Tariff clampdown hits home goods: sweeping changes in GSP

tariff concept

WAshington (FNS)–More than $1 billion worth of annual trade in home furnishing products has been removed from duty-free status by President Reagan under tighter restrictions that the White House has clamped on a special program designed to aid the economies of emerging countries.

Tariff clampdown hits home goods: sweeping changes in GSP01

A wide range of items, including telephones, cookware, waterbed mattresses and radio receivers, will lose their tariff exemption, either as part of a general crackdown or because individual countries have been removed from the exempt status.

The sweeping changes were effective March 30. They were announced last week as part of a review the government makes annually of the Generalized System of Preferences.

Each year, the GSP statute provides a formula that requires certain products from any given foreign supplier to be removed from GSP eligibility, either because they have captured more than 50 percent of the U.S. market or because shipments have reached a certain dollar level.

But increasingly, the White House also has been “graduating” products from GSP benefits when the supplying nation has reached a certain degree of affluence. TAiwan, Hong Kong and South Korea have been chiefly affected.

Taiwan, Hong Kong and Korea also happen to be the three largest GSP beneficiaries and, together, account for about 52 percent of all GSP trade.

Altogether, 3,053 producers are covered by the system, and many of them are in the home furnishings field.

Among the major changes announced last week was the removal from GSP of telephone equipment and parts shipped from TAiwan and Hong Kong. Around $380 million in annual trade was involved in the action, which was triggered automatically because of the large volume involved.

Under the same category of automatic deletion was the removal from GSP of hand-held citizens band radio receivers from South Korea and Hong Kong, accounting in aggregate for more than $200 million in shipments last year.

Also removed from the GSP list because volume has exceeded the statutory formula were microwave ovens from Korea ($93.7 million last year); various earthenware and bone china ornaments from TAiwan (around $9 million); nonfolding chairs of wood other than teak from Taiwan ($60.5 million) and various wall covering of rubber or plastic from Taiwan ($1.1 million).

Each of these items, at least for the coming 12 months, will lose its duty-free status pending next year’s review of the annual import statistics.

In addition to these deletions, automatically triggered by the statue, President Reagan also removed a number of home furnishings products from GSP eligibility by fiat.

Tariff clampdown hits home goods: sweeping changes in GSP02

Waterbed mattresses and their liners, with imports totaling almost $30 million last year, will be subject to import duties from whatever source. They were one of two items that were entirely removed from the GSP list.

In addition, Reagan “graduated” a number of itmes shipped from certain countries, including porcelain-on-steel cooking and kitchenware from Taiwan ($23.7 million last year); and pianos of all types from Korea ($22 million in 1983).

Finally, the president decided to deny eligibility to certain products shipped from certain countries, even though their trade last year fell within trade beneficiary definitions provided by the GSP law.

These items included copper cooking and kitchenware from Taiwan (5.7 million in 1983); cast aluminum cooking and kitchenware not enameled or glazed from TAiwan ($1.1 million); electric flat irons from Singapore ($24 million); solid state radio receivers from Singapore, Taiwan and Korea ($137 million combined); tape recorders, dictation and transcribing machines from Korea and TAiwan ($78 million combined); nad folding directors chairs shipped from Taiwan ($3 million.)

In one of the few actions restoring GSP eligibility, Reagan redesignated wooden chairs (other than teak) shipped from Yugoslavia as benefiting from the duty-free status.