Among the warehouses that bump up against the Everglades, west of the Florida Turnpike in Miami-Dade County, is a door. And on that door is a sign. On that sign, between two Department of Homeland Security logos in red capital letters, is the word “warning.”
Walk through this door and a visitor is leaving the United States — as far as international trade is concerned.
“You are actually exiting the commerce of the United States,” said Gary Goldfarb, chief strategy officer at Interport, a warehousing, logsitics and distribution company based in Miami. “You're entering a foreign territory is what it really means.”
No passport necessary. And no tariff.
Goldfarb is considered one of the area’s experts on FTZ’s — foreign trade zones. Which can also be called "free tariff zones."
This entire warehouse that sits on the edge of a limestone quarry is considered a foreign trade zone. There were pallets of tools, patio umbrellas and toilets. Yes, toilets stacked more than 10 feet high. Some marked “domestic” to denote they are bound for somewhere in the U.S. Other shelves feature a prominent “FTZ” on display, indicating the merchandise has a ticket for some other country.
These goods have been imported from all over the world, including India, Vietnam and China. If it’s headed to someplace in the U.S., it’s subject to President Donald Trump’s new tariffs. If this warehouse is just a waypoint as it makes its way to another country, no tariff is due, as long as it stays in this specially designated warehouse.
Most of the stuff in this warehouse is bound for countries in the Caribbean, Central and South America, so no American tariff.
“All that you're doing here is you're in foreign territory before you make a determination” about where the ultimate destination is for the goods, Goldfarb noted.
It’s in a kind of commerce limbo as far as U.S. taxes are concerned.
That’s the big benefit of foreign trade zones and some of the reason there are more than a dozen zones in Florida and more than 100 sites within those zones across South Florida.
“Foreign trade zones are a tool,” said Goldfarb. Not just a warehousing tool in the global supply chain, but also a financing tool.
Trump’s tariffs are as high as 145% on some Chinese-made goods. In simple terms, a $100 pair of sneakers made in China owe $145 in additional taxes if they wind up in a U.S. retail store or on the doorstep of an online shopper. That tax can threaten a company’s cash flow because it is due when the merchandise comes into the country, not when it is ultimately sold. Companies may have to pay the tax man before consumers pay them.
“Most of the people that import products never really had high duty,” Goldfarb said, “They don't have the lines of credit to support that business, so they're in trouble.”
Stay, wait and don’t pay
Companies that would be facing enormous increases in their cost of goods destined for the U.S. market due to the Trump tariffs instead can have their stuff sit in a foreign trade zone tax-free before bringing it into the U-S. (The word “into” is in air quotes since a foreign trade zone is not the U.S. for commerce purposes.) Importers can control their costs better by not having to pay tariffs until it leaves the foreign trade zone.
Harry Boden manages a warehouse just off I-95 in Broward County. Planes descend overhead as they land at the Fort Lauderdale-Hollywood International Airport nearby. Boden is the group general manager for Toyota Tsusho America.
A small portion of the warehouse floor is painted lime green. That’s in America. Beyond it are rows and rows of shelves with all sorts of auto parts, from small screws to windshields and bumpers. Between is a small entrance. It’s almost ceremonial-like with the Japanese word “Anzen,” safety. Through that gate is the foreign trade zone.
“There's no taxes that are paid because it's a bonded facility. We can bring parts from different areas of the world. Consolidate them here and ship out. The duties are only the local duties that would be paid in each market,” Boden said.
READ MORE: 'Pain in the butt': How a big Florida furniture importer tackles Trump's new tariffs
If a Toyota car or truck in Aruba, the Bahamas or Jamaica needs a part, it probably came from this warehouse in Fort Lauderdale, but it was likely made somewhere in Asia. It comes to this foreign trade zone, does not pay American taxes, and is shipped out to the Caribbean when it's needed.
“Many of the companies that have established themselves here have that distribution model,” said Jorge Hernandez, business development director with Port Everglades, which is ultimately responsible for this foreign trade zone. “They're bringing their merchandise from all over the world and doing distribution from Broward County.”
Boden called it a “crucial” part of his operation to service Toyota customers in over two dozen countries. “It wouldn't be possible without that designation,” he said.
Pickup truck liners from Argentina were on the shipping dock getting ready to be sent to the Dominican Republic. Imported auto parts are taxed 25% under Trump’s tariff order.
Foreign Trade Zones date back to the time of another trade war. They were created by a law four years after the Smoot-Hawley Tariff Act, which sparked its own trade war in the 1930s.
Upwards of $25 billion worth of merchandise moves through Florida’s foreign trade zones, ranking it fourth among states for exports passing through.
Even booze like French wines or Jamaican rum that is served onboard cruise ships can be brought in, sit in a foreign trade zone near PortMiami or Port Everglades and taken to a ship’s lounge without paying U.S. taxes. Three of the top 15 zones nationwide are in South Florida, according to a 2023 report to Congress.
It’s a ranking helped by South Florida’s geography. And Goldfarb said they give the region’s economy an edge as new tariffs take hold.
“ We have foreign trades and we have all the tools necessary to help our clientele reduce the impact of tariffs as much as possible. Companies are flocking to Miami because Miami is that community that has all of that knowledge,” he said as he swiped his security card, opening the door between the FTZ and his office.
No passport — and no tariffs — needed.
