Generalized System of Preferences (GSP) Expires December 31, 2017

Generalized System of Preferences (GSP) is a U.S. trade program designed to promote economic growth by providing preferential duty – free entry from designated beneficiary countries and territories.  The shipment must be sent directly from the beneficiary country to the U.S.

In 2016, American companies imported approximately $1.8 billion and saved approximately $75 million.

GSP tariff savings in 2016 by certain states were:

Illinois

2016 GSP Imports: $977 million

GSP Tariff Savings: $38 million

Average Tariff Rate: 3.9%

2017 Year-to-Date Savings: $22.4 million (through July)

 

Washington

2016 GSP Imports: $218 million

GSP Tariff Savings: $9.9 million

Average Tariff Rate: 4.5%

2017 Year-to-Date Savings: $5.5 million (through July)

 

Indiana

2016 GSP Imports: $418 million

GSP Tariff Savings: $13 million

Average Tariff Rate: 3.1%

2017 Year-to-Date Savings: $9.4 million (through July)

Types of products which are eligible for GSP are noted at:

https://ustr.gov/sites/default/files/files/gsp/GSP%20eligible%20products%20for%20all%20BDCs%20July%202017.pdf

GSP expires and must be renewed by Congress to remain in effect.  The latest GSP reauthorization expires on December 31, 2017.  If GSP expires, duty will come into effect on January 1, 2018.

If Congress does not renew GSP, importers will want to ensure costing is calculated to include the duty.

In the past, if GSP is not reauthorized prior to the expiration date importers of GSP eligible products may seek reimbursement for tariffs paid during the lapse in GSP coverage once the GSP is reinstated, but only if it is re-instated on a retroactive basis.

Ensure any imports are filed electronically to receive an automatic refund if Congress renews after January 1, 2018.

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