Inside tariffs for a trade war, “ftz” and related warehouses

To compensate Growth cost on tariffs and uncertainty of trading warCompanies use the US, sanctioned by customs zones (FTZS) and related warehouses to delay or reduce products.

FTZS has a long history dating from the previous trade conflict created by Congress into great depression to encourage international trade and increase exports at a time when the tariffs on Smoot-Hawley were up to 53%.

Companies importing raw materials, semi -finished products or components from foreign countries on FTZ or Conmed are essentially in the tariff bubble, that is, when they enter the US, they are stored without responsibility.

Once in FTZ, the product can be assembled or changed. The responsibilities are only collected after the product leaves the area and is in trade. Products can be stored in the FTZ endlessly. Related formulations have a limit of up to five years.

According to the US, there is FTZS in all 50 states, and we have about 2240 FTZS, the US Customs reports.

For companies that got into the cross -fire trading war, the conservation of cash is the king.

Payment delay, “FTZS and related warehouses, essentially releasing the company’s cash flow,” said Jason Stricland, the Givens Logistic Sales Director. “There is also an additional advantage that if the product is made at the FTZ and re -exported abroad, there are no duty payments at all.”

Before the 2025 World Trade War, the companies that produced the products in the FTZ had what was known as the “turned tariff”. This means that the company was able to pay a lower bet on finished products compared to the payment of higher duties on the individual components given in the production process.

Companies that acted inside FTZ include automakers Freod. Gm and Perpetratoras well as General Electric, Intel and Sony. According to the World Organization of Free Zones, FTZS was also used by Pfizer when it was developing a COVID vaccine. The program allowed Pfizer to produce shots without making additional drug components and store the vaccine until the FDA permit was permitted.

But President Trump has completed this rule through recent executive orders, as well as for companies such as Regent Tek Industries, which produces fluid markings used by road crew to address the country, roads and highways, this has become a big problem that leads to millions of additional tariffs.

“Our product is mostly similar to baking cake,” said Helen Torcos, President Regent Tek. “If you lack one ingredient, you can’t make this pie. We can’t find all our components here. We pay 7% more because the turn -in -tariff option is unavailable to us.”

Without the benefit of FTZ’s inverted tariffs, many companies quickly switched to related warehouses. Crickland described the demand for CNBC through the roof.

Companies can import products into a bubble at a higher tariff rate and store without paying duties. But, unlike blocking tariffs on FTZS, when the tariff drops while the product is on the repository, the company can release its product and pay the lower tariff rate.

“After all, the goal is to protect the cash flow,” Stricland said. “You do not want to bring all your goods and spend money stream against tariffs, which may be here, you know, six weeks, six months when you can postpone until the market is ready to consume these goods. I think it’s a win -win.”

Watch the full video above to find out more about these tariff shelters of the trade war.