Washington, D.C. (April 18, 2024): The Generalized System of Preferences (GSP) tariff relief program got a boost when the House Ways & Means Committee passed legislation to renew the program through 2030 and offer retroactive relief from January 1, 2021 when the program lapsed. Companies would have 180 days to file for retroactive relief.
The bill would also ban China from being eligible for GSP benefits to help level the playing field. There are currently 119 GSP-eligible countries and industry products made in GSP countries; the bill includes labor and environmental provisions for eligibility. Democrats were disappointed an amendment to renew the Trade Adjustment Assistance (TAA) program to help displaced workers failed.
The Ways & Means Committee also approved legislation to ban any goods subject to Section 301 enforcement tariffs from using the de minimis exemption that allows shipments valued under $800 to ship direct to consumer. Shipments from China accounted for two-thirds of de minimis shipment 2018-2021 according to the U.S. International Trade Commission.
Chinese e-commerce giants Temu and Shein use de minimis to avoid CBP inspections for counterfeits, forced labor, and applicable tariffs. Use of the de minimis exemption soared from $40 million in 2012 to $67 billion in 2022 as bad actors abused the loophole to circumvent U.S. Customs to avoid Section 301 tariffs and bring in illegal products.
“SFIA applauds this action in the House of Representatives – it is a step in the right direction on GSP and reeling in the abuse of a tariff loophole,” said Bill Sells, SVP, Government & Public Affairs, SFIA. “GSP will make alternative sourcing options more attractive to SFIA members seeking to move out of China; tightening the use of the de minimis exemption will limit fakes and level the tariff playing field. We look forward to moving this bill through Congress.”
For more information or for questions, please contact Bill Sells, SVP, Government & Public Affairs, at [email protected].