With a record number of activated foreign-trade zone sites, the program has been a “lifeline” to Northern Illinois companies
April 13, 2020 (Rockford, IL) – With a record number of activated foreign-trade zone (FTZ) sites in Northern Illinois, the Greater Rockford Airport Authority and Zethmayr LLC submitted the 2019 annual report on behalf of FTZ #176 to the U.S. Department of Commerce, which oversees the national program. While companies that are reliant on international trade consider restructuring their global supply-chains due to tariffs and the COVID-19 pandemic, the foreign-trade zone has become an increasingly important tool allowing companies to control aspects of their tariff payments, providing flexibility and improving cash flow. “The foreign-trade zone has been a lifeline to FTZ operators, allowing them to prepare and plan their cash flow in an ever-changing environment,” described Carrie Zethmayr, administrator of FTZ #176.
There are many ways the foreign-trade zone impacts a company’s bottom line. Some companies use the foreign-trade zone to reduce tariffs through a special authorization which allows them to reclassify their domestic sales as the final product sold, rather than the imported components. In some cases, this allows for a significant reduction of tariff payment. Other FTZ operators benefit by deferring their tariff payments. In an era of 25% increases on tariffs on imports from China, the cash flow benefits can be significant.
Current FTZ operators in the Foreign-Trade Zone #176 service area include:
- Bergstrom, Inc. – Rockford, IL (activated in 2020)
- Brake Parts, Inc. – McHenry, IL
- Cellusuede Products, Inc. – Rockford, IL
- Chicago Importing Company – Huntley, IL
- Energizer Holdings, Inc. – Dixon, IL
- Leading Americas, Inc. – Hampshire, IL (activated in 2020)
- Packaging Coordinators, Inc. – Rockford, IL
- UniCarriers Americas Corporation – Marengo, IL
In addition to strong FTZ activity, exports from the Rockford MSA have grown significantly compared to the national and Illinois averages. According to data available from the International Trade Administration, total exports from the Rockford MSA grew 94% between 2008 – 2018 (most recent published), while nationally exports grew 29% and Illinois exports grew 22%. In the same time period, the Rockford MSA advanced from being the MSA with the 108th highest value of exports to becoming the MSA with the 85th highest value of exports. As FTZ #176 recently surpassed its record number of activated FTZ operators in 2020 and global supply chains continue to be impacted by tariffs, we are confident that the foreign-trade zone will continue to be an important “lifeline” to companies in our service area.
Learn more about the foreign-trade zone program in Northern Illinois at https://ftzrockford.com/, or contact Carrie Zethmayr, FTZ Administrator on behalf of the Greater Rockford Airport Authority at 312-221-1115 or firstname.lastname@example.org.
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