President-elect Trump will be the most “different” president the US has had in over a century, if only half of what he espoused during the campaign gets initiated. And I’m only talking about those issues centered on global trade.
So, what are we all going to do now? Well there are not any specifics we can be assured of, but there are some conjectures that make the most sense. There will be additional tariffs on imported merchandise and probably voluntary restraint agreements, or some other form of trade sanctions, against a number of countries/companies. More tariffs mean more use of the foreign trade zone program.
For more than 82 years the FTZ program has been “leveling the playing field” for US firms and FDI firms relocating to the US. Firms that have been helped by the FTZ program include large companies such as ExxonMobil, Pfizer, BMW, Mercedes Benz, and Airbus, and smaller firms such as Brother Industries, Grundfos Pumps and Fossil Watch. FTZ employment now tops 400,000 US workers in direct jobs.
US import tariff rates came down over the last 50 years, and still the FTZ program seemed to flourish. This increase in zone users created a significant savings of time/resources for Customs and Border Protection while saving companies substantial supply chain costs. (Zones account for over 16 percent of all customs entry value, while the number of entries processed is less than one-half of 1 percent.)
Nobody knows what a Trump presidency will do to trade, but we all can be more prepared and proactive when it comes to protecting margins via supply chain initiatives. The FTZ program became much more streamlined over the past five years, and, indeed, is available to any and all prospective companies, as long as they can benefit from the program.