Inside trade war’s tariff hideouts, ‘FTZs’ and bonded warehouses

Companies use US Customs Approved Foreign Trade Zones (FTZ) and affiliated warehouses to delay or reduce product taxes to balance the increasing costs of tariffs and trade war uncertainty.

FTZs have a long history of the period of a previous trade conflict, which was created by the Congress during the Great Depression and created by the Congress during a major depression by the Congress to increase exports when Smoot-Hawley tariffs are as high as 53%.

Companies importing components from semi -finished or foreign countries to a ftz or connected warehouse are essentially in a tariff balloon, ie if they enter the United States, they are stored without customs.

After entering a FTZ, a product can be installed or replaced. The tasks are only collected after a product leaves the region and entering the US trade. Products can be stored indefinitely in a FTZ. Connected warehouses have a limit of up to five years.

According to US customs, there are FTZs in 50 states and there are about 2,240 ftz in the country.

It is the king for protecting cash for companies caught in the cross -fire of Trump’s trade war.

“FTZs and affiliated warehouses essentially release the cash flow of a company,” logistics company Givens Sales Director Jason Strickland said. He continued: “If a product is produced in a FTZ and is re -exported abroad, there is an additional benefit for not paying any task.”

Before the 2025 Global Trade War, companies that produced products in a FTZ had companies known as a “reverse tariff” benefit. This means that the company has a lower task rate option on the finished product against paying higher tasks on the individual components brought to the production process.

Automobile manufacturers among companies operating in FTZs Ford– GM And ChryslerGeneral Electric, Intel And Sony. According to the World Free Regions organization, FTZs were also used by Pfizer to develop Covid vaccine. The program enabled Pfizer to shoot without additional tasks about the drug components and storage the vaccine until FDA approval.

However, President Trump ended this rule through the latest executive orders, and this has become a major problem for companies like Regent Tek Industries, which produced liquid road signs on the roads, roads and highways of the country, and this resulted in millions of dollars extra tariffs.

“Our product is basically like cooking a cake,” Regent’s only president Helen Torkos said. He said. “If you miss a ingredient, you can’t make that cake. We can’t source all our components here. Now we pay 7% more because the opposite tariff option is no longer available for us.”

Without the benefit of the FTZ reversed tariff, many companies quickly switched to tied warehouses. Strickland passed the CNBC request through the roof.

Companies can import products in a bubble under a higher tariff ratio and store them without paying. However, unlike the locking of tariff ratios in FTZs, if a product falls when a connected warehouse falls, the company may release its products and pay the lower tariff ratio.

“At the end of the day, the aim is to protect your cash flow.” He said. “You do not want to bring all your goods and spend your cash flow against tariffs that may not be here, if you can postpone six weeks, six months, until the market is ready to consume these goods. I think it’s a win-win.”

Watch the video above to learn more about this trading war tariff hiding places.