CLEVELAND — We’ve heard a lot about the impact of tariffs on both consumers and businesses, but there are some ways for businesses to avoid paying tariffs all at once.
The Port of Cleveland is helping businesses stay competitive in the global market.
The first and only Foreign Trade Zone designated site in Lorain County is now active.
“It’s so important now because tariffs are at almost a record high,” said Jason Dietz, CEO of Trademark Global.
He said FTZs are places where companies can physically store goods before a business is ready to sell them or export them, which results in tariffs being deferred or eliminated.
“The benefit of having the zone is that these goods can stay here indefinitely and until they physically leave the zone, the governmental process in terms of generating the bill for the business is not enacted,” Dietz said.
The port of Cleveland is the official grantee of foreign trade zone number 40, a network of sites spread across several northeast Ohio counties that border Lake Erie.
Companies that want to be an FTZ site have to get approval from the port. Then, they apply to the FTZ board, pass a site inspection, and get accepted.
Trademark is the first company to do so in Lorain County, and it has to maintain strict inventory control and report to U.S. Customs and Border Protection.
Now, other companies can rent space with Trademark and reap the benefits of the FTZ.
“We think it’s a value proposition where you would be paying for space here but you’d have this massive cash benefit that no one else is able to offer,” said Dietz
Dietz said businesses can defer millions of dollars in tariffs.
“Now folks are realizing they could have taken advantage of the FTZ even before the tariffs came into place,” said David Gutheil, COO, Port of Cleveland. He said FTZs have been around since the 1920s.
“We’re trying to help their businesses grow. We’re trying to help them become more competitive in the global marketplace,” Gutheil said.
The Trademark warehouse is at a former Ford manufacturing plant and has 1.4 million square feet, much of it available for lease.
The hope is that once businesses use the zone, it will also bring jobs. The port estimates one or two full-time jobs for every 1,000 pallets it stores.
“That will cause us to hire folks that otherwise we wouldn’t have as a part of our base operation,” said Dietz.
Dietz said businesses don’t have to change much to participate.
“They would use their same supply chain that they use today, their same network of partners. The container would show up here. We would take care of the rest,” Dietz said.