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Dodging high tariffs is the process of legally reducing or eliminating import taxes imposed on goods entering a country. Many businesses face significant financial burdens when tariffs increase, affecting their bottom line and overall competitiveness.
Companies engaged in international trade often use strategies like Foreign Trade Zones (FTZs), Free Trade Agreements (FTAs), tariff engineering, and supply chain optimization to mitigate these costs. Unlike illegal tax evasion, dodging high tariffs refers to the legitimate, strategic use of trade regulations to minimize expenses.
As the President of Tri-Link FTZ, I’ve seen firsthand how companies struggle with tariffs. Over our 35 years in third-party logistics, we’ve helped businesses legally reduce their duty costs, optimize supply chains, and improve global trade efficiency.
Let’s break down the best strategies for dodging high tariffs and how you can implement them.
Tariffs are taxes imposed by a government on imported goods. They are often used to protect domestic industries, generate revenue, or penalize foreign trade practices.
However, for businesses engaged in global commerce, high tariffs can mean higher costs, reduced profit margins, and limited market competitiveness. Governments change tariffs based on trade agreements, political shifts, and economic policies.
The unpredictability of tariff policies can create major financial risks for companies dependent on foreign suppliers. Some industries are hit harder than others—automotive, technology, apparel, and agriculture are just a few sectors that constantly battle fluctuating tariffs.
From my experience, businesses that don’t plan for tariffs often scramble for solutions when costs suddenly spike. But those that implement a proactive strategy—like leveraging FTZs or restructuring supply chains—are in a much better position to absorb tariff shocks.
One of the most effective ways to legally reduce tariffs is by using Foreign Trade Zones (FTZs). An FTZ is a secured area within the United States where imported goods can be stored, processed, or re-exported without incurring duties.
Only when goods leave the FTZ for domestic consumption do tariffs apply—giving businesses better control over costs. At Tri-Link FTZ, we work with companies that use FTZs to defer, reduce, or even eliminate tariff payments.
Here’s how:
For example, an electronics company we work with imports circuit board components from Asia. Instead of paying tariffs immediately, they store the goods in our FTZ, assemble them into finished products, and then export them to Canada and Mexico without ever paying U.S. import duties.
This strategic use of FTZs saves the company hundreds of thousands of dollars annually. The process of getting FTZ designation can be complex, but for companies dealing with high-volume imports, the savings far outweigh the setup costs. Read more here.
Another powerful strategy for dodging high tariffs is tariff engineering. This involves modifying a product’s design, materials, or classification to qualify for a lower-duty category.
Many well-known brands use this method to legally reduce their tariff obligations. A famous example is Converse sneakers—they added a fuzzy felt layer on the bottom of their shoes, allowing them to be classified as slippers instead of athletic footwear, cutting the duty rate from 20% to just 6%.
At Tri-Link FTZ, we helped an apparel client redesign a women’s blouse to include extra pockets below the waistline. This small change shifted the product classification from a high-tariff blouse (26.9%) to a lower-tariff category (16%), saving the company millions in duty costs over time.
When considering tariff engineering, businesses should:
This method isn’t about deception—it’s about strategically designing products within the legal trade framework.
The United States has over 14 Free Trade Agreements (FTAs) that allow businesses to import goods at lower tariff rates or duty-free. However, many companies fail to take full advantage of these agreements because they don’t understand the qualification criteria.
FTAs like USMCA (formerly NAFTA), CAFTA-DR, and KORUS provide tariff benefits if goods meet the rules of origin requirements. This means products must be manufactured using a certain percentage of materials from member countries to qualify for lower tariffs.
At Tri-Link FTZ, we work with companies to navigate the complexities of FTAs by:
A furniture company we assisted shifted production of key components from China to Mexico, allowing them to avoid the 25% U.S. tariffs on Chinese imports and take advantage of the USMCA’s reduced duty rates. Proper FTA planning can save companies millions in unnecessary tariff payments, but it requires diligent record-keeping and compliance.
For companies importing from high-tariff regions like China, another viable strategy is relocating manufacturing or sourcing alternative suppliers in lower-tariff countries. Many companies have moved production from China to Vietnam, Malaysia, and Thailand to sidestep U.S. tariffs imposed during the trade war.
