William W. Scriber, the Port Executive Director “praised the board for their foresight in positioning the Port as the only port on Lake Ontario in New York to have an FTZ.” “We believe this will place us in a place to both provide our import customers with an added service but also a protective measure in case of future tariffs.”
FTZs allow for the most duty deferral of any kind of Customs program. Companies can bring goods into the FTZ without duties or most fees, including exemption from inventory tax.
In some cases, tariffs on U.S. component items or raw materials have a higher duty rate than the finished product, putting a U.S. manufacturer at a cost disadvantage to an importer. However, by participating in an FTZ, the U.S. manufacturer pays whichever duty is lower. In many cases the tariff of the manufactured good is zero, eliminating any costs associated with importing raw materials and goods. There is no way to take advantage of inverted tariffs without operating in an FTZ. Since an FTZ is considered outside the commerce of the United States and U.S. Customs, a company importing components or raw material into the FTZ doesn't pay Customs duty until it enters U.S. commerce.
“We expect to be able to offer this service to customers by fall of this year”, added Mr. Scriber.