Companies Are Using a Depression-Era Law To Escape Trump's Tariffs -- And It's Costing Them
A few weeks ago, signs went up in the parking lots and loading docks at Fluid Equipment Development Co., a small manufacturer in Monroe, Michigan, a lakeside town a bit south of Detroit.
“WARNING,” they read. “This bonded facility is under the custody and control of U.S. Customs and Border Protection and any person entering these premises must comply to the laws governed therein.”
FEDCO is a U.S. company operating on American soil. It makes sophisticated pumps that turn seawater into fresh water. But to protect itself against punishing new tariffs imposed by President Donald Trump, it has turned to an obscure program that began 85 years ago — the last time tariffs soared as high as they are today.
Congress passed the Foreign Trade Zone Act of 1934 as an escape hatch to allow companies a safe harbor to bring in goods and warehouse them without tariffs as long as they weren’t meant for domestic consumption. With nearly 300 zones across the U.S, they help manufacturers compete — and preserve jobs — in a global economy where components often cross borders several times before coming together as a finished product.
Read more: https://www.propublica.org/article/foreign-trade-zone-companies-are-using-a-depression-era-law-to-escape-trumps-tariffs-and-its-costing-them
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