ViNtrol, Inc. manufactures a variety of valves, chokes, and actuators used primarily by the oil and gas industries. Its Oklahoma City facility has more than 71,000 square feet of workspace dedicated to product assembly, product testing, valve automation, valve enhancements and product upgrades.
ViNtrol supplements its Oklahoma production with “non-domestic valves” to maintain a “competitive edge.” The fact that its imports from India, the largest supplier of taps, cocks, and valves under GSP, were eligible for duty-free treatment could only help maintain that “edge.”
In 2010, duty-free imports from India accounted for nearly $60 million of the $125 million imported under GSP. Thailand was the 2nd largest supplier of valves at $34 million in 2010, but the products are slightly different: most of the Indian valves are made of iron or steel, whereas Thai valves are typically made of copper. All totaled, GSP benefits for valves waved tariffs of 2.0-5.6 percent and saved companies like ViNtrol more than $5.5 million in 2010. Perhaps more importantly, GSP expiration cost these companies nearly $500,000 in January 2011 alone.
It’s important to realize that GSP accounts for only a small share of total U.S. imports. GSP imports of $125 million might sound like a lot, but it’s only 2.2% of the $5.6 billion in valve imports last year. The top 10 sources of valve imports were (in order): China, Mexico, Japan, Germany, Canada, Italy, Taiwan, United Kingdom, Korea, and France – not a single GSP beneficiary. We imported more than 10x as much valves from China as we did under GSP from the 130 beneficiary countries.
We’ve made this point before, but it’s a good note to end on: while Members of Congress lament both the plight of American manufacturing and the trade deficit with China, they refuse to reauthorize a program that helps manufacturers and helps other countries (including the United States) compete with China. Crazy.