The Globe and Mail reports in its Monday, Nov. 10, edition that Canadian and multinational companies are increasingly turning to federally designated trade regions in the U.S. to navigate American export tariffs. The Globe's Dayne Patterson writes that this strategy can greatly improve their financial health.
About 1,300 companies are currently utilizing U.S. foreign-trade zones, which allow them to lease land or buildings for manufacturing or storage. These zones offer advantages over traditional factories.
One key benefit is that companies can import goods into these zones without paying tariffs or taxes until the products leave. When goods exit, they pay the tariff rate based on the admission time, and exports back outside the country incur no fees. This strategy provides businesses with greater operational flexibility and opportunities for growth. Data from the International Trade Administration show industry giants including Apple, Deere & Co., ExxonMobil and several automakers have spaces within the trade zones. Few companies The Globe contacted responded to queries about whether they used the zones to assist in managing goods from their Canadian operations.
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