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.

When GSP expired, Leila’s Linens had to raise prices to cover the new tariffs costs. In addition to $175,000 in tariffs paid, Leila’s Linens lost an estimated $1.7 million in sales when major clients started sourcing directly from non-GSP countries. Lower volumes made it hard to service smaller clients, too. Leila’s Linens delayed all major expenditures, including new workers.

When GSP expire in 2013, Primetac was forced to raise prices to compensate for those new import taxes. This was no small increase, as the company paid about $1.5 million in new tariffs. The resulting sales drop forced Primetac to freeze hiring, slash benefits, and delay certain investment plans.

The retroactive renewal allowed Primetac to hire 2 new hires and institute a profit-sharing plan for employees. Benefits were not limited to Primetac’s staff: it also purchased a forklift from Crown Industries in Ohio and hired a local contractor to move ahead with a lighting upgrade in its warehouse.

Primetac’s Peter Feniello emailed the other day with another update. After reiterating all the past good allowed by renewal, he added:

The other side of the argument is what we are NOT doing presently due to GSP uncertainty. We are in need of 2 hires (one in administration here in NJ, another as a territory salesperson). We are not going to move on these until the dust settles and GSP renewal is in sight.

Once again, despite expiration itself being 6 months away, companies are starting to pull back on investments and hiring.

Our Primetac profile page has more details about the importance of continued GSP benefits to the company (also available as a one-page PDF here or below).

Sophia Foods was forced to lay off workers each of the last two times Congress allowed GSP to expire. In 2011, it laid off two workers when profits plummeted due to higher tariff costs. As detailed in the 2014 GSP expiration impact survey report (featuring owners Candace and Danny Abitbul on the cover), GSP expiration in 2013 forced Sophia Foods to lay off two employees (out of 7) and implement a hiring freeze. The company also put plans to purchase a warehouse and expand its space on hold until it was sure about the future of the business, which was so closely tied to GSP renewal.

As Candace has noted, the uncertainly associated with GSP renewal/expiration can create paralysis for small businesses:

Stability is the key here. The living in limbo was the worst part of the GSP non-renewal period. We couldn’t move forward, but hesitated to move backward too much without knowing what might happen. It felt like a huge part of our cash flow was being held hostage, and making sound business decisions became increasingly impossible as time wore on.

With GSP back in place, Sophia Foods was able to hire 2 workers to fill the positions eliminated during expiration – and then add 2 more new positions. It increased benefits for all employees and doubled its square footage by expanding into neighboring warehouse space.

Our Sophia Foods profile page has more details about the importance of continued GSP benefits to the company (also available as a one-page PDF here or below).

New tariffs from GSP expiration in 2013 put the company’s products at a disadvantage to Chinese mouldings, which typically account for 70+ percent of US imports. In total, Universal Arquati paid about $185,000 in extra taxes because of GSP expiration. The uncertainty regarding when, or even if, those taxes might be refunded led Universal Arquati to freeze all hiring and investments.

After 7 years of trials and tribulations, the start-up company reached break-even in 2013 and had grown to 20 employees. Then Congress allowed GSP to expire. As Thompson Traders’ President Fred Starr reported in January 2015:

“Due to our financial position and our inability to pass this charge onto our customers, we had to slow down growth, including hiring. We would be a different company today without this totally unanticipated tariff. We’ve reduced our payroll by eight people, a 40% reduction and will not be adding people, until we have a better government environment, including the renewing of GSP.”

Ultimately, Thompson Traders paid $220,000 in higher taxes during the two-year GSP expiration.

With GSP reinstated and tariffs refunded, the company reinvested all of the refunds back into the business. The company initiated a major new product line in a new market in 2015. Thompson Traders rolled out stocking programs with three of its biggest customers and initiated a program to try to manufacture in the United States.

Today, Thompson Traders has 25 employees – more than before GSP expired in 2013 (and double the 12-employee low hit during GSP expiration). Growing sales meant that GSP saved the company nearly as much ($180,000) in the first year of renewal and it did in the two years of expiration ($220,000).

Our Thompson Traders profile page has more details about the importance of continued GSP benefits to the company (also available as a one-page PDF here or below).

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

GSP expiration in 2013 led to an estimated $1.5 million in sales for Kona, which also paid nearly $600,000 in tariffs. As Kona’s Chairman Jacob Heilbron said in 2014:

“We’re unable to raise prices during our model year so the loss of profit is absorbed into our bottom line. We would like to hire new U.S. based personnel for our R&D/Product Development team but are waiting until GSP is renewed.”

While it took nearly a year to receive all of its tariff refunds, Kona took immediate steps to invest and hire new workers following GSP renewal in 2015. In the 30 days after GSP was renewed (but before benefits kicked back in), Kona hired a senior engineer and an industrial designer and had plans to hire a new product manager the next month. It has hired two more workers since and now has 32 employees, a nearly 20 percent increase over early 2015 before Congress renewed GSP.

Our Kona profile page has more details about the importance of continued GSP benefits to the company (also available as a one-page PDF here or below).

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

That comment was provided by Alex Livingston, President of Summit Specialty International in Alpharetta, Georgia, in response to our new GSP renewal impacts survey. The small business imports interior pine doors from Brazil that are used in new residential construction.

Like yesterday’s profile of Candace Abitbul from Sophia Foods, this is not the first time that Alex has provided information about the impacts of GSP on his company. Back in 2014, Alex reported that because of GSP expiration Summit could not “invest in either people or new equipment in a manner in which we would like,” while in early 2015 Alex reported that a retroactive GSP renewal would allow Summit “to hire another worker, give raises, and invest in additional inventory.”

GSP expiration cost Summit $198,218.03 in extra import taxes. Since GSP renewal, it has gone above and beyond previous predictions: Summit has hired two workers, gave its five employees raises, and started providing medical insurance.

These types of outcomes are possible when American companies can invest in their workers and operations instead of paying those “arbitrary and outdated tariffs.” As the scheduled GSP expiration approaches next year, importers must continue to remind Congress that they operate in the 21st – as opposed to the 19th – century economy.

Summit Specialty 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 and here and some preliminary survey response data here and here.