On Monday, lawmakers in the U.S. House of Representatives proposed a bipartisan bill aimed at providing relief to U.S. importers who paid tariffs on goods that would have been eligible for preferential treatment under the Generalized System of Preferences (GSP), which expired on December 31, 2020. This bill would retroactively apply preferential treatment to products that entered the U.S. between Dec. 31, 2020, and Sept. 1, 2022, if they would have been eligible for benefits under GSP, while not reauthorizing the program. The legislation would apply to approximately 3,400 products from 120 developing countries, refunding an estimated $1.8 billion worth of GSP-related tariffs.

The Generalized System of Preferences (GSP) is a preference program that allows duty-free imports for certain products from beneficiaries, which are predominantly lower-income and developing countries. U.S. imports from China on GSP-eligible goods have increased by hundreds of millions of dollars since the program’s expiration – imports of sports and duffle bags have increased by $50 million, trucks and suitcase materials have increased by $200 million, and air conditioner parts have increased by $600 million. Supporters of the new legislation argue that both the GSP program and the Miscellaneous Tariff Bill (MTB’s) incentivize U.S. trade investment outside of China and aid American companies in attaining component parts and other items free of duty if they are not readily available in the US. These signature trade items currently contribute to the inflation problem and their renewal would have a profound positive impact on the US economy.

On Tuesday, representatives from more than 60 major companies, including Target, Home Depot, and Samsonite were in Washington to urge Congress to consider the proposed legislation. Supporters of the bill claim that it will discourage imports from China while benefitting other developing economies throughout the world, being most helpful to companies that rely on specialized commodities from countries such as Indonesia, Thailand, and Brazil. House Oversight Committee member Rep. Debbie Wasserman Schultz (D-FL), who proposed the bill alongside fellow Florida Reps. Mario Diaz-Balart (R) and Darren Soto (D), highlighted in an email statement that GSP’s expiration has “caused our businesses to pay roughly $2 billion in excess tariffs, harming companies and workers in all 50 states,” adding that “it’s cost over $178 million in my home state of Florida alone, and small businesses were hit the hardest. I look forward to continuing to work together toward our shared goal of GSP reauthorization and to truly helping American businesses not just survive, but thrive.”

Efforts to renew GSP and MTB’s have failed to date – both the House and the Senate passed bills earlier this year that included the renewal of GSP and MTB’s, along with new eligibility requirements, but conferees tasked earlier this year to finalize a compromise China-focused competition bill failed to do so and the trade titles from both were not reconciled. Supporters of the bill have said that they hope Congress will act before the end of the year to renew GSP – possibly after the upcoming midterm elections in November. Dan Anthony, vice president of the Coalition for GSP, stated that “while we continue to seek a long-term GSP reauthorization after the November elections, a limited bill to refund GSP tariffs paid to date is the absolute floor for what Congress should pass this year.”