GSP is Currently Set to Expire on December 31, 2020

Posted on Dec 9

Reminder: GSP is Currently Set to Expire on December 31, 2020

The Generalized System of Preferences (GSP) which provides duty-free treatment for imports of thousands of products from more than 100 developing nations will expire at the end of this month if Congress doesn’t pass legislation reauthorizing it beyond December 31. Failure to do so will lead to millions of dollars a day in new tariffs on American companies. Over 300 potentially affected companies and trade associations have sent a letter to Congress urging its renewal. The duty free treatment of these goods saved U.S. companies more than $1 Billion dollars in 2019, and has helped mitigate the impact of the downturned economy during the Covid-19 pandemic. If Congress fails to renew the program before December 31 it would make the current situation worse for these companies, and as the letters to Congress suggest could lead to layoffs, new hire freezes, wage cuts, etc.

For those of you that have been in the industry for a while, this issue will have a familiar ring to you. We seem to perform this dance every time GSP is up for renewal. One of the holdups this time around is that many in Congress want to overhaul the current system which has been in place for over 40 years. The question is will Congress move forward with the renewal in conjunction with the plan to reform the program or will it simply wait until the next Congress is in place in 2021? We’ll have to wait and see.

V. Alexander will continue to monitor this and provide updates as they become available.

Please contact your V. Alexander account team with any questions and follow us on our website for updates on this and other topics.

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