The Generalized System of Preferences (GSP), a long-standing U.S. trade preference program, has recently become a topic of interest in Congressional hearings. The expiration of the program at the end of 2020 has affected various industries, including the RV sector, the RV Industry Association (RVIA) noted in a News & Insights report.
GSP Expiration: A Blow to the RV Sector
The expiration of the GSP has forced U.S. companies, such as RV manufacturers and suppliers, to shoulder increased tariff costs during an already challenging time of inflation and rising prices. This development has brought the program to the forefront of political conversations.
The RV Industry Association has been an advocate for the GSP, particularly in 2019 when they successfully petitioned for a redesignation of specific lauan plywood from Indonesia. This move saved the industry nearly $1.5 million per month by eliminating the previously imposed eight percent tariff. However, the expiration of GSP has caused the industry to pay this tariff once again.
Congress Takes Notice: Hearings on GSP
In late March, both the House Ways and Means Committee and Senate Finance Committee held hearings with U.S. Trade Representative Katherine Tai.
Various industries impacted by the GSP expiration urged members of Congress to raise the issue during these hearings. Ambassador Tai expressed support for the reauthorization of the program and a willingness to work with Congress toward achieving it this year, something the RVIA was delighted in hearing.
A Key Argument for GSP Renewal: Reducing Reliance on China
Senator Bob Menendez (D-NJ) highlighted the importance of renewing the GSP during the Senate hearing, as it could help reduce reliance on China by making it more cost-effective to import from low- and middle-income countries.
Ambassador Tai concurred, noting that GSP is a fundamental part of U.S. trade and development programs focused on fostering economic development with partner countries.
In the House Ways and Means hearing, Representatives Vern Buchanan (R-FL-16), Lloyd Smucker (R-PA-11), Carol Miller (R-WV-1), Blake Moore (R-UT-1), and Jimmy Panetta (D-CA-19) questioned Ambassador Tai about the GSP renewal and emphasized its importance to American businesses. They echoed the program’s role in reducing reliance on China and promoting economic development with trading partners.
Ambassador Tai’s Commitment to Reauthorization
Responding to Representative Buchanan’s query about the reauthorization delay, Ambassador Tai reiterated her support for the program and pledged to work with Congress to ensure its renewal. This statement has instilled optimism in various industries, including the RV sector.
“We are optimistic to hear Ambassador Tai go on the record supporting a timely renewal of the program and pleased that so many members of Congress took this opportunity to raise the issue directly with the Ambassador,” the association said in the News & Insights report published April 4.
The Push for Reauthorization Continues
Given Ambassador Tai’s support for GSP renewal and the concerns raised by Congress members, the RVIA continues to engage with Congressional representatives to advocate for reauthorization this year.
For more information, contact Samantha Rocci at [email protected].