Led by Representatives Neal Dunn (R-FL) and Jake Auchincloss (D-MA), both members of the House Select Committee of the CCP, the letter’s large and diverse group of signers demonstrates strong support for a renewed (and improved) GSP program across the political spectrum. Letter signers include:

• 34 Republicans and 32 Democrats from 30 different states
• Nearly all members of the Select Committee on the CCP, including Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL)
• The chair and/or ranking member from numerous other House committees

The letter highlights the critical role GSP can play in helping U.S. companies diversify supply chains by providing “tariff advantages as high as 45 percent for key products compared to China.” It also notes that “China is benefiting significantly from GSP expiration, which has led to over $2.5 billion in extra tariffs on $45 billion in imports from China’s developing country competitors.”

The letter states that “Legislation to renew GSP, including smart changes to make GSP countries more viable alternatives to China, would enjoy broad, bipartisan support.” For example, more than 50 House Members signed a bipartisan letter supporting updates to GSP’s “competitive need limit” (CNL) rules in the last Congress. CNLs can terminate duty free treatment for a specific product if imports from a GSP country increase too much, which in turn can disincentivize shifting too much trade outside of China.

What they are saying:

“With the Chinese Communist Party becoming more aggressive each day, reducing America’s reliance on China is more critical than ever,” said Congressman Neal Dunn. “China benefits from the expiration of the GSP program, and our companies pay the price. We know GSP works. We know that it has bipartisan support. Legislation to renew the program is long overdue.”

“GSP supports a strong middle class,” said Congressman Jake Auchincloss. “Renewal of the GSP program would facilitate supply chain shifts out of China, spur investments in partner and allied countries, and strengthen American businesses.”

“Congress clearly wants American companies to buy less from China, but imposing billions of dollars in extra tariffs on other countries due to GSP expiration makes that much harder” said Dan Anthony, Executive Director of the Coalition for GSP. “We thank Congressmen Dunn, Auchincloss and the other signers for demonstrating the bipartisan support an ambitious GSP renewal bill would enjoy. GSP is a proven means for helping American companies and workers remain competitive while building diverse, resilient supply chains.”   

“We had an advantage from no duties on Indonesian jewelry from GSP, but since it has not been renewed some customers are canceling purchase orders and buying direct from China,” said George Nazarian, owner of small business Novita in Monrovia, California. “We’ve taken on a huge debt to pay the tariffs, and if GSP is not renewed soon we have no choice but to close our 40-year old family business.”

“We moved production from China to the Philippines because GSP tariff savings more than offset the higher unit costs,” said Matthew Cagle, owner of Rig’Em Right Outdoors, a family-owned business in Morehead City, North Carolina. “Now we pay higher prices plus added duties, so our costs are MUCH higher. With rising costs of supplies, warehousing, shipping and labor in the US too, we simply have no choice but to consider moving production back to China.”

“We lost our two largest customers because funds needed to promote our product and maintain inventories were instead used to pay tariffs,” said Laurie Sebestyen, co-owner of Mike’s Curry Love in Boise, Idaho. “The ripple effect is overwhelming and we’re on the verge of throwing in the towel. “We never imagined that GSP renewal could take so long.”  

“GSP expiration’s added 10% tariff on our goods from Thailand has forced us to source more from China, which continues to lead the world in low-cost production of ceramic mugs,” said Jan Reid, CEO of small business Xpres LLC in Winston-Salem, North Carolina. “Congress says they want companies to buy less from China, but without GSP the numbers just don’t work.”

“There is no question that the expiration of GSP has caused us to rethink our production outside of China,” said Lawrence Mikuta, Vice President of Sourcing & Production at HOBO Bags in Annapolis Junction, Maryland. “The GSP tariff savings are critical to offset the challenges working in those countries, such as longer development and lead times and higher minimum purchases, compared to China.”

“We had a slight increase in bike sales prices but not enough to cover the outrageous tariff rates,” reported Woombikes’ Jesse Rendon. “Given the current economic crises we are in, having to pay additional fees for tariffs is like putting salt on a wound.”

Founded in 2014, Woombikes already has grown to 60 employees. It was named to the Inc. 5000 fastest-growing private companies in 2019, 2020, and 2021. Yet millions of dollars in new tariffs hurt, and not just Woombikes. Coalition for GSP data shows over $24 million in tariffs paid on bicycles due to GSP expiration from January 2021-April 2022. Expiration costs are accelerating: year-to-date tariffs on bicycles (generally) are 163% higher in 2022 than 2021, and tariffs on children’s bikes specifically are 201% higher.

Congress can help by passing retroactive GSP renewal legislation ASAP. According to Rendon, “Having the $1.9M refunded will allow me to pay down my debt, as well as hire new employees to scale the company to support our current growth. We also will be able to offer more benefits like company matching for our new 401(k) plan and possibly bonuses for our employees.”

