A bipartisan bill sponsored by a half-dozen House members from Florida -- though none on the Ways and Means Committee -- offers full refunds for tariffs paid for imports of goods that should have been covered by the Generalized System of Preferences benefits program. It also renews the program through the end of 2029.
Generalized System of Preferences (GSP)
The Generalized System of Preferences (GSP) is a trade preference program established by the Trade Act of 1974, which promoted economic development by eliminating duties on many products when they were imported from one of the 119 countries and territories designated as developing. The program expired in December 2020 and is pending renewal in Congress. Should Congress renew the program with a retroactive refund clause, CBP will refund duties for entries eligible for GSP. Under the GSP, goods that are entirely produced or manufactured in a beneficiary developing country may qualify for duty-free entry under GSP; all third-party materials must undergo a substantial transformation defined as at least 35% of the good’s value having been added in the beneficiary country. The goods must also be “imported directly” from the GSP eligible country.
The top Democrat on the House Ways and Means Committee, Rep. Richard Neal, D-Mass., said that he thinks a renewal of the Generalized System of Preferences benefits program can get through Congress in the next three months.
Allowing large numbers of electric vehicles from Chinese companies assembled in Mexico would be an "extinction event," warned the Alliance for American Manufacturing, a nonprofit co-founded by large domestic manufacturers and the United Steelworkers union.
House Ways and Means Trade Subcommittee Chairman Rep. Adrian Smith, R-Neb., said both retroactivity and the length of renewal are being debated as lawmakers try to reach consensus on re-authorizing the Generalized System of Preferences benefits program.
House Ways and Means Trade Subcommittee Chairman Adrian Smith, R-Neb., told an audience of trade professionals that while he appreciates the complaint that CBP cannot adequately screen packages that enter under de minimis, he thinks if de minimis is tightened, it could make enforcement even more difficult.
Rep. Darin LaHood, R-Ill., reintroduced a bill that would add digital trade policies to the eligibility criteria for the Generalized System of Preferences benefits program. He first introduced the bill in 2021 (see 2105100012).
An agreement between the chairmen of the House Ways and Means and the Senate Finance committees includes authorization for the administration to negotiate a fix to tax laws for foreign investment in Taiwan but doesn't include a renewal of the Generalized System of Preferences benefits program.
India and the U.S. should aim for "economically meaningful outcomes" from better customs and trade facilitation, supply chain linkages, trade in high-tech products and trade in critical minerals between the two countries, India's commerce minister and U.S. Trade Representative Katherine Tai said in a joint statement.
U.S. Chamber of Commerce CEO Suzanne Clark criticized the Biden administration for not only choosing to avoid tariff liberalizing trade negotiations, but also for walking away from long-time positions on digital trade provisions. Clark, who was speaking at a press conference after the Chamber's annual State of American Business event, declined to say whether a second Donald Trump administration or another term of Joe Biden would be worse on trade.
House Ways and Means Committee Trade Subcommittee Chairman Adrian Smith, R-Neb., said he thinks the chances are good for renewing the Generalized System of Preferences benefits program in 2024, due to bipartisan interest in the legislation. "A lot of members have examples from their district of why we need GSP." He added that a three-year lapse of the benefit program is "inexcusable."