Businesses Seek Renewal of Trade Program to Avert Tax Increases, Job Losses

The California Chamber of Commerce is urging Congress to renew a longstanding trade program to prevent further tax increases and job losses for U.S. companies.

The Generalized System of Preferences (GSP) program eliminates import taxes on designated products from 130 developing countries around the world, but expired 16 months ago—the longest lapse in its nearly four decades of existence.

Job Creation Tool

GSP is an important tool for boosting economic growth and job creation. Many U.S. companies source raw materials and other inputs from GSP countries, and the duty-free treatment of these imports reduces the production costs of these U.S. manufacturers, making them more competitive.

Since GSP expired on July 31, 2013, U.S. companies, including many small businesses, have been forced to lay off workers, delay new hires, cut worker benefits, and cancel job-creating investments, as well as pay more than $850 million in increased taxes.

If the GSP program is not renewed before the end of the year, U.S. companies face a tax hike of more than $1 billion in the coming year.

Retroactive renewal of the program before the end of the year, as urged by CalChamber, the U.S. Chamber and other groups, would refund hundreds of millions of dollars in taxes paid to companies throughout the United States and support future growth.

Letter to Congress

CalChamber is among more than 600 companies and associations that joined the U.S. Chamber in sending a letter on November 17, 2014 to U.S. House and Senate leaders urging Congress to renew the GSP program before the end of the year.

The letter was sent to House Speaker John Boehner (R-Ohio), Democratic Leader Nancy Pelosi (D-California), Senate Majority Leader Harry Reid (D-Nevada) and Republican Leader Mitch McConnell (R-Kentucky).

Signatories on the letter represent businesses ranging in size from single-person sole proprietorships to some of the largest corporations in the world. Industries represented include apparel, footwear, food, consumer electronics, fashion jewelry and accessories, wood products, fisheries, retail, recreational vehicles, rug importers, sports and fitness, promotional products and travel goods.

The businesses are headquartered in 45 states and 282 congressional districts, the District of Columbia and Puerto Rico, and operate in every state and congressional district.

GSP was instituted on January 1, 1976, by the Trade Act of 1974 and was designed to promote economic growth in the developing world by providing preferential duty-free entry for products from designated beneficiary countries and territories.

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Staff Contact: Susanne Stirling

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Susanne T. Stirling, senior vice president, international affairs, has headed CalChamber international activities for more than four decades. She is an appointee of the U.S. Secretary of Commerce to the National Export Council, and serves on the U.S. Chamber of Commerce International Policy Committee, the California International Relations Foundation, and the Chile-California Council. Originally from Denmark, she studied at the University of Copenhagen and holds a B.A. in international relations from the University of the Pacific, where she served as a regent from 2012 to 2021. She earned an M.A. from the School of International Relations at the University of Southern California.