LORAIN, Ohio — With shifting trade policies and rising tariffs reshaping the global supply chain, Ohio manufacturers are turning to a century-old solution to stay competitive: Foreign-Trade Zones.
Dozens of industry professionals gathered at Lorain County Community College this week for a workshop on how the federal Foreign-Trade Zone (FTZ) program can help them reduce costs. Organized by the Lorain County Commissioners and the county’s Community Development Department, the event drew interest from companies of all sizes seeking financial relief from new import taxes.
“The very common statement you’ll hear from people dealing with customs or anything like this right now is, what you know right now will change later. And it will probably change tomorrow,” Grant Sirow, import expert manager for KTM North America, a major motorcycle manufacturer.
Sirow, who has worked in the import sector for over 20 years, said the current pace of change in trade regulations is unprecedented.
“There’s so much going on right now and everything’s changing so quickly,” he said. “The best you can do is stay informed.”
The FTZ program, established in 1934, enables companies to store, assemble, manufacture, or process imported goods without incurring duties until the items exit the zone and enter U.S. commerce. In some cases, duties can be reduced or eliminated altogether, depending on the final product’s classification or destination.
As long as the goods remain in the zone, no customs duties or federal excise taxes are owed. This can allow businesses to delay large upfront tax payments until products are sold, or avoid them entirely if the goods are exported.
“The companies that are bringing high-value imports in—or high-volume imports—into the country can take advantage of it,” David Gutheil, interim president and CEO of Port of Cleveland, said. “We had a number of those types of folks in the room today.”
Interest in the program is growing fast. Officials at the Port of Cleveland report that calls from local companies seeking to enroll in FTZs have doubled over the past three months.
Even for a program described by many as “wonky,” the turnout at the event was significant.
“I was surprised by the turnout, frankly,” Gutheil said. “To see 35 to 45 people here was really exciting.”
The cost-saving benefits may soon reach beyond warehouses and factory floors. Sirow said that as more companies adopt FTZs and lower their operating costs, consumers may eventually see price relief too.
“We have seen changes. We have implemented changes,” he said.
With more economic shifts on the horizon, experts say that manufacturers who prepare now may be in a stronger position later, before the next round of tariffs takes effect.
