Yesterday, the National Association of Manufacturers (NAM) wrote about the negative impact of GSP expiration on…not surprisingly…manufacturers. At the most basic level, because of GSP expiration “many manufacturers’ costs are higher and their competitiveness undermined.” This of course is a point we’ve made a number of times.
NAM highlighted the impact on Momentive, a specialty chemicals and materials producer with a presence in 21 states, including manufacturing facilities in New York, Ohio, West Virginia, Florida, North Carolina, Oregon, Indiana and California. Roger McCrary, Momentive’s Vice President for Global Trade Management, noted the trade-offs that companies must make when Congress fails to renew GSP:
“Our ability to remain an innovative, cutting-edge American company requires access to affordable raw materials. With the increase in tariffs resulting from GSP’s expiration, we need to cut from other parts of our budget, such as R&D. That has an impact on our bottom line and future products.”
These trade-offs are faced by all companies, not just manufacturers. Some companies cut R&D. Others reduce purchases (and limit future profit potential), while others still must lay off workers. In each of these cases, though, the result is clear: even a temporary GSP expiration can have a lasting impact.