American companies resort to free trade areas to escape Trump fees

In an attempt to avoid the new customs duties imposed by US President Donald Trump, many major and small companies are heading to customs approved sites known as “free trade areas” and “customs warehouses”, according to CNBC.

What danger does companies face?

These fees represent a major challenge for American companies, especially those that depend on international supply chains. Free trade areas and customs warehouses are safe storage sites and manufacturing sites approved by American customs, where customs duties or production taxes are not imposed on goods except when they enter the American market.
Also read: Including China .. Trump: Customs duties will be concluded with all countries

What are the free trade areas?

Free trade areas allow importers and manufacturers to store imported goods without paying any customs fees for unlimited periods. The goods can also be stored under bonds in customs warehouses for up to five years from the date of their import.
This system provides importers with the opportunity to reduce or cancel the fees imposed when transporting goods to the local market, which is known as the “inverted tariff”.

The high cost of fees is pushed towards strategic thinking

Jackson Wood of the company “Descartes Global wants Intelligence”, that thinking about creating a free trade zone was not a year ago because of the high investment costs, but added: “Today, companies, including the small, began to analyze numbers and search for financial feasibility. And under the high fees, this option has become more logical than ever.”

A temporary deadline before applying fees

The report indicated that there is a temporary period of 90 days before applying new customs duties in most cases. However, some fees on Chinese goods actually exceeded 145 percent.
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How do these areas enhance the financial situation of companies?

Postponing customs duties gives companies a competitive advantage, by reducing costs and improving cash flow. It also gives it greater flexibility in planning operational operations.
Jeffrey J. Tafil, an industrial observer, stressed that his organization has witnessed a significant increase in the membership of companies since the presidential elections in 2024, as these companies seek smart solutions to deal with the state of commercial uncertainty.

Historical view: Congress creature

The US Congress established free trade areas in the 1930s with the aim of supporting local investment. Today, this program supports more than 550,000 jobs in all fifty states and Puerto Rico, and includes almost all industrial sectors.

How do major companies view this strategy?

“The recent amendments to customs duties have increased demand for free trade areas. Other options, such as recovery of fees, do not include the new fees imposed by Trump,” said Chelsea Pavuna Gardner, a spokeswoman for Merck in North America.
She added: “The companies that were previously rejected the idea of ​​free trade areas are now viewing as a strategic and effective solution.”

Changes in the shipping movement

Recent data from Asia indicates a significant decline in manufacturing and ship movement, which reflects transformations in corporate decisions on shipping. Some companies are choosing to postpone the shipping completely in light of the uncertainty related to fees.