When imports enter the United States, they often face tariffs – taxes – collected by the U.S. government. Some of these tariffs are pretty high: 13.5% for inexpensive silver jewelry, 12.5% for flashlights, and 10.0% for coffee mugs. Everyday food products are often worse: 17.9% for nuts and seeds, 15.0% for Parmesan cheese, and 9.6% for pickles.
So it’s good news for American families when another U.S. government trade program exists to save them from paying these taxes. The Generalized System of Preferences (GSP) is such a trade program, eliminating tariffs imposed on certain products imported from about 130 developing countries around the world. GSP was created in the 1970s as part of an international effort to promote development through “trade, not aid.” Yet many of the benefits from the GSP program go straight to the wallet of American families. Last year, more than $5.5 billion in consumer goods entered the United States duty free under GSP.
And as a result, American families saved millions: $52 million for jewelry, $35 million for tires, $10 million on sugar, and $8 million each for rugs, candies, and fruits and nuts. While most families won’t think about GSP (or any U.S. trade program) while shopping for that new set of tires, rug, or jar of pickles, the program saves them real money.
This post is part of the Imports Work for America Week initiative, an effort by a number of organizations and individuals in the trade policy community to start talking about the benefits of imports for the U.S. economy. You can see our earlier blog post about the initiative here or visit the Imports Work website here.