If you’re a GSP importer, please help by answering the survey/sharing your story here. No company-specific information is shared without permission (which Woombikes granted). Even if responses cannot be shared publicly, they help inform the Coalition for GSP’s conversations with policymakers about the importance of renewing GSP.

From January-September 2021, American companies paid at least $763 million in extra taxes as a result of GSP expiration. 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.

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.

However, GSP expired on January 1 and companies must now pay over $2.5 million per day in extra taxes. GSP expiration is causing immediate harm to American companies and workers. For example, a small business in New York recently reported:

Because GSP expired, we will have to let 3 employees go that were previously going to be brought from temporary to permanent with benefits. Two good paying electronics technician jobs we planned to add are now on hold as well. We are a smaller company and can’t afford $163,000 in expenses and still be able to expand. Prices will likely have to increase with risk of losing further business in a very tight market, with major competition from China.

Another company with about 200 employees across six states is paying over $80,000 per month in new tariffs, a figure that will rise to $130,000+ per month in March. It reported:

We can’t reduce orders until we design and create new products to replace the items we currently buy. We will have to pay the duties in the interim and have raised prices only where the market allows. Therefore, we will sustain a low margin and cut costs including pay to employees.

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:

• 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

Kouboo sells home decor products that are handmade from natural materials, such as rattan vines. Kouboo was started by Patrice and Joey Gerber with products sourced from the Philippines, and sourcing expanded to Indonesia and Myanmar. The handmade nature of the products provides significant employment opportunities in GSP countries, especially for women weavers in poor, rural areas.

As Kouboo has grown, GSP savings rose dramatically: from a few hundred dollars per month in 2013 to a few thousand dollars per week in 2020. So has the number of women artisans supported by Kouboo’s GSP imports into the United States.

In the first clip, Patrice explains how higher tariffs from GSP expiration, along with global shipping delays and the pandemic, combine to create the “perfect storm” for his business. While Kouboo converted one part-time worker into a full-time worker on January 1 (it’s first non-family member), the impact of higher tariffs plus higher shipping costs forced Kouboo to put plans for another full-time hire on hold.

In the second clip, Patrice provides information on how their products are manufactured, and how GSP/their products provide employment opportunities, especially to rural women. Since men’s agricultural income typically isn’t enough, the women’s income reduces pressure for children to work – improving access to education – as well as pressure to leave the rural areas for urban ones in search of jobs. The unique nature of the products, and limited alternative employment options in the villages, means lost GSP hurts many without even the possibility that someone else could gain.

Kouboo is a great example of how lost GSP hurts companies and workers in both the United States and developing countries. If you’re like Kouboo and harmed by GSP expiration, please add your name to our free GSP supporter list.

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 hundreds of thousands of dollars in tariffs annually on Cannon’s imports from Myanmar and Sri Lanka. The savings are passed along to Cannon’s customers, while helping those GSP countries “compete with giants like China.”

Watch CEO Frank Cannon explain how why its so important for Congress to renew GSP this year.

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.

Last week, the House passed GSP renewal legislation by a vote of 400-2. Though Senate procedural rules make a stand-alone vote in the Senate unlikely, the expected result would be similar. (The last Senate vote was 97-1.) Despite overwhelming support in the House and Senate – and Administration support for a 3-year renewal – American companies and workers continue to suffer while waiting for GSP renewal.

Take Montana Fly Company (MFC) in Columbia Falls, Montana, a town of about 5,000 people between Flathead Lake and Glacier National Park. MFC imports artificial fishing flies from Cambodia that face tariffs of 9% without GSP. High tariff rates mean high expiration costs for MFC, which generally saves between $10,000 and $20,000 per month from GSP. Adam Trina, MFC Founder and President, had this to say about the lapse in GSP benefits:

GSP expiration immediately impacted Montana Fly’s business. Fishing season is over and as a seasonal business, cash flows are extremely important. All resources must go toward daily operations and the building of inventory for the following season. We laid off 3 workers here in Montana, one from higher-level management and 2 mid-level employees. We also had to let go 8 people in Cambodia.

We need to find more areas to cut as our total duty in 2018 will be around $200,000. Due to the duration of the previous GSP expiration, we can’t afford to wait around hoping GSP renewal will get passed, so we have taken and are taking immediate action. 

For MFC, which had 27 US employees in late 2017, the layoffs represent about 10% of its workers. Large companies may have the financial resources to absorb tariff costs while waiting for Congress to act, but that is not feasible for small businesses like Montana Fly. It simply isn’t possible to come up with $10,000 to $20,000 a month without cutting back significantly in other places, such as as payroll.

The longer Congress waits to act, the more uncertainty and disruption it causes for companies and workers alike.

Is GSP expiration similarly impacting your company? If so, let us know how by completing this form. As always, no company-specific information will be published without explicit permission.