Ways and Means to Consider 10-Year, Retroactive GSP Renewal, de Minimis Bill

The GSP bill, introduced April 15 by Rep. Adrian Smith, R-Neb., would apply starting with the most recent lapse of the program on Dec. 31, 2020, and renew the program for 10 years, ending Dec. 31, 2030. Requests to reliquidate entries for GSP during the lapse period would be due 180 days after the bill passes into law.

It would include several changes to competitive need limitations under the program. The bill would raise the threshold for removing goods from the program due to hitting CNLs to $500 million, with an automatic inflation hike of 2.5% annually. It also would increase the GSP de minimis waiver to $50 million, with a 2.5% annual inflation adjustment.

The bill also would modify GSP eligibility criteria, including by considering whether a country has allowed Chinese, Russian, Iranian or North Korean military bases and whether it restricts U.S. biotech exports or subsidizes its own agricultural exports, among other things.

And the minimum threshold under the bill for GSP beneficiary content for a good to qualify for GSP would rise from its current 35% to 40% in 2027, 45% in 2029 and 50% in 2031. Another provision would allow any U.S. content in the good to count up to 15% toward that threshold.

Dan Anthony, executive director of the Coalition for GSP, praised the bill after its introduction. “The introduction starts an important process to renew GSP and refund those tariffs paid. GSP users look forward to working with Congress to address any ongoing concerns so the long overdue renewal can occur as quickly as possible,” he said.

Congress is expected to pass legislation that will renew the expired GSP for another four years and allow retroactive GSP claims and refunds to the date of expiry, Dec. 31, 2020.

The National Customs Brokers & Forwarders Association of America said in an emailed alert to its members that it supports the bill, but that it has "great concern with the plethora of refunds that will be issued and the potential complications that ensue" when CBP "issues refunds in the form of paper checks. Members have all experienced problems with lost or missing checks, stolen checks, and failure to deliver a refund to a trader." The trade group urged its members to write to their representatives and urge them "to mandate that CBP issue all GSP refunds via electronic transfers and only issue a paper check when absolutely no other option is available."

The de minimis bill, also introduced April 15, would make ineligible any good covered by Section 301 or Section 232 duties, Section 201 safeguards or antidumping or countervailing duties. A 10-digit Harmonized Tariff Schedule code would be required at entry for any good from a country covered by a Section 301 action.

Introduced by Rep. Greg Murphy, R-N.C., the bill also would prohibit use of de minimis “in any case in which merchandise covered by a single order or contract is forwarded in separate lots to secure the benefit of such subsection.” It would set a penalty of $5,000 for the first violation, and $10,000 for subsequent violations of de minimis requirements.

Longtime trade skeptic Lori Wallach of Rethink Trade recently came out in opposition to the proposal to restrict goods covered by Section 301 tariffs from using de minimis (see 2404110073).

Two more bills that were introduced April 15 and will be considered at the markup would restrict electric vehicle tax credits. One, from Rep. Michelle Fischbach, R-Minn., would define “free trade agreement” for electric vehicle tax credit purposes to mean only agreements that eliminate duties or trade restrictions on substantially all trade. The other, from Rep. Carol Miller, R-W.V., would disallow EVs with batteries with any components or materials from a “foreign entity of concern” or a country that can control the battery supplier.

Another bill to be considered at the markup, introduced April 15 by Rep. Chris Smith, R-N.J., would require a report from the Forced Labor Enforcement Task Force on how the ban on forced labor imports should be applied to cobalt imports from Congo, though it stops short of setting any sort of rebuttable presumption that such imports are made with forced labor.

Finally, Ways and Means will consider a bill introduced in August that would bar any changes to current country of origin marking requirements for goods from the West Bank or Gaza. Rep. Claudia Tenney, R-N.Y., introduced that bill.