As President Trump’s self-imposed tariff deadline loomed this week, Octavio Saavedra was fielding frantic calls from clients who had been keeping their goods in the warehouses he manages. The companies needed to quickly move their imported items out of storage, fearing tariff rates would rise.
When Mr. Trump threatened tariffs in the early weeks of his second term, businesses searched for ways to avoid paying the hefty duties upfront. One option: Send goods to the United States and store them in so-called bonded warehouses.
These designated storage areas allow foreign companies to bring products into U.S. warehouses, but postpone the payment of tariffs until the goods are sent to stores or directly to customers. Otherwise, companies have to pay the duties as soon as the products arrive in America.
With bonded warehouses, the hope was that companies could wait out the tariffs. If the tariff rate fell and was financially favorable enough, they would pull their inventory from the warehouse at that time. But ahead of the Friday trade deal deadline, many companies decided their best bet was to get their stuff out to avoid paying even higher rates, according to lawyers and customs brokers.
Pulling inventory from bonded warehouses en masse was a sign of growing skepticism among importers that the Trump administration would reach trade deals and grant lower tariff rates by Mr. Trump’s deadline.
Mr. Saaverdra, the president of EP Logistics, a cross-border logistics firm with offices in El Paso, Texas, and Juárez, Mexico, called the removal of inventory from his bonded warehouse over the past week a “panic withdrawal.” His company stores between $20 million and $50 million worth of goods in its bonded warehouses and foreign trade zones, he said, and handles shipments of electronics, like servers for data centers, and a variety of other imports.
“Almost all the inventory that’s there — it’s getting withdrawn right now,” he said on Thursday, hours before Mr. Trump’s tariff deadline, referring specifically to the inventory held in bonded warehouses.
Foreign trade zones and bonded warehouses are legal loopholes companies have deployed to blunt the financial hit of new tariffs, yet they each work a little differently.
Foreign trade zones, or F.T.Z.s, offer similar benefits of a delayed tariff payment with a key difference: Companies usually pay the tariff rate that was in effect when they first brought the product into the warehouse, meaning they essentially lock in the rate.
“We have seen demand skyrocket from our clients since the implementation of the tariffs,” said Angela Santos, a partner at the law firm ArentFox Schiff, which represents retailers and fashion companies. “They just wanted some kind of solution where they could either just manage cash flow, or have a holding pattern to decide what to do next.”
Companies were hoping tariffs would be lowered before pulling inventory out of bonded warehouses. But Ms. Santos said that a number of her clients made plans to retrieve their products leading up to Friday’s deadline, concluding that tariff rates were likely to shift higher, not lower.
“We’ve all come to the unfortunate conclusion that that’s not going to happen, and nobody’s going to be at zero,” she said, referring to tariffs on foreign imports. “The best trade deals they’ve been waving around are at 10 percent.”
As of Friday, the tariff rates announced on goods coming from other countries into the United States stood at a base line of 10 percent and were as high as 50 percent.
In 2023, there were nearly 400 foreign trade zones operating in the United States, employing 550,000 people, according to the International Trade Administration. These zones received $949 billion in merchandise and exported a total of $149 billion.
U.S. Customs and Border Protection did not immediately provide information on the number of bonded warehouses in the United States and the volume of goods stored in them.
This is the second wave of rushed withdrawals from bonded warehouses, the first being when Mr. Trump imposed additional tariffs on China during his first term, Mr. Saavedra said. Demand for F.T.Z.s and bonded warehouses also skyrocketed at that time, he added, but tapered off when tariff talk died down under the Biden administration.
Companies incur steep costs — a minimum of tens of thousands of dollars per year — to keep goods in duty-free zones and delay tariff payments, said Jackson Wood, the director of industry strategy at Descartes, which provides software to help companies operate F.T.Z.s.
Under the current Trump administration, many companies have calculated such an investment to be more advantageous than paying tariffs upfront, whereas the costs might be deemed less justifiable in a lower tariff environment, Mr. Wood added.
The spike in demand for bonded warehouses in particular has pushed up prices for storage and led to a shortage of space. Ms. Santos said one of her clients recently asked her for help because the company, after calling around, was unable to locate duty-free storage space on its own. “Usually, you don’t use your lawyers to find you a bonded warehouse,” Ms. Santos said, “but they were having such problems that they were having to use our network.”
But with Mr. Trump’s new country-specific tariffs set to take effect on Aug. 7, bonded warehouses “have gone from a cash flow strategy to a liability,” said James Marley, the chief executive of Swap Commerce, a software company that helps e-commerce brands with their supply chains. Storing inventory in these warehouses now exposes businesses to sudden duty spikes, he said.
“What was once a haven for businesses has now become a game of tariff roulette, where you don’t know where the legislation will land tomorrow,” he said.
Danielle Kaye is a Times reporter, covering business and policy for the DealBook newsletter.
Jordyn Holman is a Times business reporter covering management and writing the Corner Office column.
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