In March of 2018, American steel manufacturers experienced something amazing. An influx of orders that hadn’t been seen in years came flooding into these plants and even led to some long-dormant smelter facilities being reopened. The cause of all these orders was a direct result of Trump’s 25% tariff on steel imports. Most business owners would view this as a good thing, and even consider it a boon to the industry, but the motivation behind these orders tells the truth. It was fear, fear that these tariffs would force domestic manufacturers to pay significantly more in custom taxes than they had in the past. As a result, they purchased locally to stock up for when the tariff bill came due.
Fast forward a year and a half, and the American steel manufacturing sector has experienced severely depressed sales and the start of widespread layoffs. The same manufacturing companies that made these early purchases have slowed down and begun looking for other alternatives to their tariff problem. The blue collar promise made by Trump’s campaign in 2016 doesn’t seem to be delivering as well as hoped, and now the American business owner is left scrambling for inventory that won’t cause them to completely restructure their pricing, or force rising costs onto their consumers.
The ill-famed North American Free Trade Agreement (NAFTA) gave some relief to American steel importers, by allowing imports from Mexico and Canada to be ‘tariff free,’ but this didn’t solve the larger issue at hand. China and the Eurozone continue to be the main source of import and export business for the American manufacturer and with the constant back and forth of retaliatory tariffs, the American business owner is becoming worn out and frustrated.
If you own an import export business in the US and are still trying to navigate precarious tariffs and custom taxes, there is good news. Foreign Trade Zones are available for your business to use as a resource in which to lower or delay these costs. By utilizing Foreign Trade Zones as a means of importing or exporting materials, you can store goods and even manufacture product in these areas, at significantly lowered costs. The FTZ experts at TriLink are strategically positioned across the United States to bring this option to you and afford you the freedom of operating your business with more certainty around these tariffs.
Published on October 31, 2019