ExclusiveUS Importers Using Foreign-Trade Zones as a Tariff Shelter

At this massive warehouse in Chandler, Arizona, goods that face steep U.S. tariffs are stacked high in what is known as a foreign trade zone or FTZ. It's a federally designated area that allows American businesses to defer import duties. We import quite a few items from China and we've been hit of late with terrible tariffs. So the foreign trade zone gives us an opportunity to defer those tariffs. Terry Gooden is the CEO of Sportaflex, a manufacturer of sports fences, which he says has been hit hard by U.S. tariffs on aluminum and steel. Now he worries that without relief from President Donald Trump's tariffs, his already small employee count could be cut significantly. I just know that we have nine people and if we don't get some relief soon FTZs are not new. They were developed back in 1934 and are located within a 60-mile radius of a U.S. port of entry. David Harlow, president of ITC Diligence International, says there has been a renewed interest in FTZs as businesses look for ways to navigate current trade tensions. We've seen probably about a 100% increase or more in companies wanting to learn and understand how they can mitigate and navigate tariffs and utilizing the foreign trade zone to do that. James Peacock, CEO of SKU Distribution, the FTZ warehouse storing Gooden's products, says he has also seen a spike in interest from a warehouse owner standpoint. We went from maybe a couple calls a month to 10 calls every day and then we had probably three or four submissions online asking about the foreign trade zone and was it available? Can we get some more information on it? Can you explain to us what this is? For Gooden, the FTZ is an opportunity to buy time and conserve money. Politically I'm conservative. I did vote for President Trump. I don't agree with the way he's handled the tariffs. I feel like American business people are being punished. What we were hearing from President Trump was he's collecting hundreds of billions of dollars and inferring that it's coming from the Chinese. It's not. American businesses are paying these tariffs.