CalChamber Urges Renewal of Cost-Saving Trade Preference Program

Coalition-for-GSPThe California Chamber of Commerce has joined a nationwide coalition that is urging swift passage of legislation to renew the Generalized System of Preferences (GSP), which eliminates duties on thousands of products.

The Coalition for Generalized System of Preferences brings together more than 300 organizations and companies across the country — including CalChamber members.

They explained their support for the GSP in a June 19 letter to Chairman Ron Wyden (D-Oregon), Ranking Member Michael Crapo (R-Idaho), and members of the U.S. Senate Finance Committee.

Following introduction of the GSP Reform Act (H.R.7986) in the U.S. House Ways and Means Committee, there have been hearings in in the U.S. Senate Finance Committee with leadership making progress on legislation. Hopes are to finally approve reauthorization this summer.

The CalChamber has continued to push for congressional reauthorization of this U.S. trade program, which has saved companies billions of dollars in tariff costs on imported goods.

Because Congress failed to renew the GSP program before it expired on December 31, 2020, U.S. companies are paying more than $2 billion in added tariff costs.

Added Tariffs

For decades, the GSP program has received bipartisan support due to its track record of creating jobs in both developing countries and the United States. The program eliminates import taxes on nearly 5,000 designated products from about 120 emerging economies, opening the U.S. market to qualifying exports.

The typical beneficiary company employs about 20 people and GSP saves them between $100,000 and $200,000 in duties, which can be a big savings for a small business.

At the same time, GSP supports U.S. workers and manufacturers by reducing costs of imported inputs and equipment and helps American families stretch their paychecks by lowering the costs of consumer goods imported duty-free.

California Impact

California is one of the top economies in the world with a gross state product of approximately $3.9 trillion. In 2023, California exported $178.71 billion to 227 foreign markets.

Due to the expiration of the GSP program, California companies have paid more than double the tariff amount of any other state.

In 2020, California companies saved $238 million in tariffs thanks to the GSP program. California routinely is the greatest benefactor of the GSP program.

History of GSP

The GSP program 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.

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 production costs for these U.S. manufacturers, making them more competitive.

CalChamber Position

The CalChamber, recognizing that the Generalized System of Preferences has stimulated two-way trade with the United States and has contributed to the long-term economic development of some developing countries, supports annual extensions of the Generalized System of Preferences.

Staff Contact: Susanne T. Stirling

Susanne T. Stirling
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. See full bio.