However, shifting production comes with cost-benefit trade-offs—labor costs, logistics, and political stability all play a role. At Tri-Link FTZ, we guide businesses through:
One of our clients, an automotive parts supplier, moved 40% of their component manufacturing from China to Taiwan and Mexico. This shift reduced their average tariff burden by 17%, allowing them to maintain competitive pricing without increasing consumer costs.
Shifting supply chains isn’t an overnight fix, but for businesses hit hard by tariffs, it’s often the most sustainable long-term solution.
Even if a company has already paid high tariffs, it might not be too late to get some of that money back. The Duty Drawback Program allows businesses to claim refunds on tariffs paid for goods that are later exported or destroyed.
Many companies overlook this program, leaving significant savings on the table. Under U.S. Customs and Border Protection (CBP) regulations, businesses can apply for duty refunds on up to 99% of duties paid on certain imported goods if they are:
One of our clients, a pharmaceutical distributor, had been importing active ingredients from Europe and paying high tariffs. By implementing a duty drawback program, they successfully claimed refunds on unused materials that were re-exported.
Over three years, they recovered over $4 million in tariff refunds. The drawback process can be paperwork-heavy, but with proper tracking and documentation, businesses can recover substantial amounts of money that would otherwise be lost.
One of the most common and costly mistakes businesses make is failing to correctly classify their goods for customs purposes. Even a small error in classification can result in overpaying tariffs, customs penalties, and shipping delays.
Proper customs compliance starts with:
A common mistake we see at Tri-Link FTZ is businesses misclassifying goods into higher-taxed categories. A client importing machinery parts was paying 10% tariffs unnecessarily because their goods were incorrectly classified as finished equipment.
After reassessing their HTS codes, we corrected the issue, reducing their tariffs to just 2%—saving them over $200,000 per year. The key to dodging high tariffs isn’t just about using legal loopholes—it’s about understanding trade rules, classifying goods correctly, and maintaining meticulous records. Read more here.
Technology is transforming global trade, and AI-driven solutions are making it easier for companies to manage tariffs and reduce compliance risks. Businesses can now use machine learning algorithms and automation software to track tariff changes, optimize classifications, and flag potential savings opportunities.
Some benefits of AI-powered tariff management tools include:
A major electronics brand we work with implemented AI-driven tariff management, which reduced misclassifications by 85% and saved them nearly $1 million in unnecessary duties in the first year alone. With automation, businesses can stay ahead of policy changes, improve compliance, and significantly reduce tariff-related expenses.
Not all tariff reduction strategies require legal expertise or complex compliance tactics—sometimes, good old-fashioned negotiation can help businesses offset costs. Many importers fail to negotiate tariff-sharing agreements with suppliers, even though manufacturers and freight companies often have incentives to adjust pricing structures.
At Tri-Link FTZ, we always encourage our clients to:
A fashion retailer we assisted negotiated lower material costs with their supplier after new tariffs increased their import expenses by 20%. By renegotiating contracts, they successfully offset half of the tariff increase, allowing them to maintain retail pricing without losing customers.
It’s a simple but highly effective approach—businesses that engage in active supplier negotiations can dramatically reduce tariff-related costs.
Trade policies are constantly evolving, and companies that fail to anticipate tariff shifts often face sudden financial shocks. In 2025, businesses should prepare for:
The best way to stay ahead of tariff changes is to build a flexible supply chain that can quickly adapt. At Tri-Link FTZ, we monitor global trade policies in real-time, helping our clients pivot their strategies before tariffs take effect.
A tech company we worked with anticipated a tariff increase on semiconductor components and stockpiled inventory in an FTZ ahead of time. By the time the 25% tariff hike was implemented, they had six months’ worth of duty-free inventory, saving millions of dollars while competitors scrambled for solutions.
The key lesson here? Planning ahead makes all the difference.
Dodging high tariffs isn’t about finding loopholes—it’s about using smart, legal strategies that protect your business from unnecessary costs. Over the past 35 years, we’ve helped companies navigate the complexities of tariffs, supply chains, and customs compliance to save millions in duty costs.
To recap, the best ways to reduce tariff burdens include:
At Tri-Link FTZ, we specialize in helping businesses implement these strategies. If you’re looking for customized solutions to reduce your tariff costs, contact us today.
We’d love to help you optimize your supply chain and improve your bottom line.
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