Port Of Oswego Foreign Trade Zone Can Alleviate Impacts Of Trump’s Vowed Tariffs

by ChirelloMarketing | November 26, 2024 12:32 pm

As the second largest importer of Canadian aluminum, the Port of Oswego’s Foreign Trade Zone (FTZ) is a way to for Canadian aluminum manufacturers to manage cash flow and delay tariff impacts promised by President-elect Trump, said William, Scriber, POA executive director and CEO. FTZs are land areas within the United States that are legally considered outside of the United States Customs and Border Protection Agency’s authority. Merchandise can be imported to these zones and allow companies to save time and money on duties, tariffs and production costs. Aluminum ingots, above, are stored at the Port of Oswego.

OSWEGO, NY – President-elect Donald Trump has promised massive hikes in tariffs on goods coming from Mexico, Canada and China on day one of his administration. As the second largest importer of Canadian aluminum, the Port of Oswego’s Foreign Trade Zone (FTZ) is a way to for Canadian aluminum manufacturers to manage cash flow and delay tariff impacts, said William, Scriber, POA executive director and CEO. FTZs are land areas within the United States that are legally considered outside of the United States Customs and Border Protection Agency’s authority. Merchandise can be imported to these zones and allow companies to save time and money on duties, tariffs and production costs.

According to CNN (https://www.cnn.com/2024/11/25/politics/trump-tariffs-mexico-canada-china/index.html[1]): “On January 20^th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 35% Tariff on ALL products coming into the United States,” Trump said. A way to address this impact, Scriber said, is to store product in an FTZ. “It can be stored there indefinitely, and there is no tariff until the product is actually used in production and the customer is generating cash flow. This helps cash flow because there is no outlay for duty while they are being stored, and in most cases, when goods are sold after FTZ storage, the seller will have cash in-hand to pay duty before releasing them. FTZs allow for no duties and federal excise taxes to be paid until a finished product is brought from the FTZ to the domestic market territory or a North American Free Trade agreement (NAFTA), country.”

During the first Trump administration, which also imposed tariffs, the Port of Oswego anticipated these impacts and began the process of establishing an FTZ , Scriber said. “To my knowledge, we are the only port on Lake Ontario that has an FTZ.  And now, the timing couldn’t be better to help our customers deal with the impending impact of tariffs in 2025.

“Another advantage is that our FTZ  gives a company the opportunity to closely track their inventory. When goods are brought into an FTZ warehouse, like the Port of Oswego, the company is able to identify and manage them instead of being under Customs control.”

The CNN article also said: “The measures proposed this evening could hit a number of strategic US industrial sectors hard, add approximately $272 billion a year to tax burdens, raise goods prices, lift interest rates, and sap strength in an already-vulnerable household sector,” said Karl Schamotta, chief market strategist at Corpay Cross-Border Solutions. Immediately after the announcement, the Canadian dollar fell 1.2% against the US dollar, and the Mexican peso fell 2% against the dollar, but both recovered some of their losses Tuesday morning. China’s yuan, though controlled by the government, traded higher – above 7.6% – in offshore markets.”

According to the National Association of Foreign-Trade Zones, there are 191 active FTZs in all 50 states and Puerto Rico. More than 3,200 companies currently utilize the program.

Source URL: https://oswegocountytoday.com/sponsored-content/news-from-the-port/port-of-oswego-foreign-trade-zone-can-alleviate-impacts-of-trumps-vowed-tariffs/

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