Select Committee Members Push W&M to Renew GSP

Members of the Select Committee on China led a letter from 66 House members to the leaders of the House Ways and Means Committee, complaining that the expiration of the Generalized System of Preferences benefits program has benefited China and led importers who had capitalized on GSP to return to China.

"American companies that reduced imports from China from 2018-2020 in response to Section 301 tariffs -- the very action Congress seeks to encourage -- have borne much of the GSP expiration costs," they wrote in a letter made public July 12. "These U.S. importers have had to choose between raising prices on consumers or finding cheaper places to source products and industrial inputs, including returning to China. This undesirable trend will continue to worsen as long as GSP remains expired."

The letter was led by the Select Committee's Rep. Neal Dunn, R-Fla., and Rep. Jake Auchincloss, D-Mass., and was signed by 33 other Republicans and 31 other Democrats, including the chair and top Democrat of the Select Committee. No member of the Ways and Means Committee signed on.

The letter noted that although GSP has been defunct since the end of 2020, its last authorization passed the House 400-2. The tariff breaks under GSP average 5%, but often are 20%, and, given that the GSP list and the Section 301 list overlap, "GSP can provide tariff advantages as high as 45 percent for key products compared to China," they wrote.

They said that lower tariffs for manufacturers helps them be competitive, and that "GSP benefits for consumer goods help American families stretch their paychecks further. Renewal also would demonstrate U.S. trade leadership to GSP partner countries and allies around the world. Legislation to renew GSP, including smart changes to make GSP countries more viable alternatives to China, would enjoy broad, bipartisan support. We look forward to working with you to pass such legislation as quickly as possible."

Coalition for GSP Executive Director Dan Anthony hailed the letter, saying, "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."

He also shared quotes from GSP recipients, such as Laurie Sebestyen, co-owner of Mike's Curry Love in Boise, Idaho. "We lost our two largest customers because funds needed to promote our product and maintain inventories were instead used to pay tariffs," she said. "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.”