The Tariff Hiders of Commercial War, “FTZ” and warehouses

To compensate for Increasing cost of tariffs and uncertainty of trade warCompanies use US customs sanctioned external commercial areas (FTZ) and bound warehouses to delay or reduce products on products.

FTZ has a long history dating back to a previous commercial conflict period created during the Great Depression of Congress to Promotion of International Trade and Enhance Exports At the moment when Smoot-Hawley rates were up to 53%.

Companies that import raw materials, semi-finished or components from foreign countries, in FTZ or a connected warehouse, are essentially in a bubble, which means that when they enter the US, they are stored duty freely.

After entering the FTZ, the product can be assembled or modified. The obligations are collected only after the product leaves the area and we enter our trade with us. The products can be stored in FTZ for an indefinite period. Related warehouses have a limit of up to five years.

There are FTZ in all 50 states and there are approximately 2240 feet across the country, according to US customs.

For the companies caught in the crossfire of Trump’s trade war, keeping money is king.

With the delay in the mile payments “FTZ and the bond ware, they essentially release the company’s cash flow,” said Jason Strickland, director of sales at the logistics company Givens. “There is also an additional advantage that if a product is manufactured in FTZ and exported again abroad, no customs payments are made at all.”

Prior to the Global Trade War of 2025, the companies that produce products in FTZ had what was known as the “inverted tariff”. This means that the company had the opportunity to pay a more duties of the finished product against the payment of higher duties on the individual components imported into the production process.

Companies that worked inside FTZ include automakers Ford., Gm and Chrysleras well as General Electric, Intel and SonyS According to the World Free Zone Organization, FTZ was also used by Pfizer while developing the Covid vaccine. The program enabled Pfizer to produce photos without performing additional obligations on drug components and storing the vaccine until it is approved by FDA.

But President Trump has ended this rule through the latest executive orders, and for companies such as Regent Tek Industries, which produces liquid markers used by road crews to make lines on national roads, roads and highways that become a big problem, leading to millions of dollars in additional tariffs.

“Our product is mainly like baking on a cake,” said Helen Torkos, President of Regent Tek. “If you miss an ingredient, you can’t make this cake. We can’t get all our components here. Now we pay about 7% more because the option for the inverted tariff is no longer available to us.”

Without the benefit of the FTZ inverted tariff, many companies quickly moved to tied warehouses. Strickland determined the demand for CNBC as through the roof.

Companies can import bubble products at a higher tariff rate and store without paying obligations. But unlike the locking tariffs for FTZ, if the tariff drops while a product is in a bound warehouse, the company can release its product and pay the lower tariff rate.

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

Watch the full video above to learn more about these hiding places about trade warfare tariffs.