The China/Section 301 diversion is real. So far in 2021, GSP imports are up 12% for products where Chinese imports face Section 301 tariffs but down 7% for products where Chinese imports don’t face any new Section 301 tariffs. It is impossible to know how much more GSP imports might be up (or Chinese imports down) if GSP expiration hadn’t forced American companies to pay tariffs for those products too. We wrote about how GSP renewal must be a part of any “China trade” conversation here.

Imports into 38 states (plus Puerto Rico) paid at least $1 million in tariffs due to GSP expiration. The map below shows estimated tariffs paid for products claiming GSP by state.

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.

From January-August 2021, American companies paid at least $666 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.

August was the most expensive month of GSP expiration yet both nationally and for 15 states: Alabama, Delaware, Georgia, Hawaii, Idaho, Maryland, Minnesota, Montana, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Texas, and Washington. Tariffs paid on imports into Minnesota were 84% higher than any previous month. For Pennsylvania and Georgia, tariffs paid were 53% and 27% higher than any previous month, respectively.

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 six months of expiration, American companies paid at least $480 million in extra taxes as a result of GSP expiration. Companies in 34 states (plus Puerto Rico) paid at least $1 million in tariffs from January-June 2021 due to GSP expiration. The map below shows estimated tariffs for products claiming GSP paid by state in that period.

June was the most expensive month of GSP expiration yet for 12 states: Alabama, Colorado, Delaware, Iowa, Maine, Maryland, Minnesota, New Hampshire, Ohio, Oklahoma, Rhode Island, and South Carolina. For Alabama, Colorado, and Delaware, each new month has been the most expensive one yet (e.g., June was more than May, which was more than April, which was more than March…).

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. 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. Companies that want to help the Coalition for GSP educate policymakers on the importance of GSP should also join the Coalition for GSP and/or add their name to the free GSP supporter list.

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

While California is far-and-away the #1 state for GSP savings, Texas edges it out for most tariffs paid this year due to country suspensions – companies in each state have paid up to $18.6 million in extra taxes. Companies in New Jersey are not far behind, having paid up to $18.2 million in extra taxes due to country suspensions.

The costs are driven by different Trump administration actions. Texas is the top state in tariffs paid due to India’s suspension, New Jersey has paid the most due to Turkey’s suspension, and California has paid the most due to Thailand’s partial suspension. The table at the very bottom shows tariffs paid, by country suspension and total, for all states.

Including the tariffs paid due to suspensions, both in 2019 and 2020, drastically changes the state savings trends. Instead of the sea of dark red states with declines of over 20% shown yesterday (and below, right), only a 5 states are likely to have seen such declines without country suspensions. Similarly, there would be savings growth for states in every region of the country instead of limited to the Mountain West.

Swings states, including big states not traditionally in play in Presidential or Senate elections, account for some of the biggest dollar swings. Without country suspensions:

• Texas companies’ savings would’ve increased up to $2.4 million instead of declining by $12.7 million, a $15+ million swing
• Georgia companies’ savings would’ve increased up to $3.1 million instead of declining by $5.8 million, nearly a $9 million swing

In more traditional swings states, maintaining full GSP eligibility for all countries would have mitigated declines likely associated with the Covid-19 pandemic. For example:

• Florida companies’ savings would’ve declined by $4.3 million instead of $12.6 million, an $8+ million swing
• Pennsylvania companies’ savings would’ve declined by $350,000 instead of $8.2 million, nearly an $8 million swing
• Michigan companies’ savings would’ve declined by $3.2 million instead of $8.2 million, an $5+ million swing

Swings were even bigger on a percentage basis in states where GSP savings are traditionally lower:

• Instead of declining by 47%, New Mexico companies’ savings would’ve increased by up to 161%, a 200+ percentage point swing
• Instead of declining by 60%, Minnesota companies’ savings would’ve increased by up to 17%, nearly an 80 percentage point swing

These are real costs to real American companies and workers – many in places that will be hotly contested in the 2020 elections – on top of the challenges related to the Covid-19 pandemic and economic fallout. In addition to congressional reauthorization of GSP, administration decisions to restore lost GSP eligibility would provide significant benefits to struggling American companies.

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.

Some states such as Georgia and North Carolina saw much larger increases in GSP imports and savings compared to the previous year, as shown in the graphic below.

GSP saved Georgia companies $3.9 million in December, up $1.3 million (49 percent) compared to one year earlier. Metal products from Brazil, luggage from Thailand,  and chemicals from India contributed the most to Georgia’s GSP savings increases.

GSP saved North Carolina companies $2.0 million in December, up $577,000 (39 percent) compared to one year earlier. Chemicals from the Philippines, furniture fittings from Thailand, and wood products from Indonesia contributed most to North Carolina’s GSP increases.

In addition to Georgia and North Carolina, companies in 26 other states saw GSP savings increase by at least 20 percent, including: California, Connecticut, Florida, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, and Wyoming.

Savings on GSP imports from Indonesia increased by 31 percent compared to December of last year. California companies’ alone imported $4.6 million in silver jewelry under GSP in December. GSP eliminated about $1.5 million in import taxes on mangoes and guavas in December. About two-thirds of those savings were on imports into New Jersey.

*** REMINDER: GSP EXPIRED EFFECTIVE JANUARY 1.***

The House passed GSP renewal legislation in February, but the Senate must pass legislation for GSP benefits to resume. Please use our Contact Congress tool to write your Senators about GSP renewal; answer our brief survey on how GSP expiration impacts you, and/or sign up for the free GSP supporter list to show the broad support for renewal.

The map below shows the overall value of year-to-date 2017 GSP imports (in blue) and tax savings (in red) by state.

This map will be updated monthly as new trade data become available and the most up-to-date version will be available at all times on our Graphics page. These posts highlight select states, products, and countries contributing to increases in January, February, and March.

REMINDER: GSP EXPIRES AT THE END OF 2017. Click here to learn about ways to take action and support GSP renewal this year.

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