Hurdles to Re-Shoring as Renewal of U.S. Trade Deal Is Delayed

The decades-old trade rule in the Generalized System of Preferences expired at the end of 2020, ending tariff-free access to the U.S. market for thousands of goods from more than 100 countries.

The Wall Street Journal says the glitch is driving U.S. companies to return to China for sourcing, because it effectively changes the financial calculations for sourcing and distribution of goods made in other countries overseas. 

The impact accounts for a tiny percentage of overall U.S. imports, but it has meant surging costs and hard choices for smaller companies that have little cushion to absorb the hit.

The program has often expired since it came into force in 1975, but has usually been swiftly renewed. Renewal this time has been complicated by political wrangling over how to decide which countries should be eligible for GSP benefits, as well as procedural hurdles linked to broader disagreements in Congress over trade and China.