The Generalized System of Preferences (GSP), the longest-running U.S. trade preference program, ended at the end of 2020 due to congress allowing the expiration.
Congress’s failure to act resulted in substantial tariff costs for companies in the country, including RV manufacturers and suppliers, during a time when businesses are facing historic inflation and price increases, as per a News & Insights report by the RV Industry Association (RVIA).
Members of the RVIA understand the value of the GSP, like when the association successfully petitioned the Office of the United States Trade Representative in 2019.
The petition resulted in the redesignation of certain lauan plywood from Indonesia within tariff line 4412.31.4155, which we created for this purpose in 2018.
The RVIA could not have achieved success without the aid of its members and representatives in Congress who gave their support. The decision saved the industry almost $1.5 million per month since the plywood was no longer subject to the previous 8% tariff.
Unfortunately, since GSP expired, the industry has been forced to pay the 8% duty on lauan plywood and will continue to do so until the program is renewed.
STATE OF PLAY
The House of Congress and the Senate have included GSP renewal provisions in their massive China competition packages, such as the House’s COMPETES Act and Senate’s US Innovation and Competition Act.
The packages’ GSP renewal provisions had the CHIPS Act, a $52 billion to boost the production of semiconductors in the country.
The House package reauthorizes GSP through the end of 2024, two years less than the Senate version that the RVIA supports. Both bills add new program eligibility criteria to promote better governance and more attention to labor, environmental, and gender equity concerns. However, they differ in details, with the House legislation containing stricter criteria.
Currently, a 107-member Conference Committee is attempting to iron out the differences between the two pieces of legislation to arrive at a final bill that can be passed and sent to President Biden.
Due to the impending August recess, Congressional leaders are now talking about slimming down the package to just the CHIPS Act so that something would be passed before recess. While other broadly supported provisions may also be included, GSP is at risk of dropping out of the final package.
This package is the best bet for renewing the program, as when Congress returns in the fall, it will be with an eye toward the midterms—meaning it will be much harder if not impossible for both sides to reach a consensus.
The RVIA is calling for the support of RV businesses, especially companies relying on the GSP, to ensure the program’s renewal. They recommended reaching out to a member of Congress using RVACT.
Businesses interested in helping can also directly reach out to Samantha Rocci of RVIA’s Government Affairs team if they want to get more involved, like testifying if the chance presents itself or sending personalized letters to key leaders and decision-makers.