Today marks exactly 8 months since Congress allow GSP to expire. Yet while Congress delays, American companies and workers suffer. From last August until the end of January 2014 (the latest data available), GSP expiration cost American importers $336 million in higher taxes on a little more than $9 billion in imports.
So about $50 million in products claim GSP daily, but companies must pay the government nearly $2 million out of pocket to take possession of the goods. Every. Single. Day.
From August 1, 2013 to March 31, 2014? That works out to $444 million in higher taxes on $11.9 billion in imports. And it’ll be higher tomorrow.
Expiration causes numerous problems for importers. Attempts to offset the new costs frequently result in lost sales, as does the inability to keep as bring in as much inventory at the higher prices. Lower sales and less cash-on-hand force companies to make difficult decisions, often resulting in delayed investments, hiring freezes, benefits cuts, and even layoffs, as the preliminary results to our recent survey show. (Stay tuned, we’ll be releasing the final report based on 200+ responses soon.)
Even if Congress refunds taxes paid by renewing GSP retroactively, these other problems can’t be undone. Companies won’t get to re-bid a lost contracts and laid off workers won’t “retroactively” have jobs. Let’s hope Congress realizes that GSP expiration is no joking matter.