survey where companies can share specific impacts of GSP expiration here.

*** Tariffs on GSP imports are scheduled to go up on January 1. By the time that feels “close,” it may be too late to make a difference in Congress. So if you import under GSP and don’t see your organization here, please add it here today. ***

The companies are based in 11 different states and most are small businesses (Panasonic North America certainly is not). Their imports are as varied as their locations: Engineered Components Company imports cap screws from Thailand; Galaxy Sports imports gloves from Indonesia; Global Chemcorp imports pigments and dyes from India, and Sugarpod Naturals imports dietary supplements from the Philippines.

Two companies – B&C Technologies and Fab-Line Machinery – are among those featured on our Company Profiles page.

The next potential GSP expiration is less than 9 months away. If you import under GSP, be sure to join our free GSP Supporter List so we can continue making the case for GSP renewal well in advance of the pending expiration date.

GSP Supporter List companies added the week of April 10, 2017:

• Andre Prost, Inc. in Old Saybrook, Connecticut
• B&C Technologies LLC in Panama City Beach, Florida
• Bolcof Port Polyers / Calsak Plastics in Azusa, California
• Engineered Components Company in Elgin, Illinois
• Fab-Line Machinery, LLC in Nashville, Tennessee
• Galaxy SPorts, Inc. in South Bend, Indiana
• Global Chemcorp, LLC in Charlotte, North Carolina
• Karran in Vincennes, Indiana
• Organik Kimya US, Inc. in Burlington, Massachusetts
• Panasonic Corporation of North American in Newark, New Jersey
• Sugarpod Naturals in Hillsboro, Oregon
• TRI-K Industries Inc. in Denville, New Jersey
• YGI Group in New York, New York
• Zhong Ya Chemical (USA) Ltd. in Edison, New Jersey

The companies are based in 9 different states and all small businesses. In fact, all have 40 or fewer employees and the typical one has 15 workers.

None of the companies reported eye-popping GSP savings – generally $50,000 or less in 2016 – but those savings are significant for small businesses like dZi Handmade. dZi has 10 employees and saved about $20,000 last year on imports of jewelry, holiday and religious items, incense, wind chimes, and toys from India and Nepal.

Despite their small size, companies are generally both importers and exporters. For example, NOVICA imports from Brazil, Ghana, India, Indonesia, and Thailand under GSP while exporting from the United States to Australia, Canada, France, Germany, Hong Kong, Mexico, New Zealand, Singapore, and the UK. Collectively the new supporter list companies reported exporting to 16 countries, with Canada being the most common export destination.

The next potential GSP expiration is less than 9 months away. If you import under GSP, be sure to join our free GSP Supporter List so we can continue making the case for GSP renewal well in advance of the pending expiration date.

GSP Supporter List companies added the week of April 3, 2017:

• A Simpler Time Inc. in Morrisville, North Carolina
• dZi Handmade in Easthampton, Massachusetts
• Eppco Enterprises Inc. in Cleveland, Ohio
• Ganesh Himal Trading LLC in Spokane, Washington
• Mendelson & Associates, Inc. in Los Angeles, California
• MG Golf in Irving, Texas
• Nova Gas Technologies, Inc. in North Charleston, South Carolina
• NOVICA in Santa Monica, California
• S.N.K. Enterprises, Inc. in St. Louis, Missouri
• TopFlite Manufacturing in Miami, Florida

In total, 75 GSP supporter list companies are headquartered in Districts with a new House Member. Nearly two-thirds of new House members have at least one GSP supporter list company based in their district, but some have many more:

• Representative Bonnie Watson Coleman (D, NJ-12) has eight constituent companies urging GSP renewal. These include Howard Berger Co. in Cranbury; Sinopack USA in East Brunswick; iTi Tropicals in Lawrenceville; Privi Organics and Oceanic Linkways in North Brunswick; Meck Pharmachem in Plainsboro, and Kas Rugs and GJ Chemical in Somerset. The companies import a range of products – from food ingredients to stone products to chemicals to carpets to janitorial equipment – from seven different countries under GSP. Combined, they save millions of dollars annually when GSP is in effect.
• Representative Bob Dold (R, IL-10) has seven constituent companies urging GSP renewal, including major manufacturers like Brunswick Corporation and Tenneco. Other GSP importers in the District include UTAS-USA in Des Plaines; BarrierSafe Solutions in Lake Forest; Aladdin Gold Creations in Northbrook; World Kitchen in Rosemont, and Deringer-Ney in Vernon Hills.
• Representative Mimi Walters (R, CA-45) has six constituent companies urging GSP renewal. These include Hampton Products International in Foothill Ranch (which joined the supporter list today); Felt Bicycles, Transpacific Foods, and American Electric Cord in Irvine; Estas USA Camshaft in Lake Forest, and Cipriani Harrison Valves in Rancho Santa Margarita.

These list goes on: Representative Norma Torres (D, CA-35) has five GSP supporter companies based in the District; Representative Barry Loudermilk (R, GA-11) has four; Representatives Ted Lieu (D, CA-33), Seth Moulton (D, MA-6), and Dave Trott (R, MI-11) have three each, and eight more (5 Rs, 3 Ds) have two constituent companies urging GSP renewal.

This bipartisan group of freshman lawmakers might not agree on much else, but they’d all do well to push for an immediate, retroactive GSP renewal. New constituents are counting on them.

Massachusetts companies imported an estimated $184 million under GSP in 2011, saving them on average 4.0%. Thailand was the most important source of GSP imports, accounting for about 36 percent of the tariff savings. Unwrought tantalum was Massachusetts’ top import under GSP in 2011 and would have faced average tariffs of 2.5% without GSP.

Yet GSP is set to expire on July 31, 2013, and companies could face tariffs higher tariffs starting on August 1 if Congress does not pass legislation renewing GSP. When GSP expired at the end of 2010, American companies paid nearly $2 million per day, every day, until Congress finally acted 11 months later!

This graphic shows just some of the negative impacts from the last GSP expiration. It also helps explain why more than 335 companies and associations – including at least 8 in Massachusetts – joined the 2011 GSP Supporter List urging renewal of the program when it last expired.

Are you a Massachusetts company that would be hurt by GSP expiration? If so, please take 30 seconds to let Congress know by adding your name to our free 2013 GSP Supporter List right now.