Throught Leadership - Foreign Trade Zone Powerful Tools for Global Trade

Foreign Trade Zones are Powerful Tools for Global Trade
Two foreign-trade zones strengthen foreign direct investment, helping global companies lower costs and grow with confidence.

The business of global trade has always required adaptability as operators navigate unpredictable headwinds. As changes to U.S. tariff policy were implemented in 2025, global trade operators sought new ways to adapt and remain profitable. Still, one key tool is anything but new: foreign trade zones (FTZs). First created during the Great Depression via the Foreign-Trade Zones Act of 1934 (the Cincinnati and the NKY region has two FTZs, 46 [Cincinnati] and 47 [Northern Kentucky], were established in 1979), Congress introduced FTZs as a way to revitalize international trade following the Smoot-Hawley Tariff Act of 1930, which had increased tariffs on many imported goods.

And FTZs are providing today's global economy a similar service.

“The biggest benefit that we see is deferred duties,” explains Gina Rittinger, vice president of strategic growth with REDI Cincinnati, which manages the two FTZs alongside Cincinnati/Northern Kentucky International Airport [CVG] under the purview of a board of directors. “Say you and I are running a machine shop. We're importing widgets from South Africa, and we can bring them in, and they can sit in our foreign trade zone duty-free for an indefinite amount of time.

Zimmerman explains that importers can activate a zone under either of these FTZs, always a dedicated secure area within a facility, where imported goods can sit duty-deferred until they’re sold or moved out. If they’re internationally exported straight from the FTZs, no duty is collected. FTZs are a popular tool with a number of major corporations locally, including GE Aerospace, Mitsubishi America and Levi Strauss.

“Today we're getting inquiries from third-party logistics companies who are doing business with various different types of other businesses," explains Angela Cook, business administration program manager at CVG. “I've gotten everything from warehouse distribution centers to a luxury watch facility yesterday. We have companies in the flavor industry and the aerospace industry. What we've added over the last year is just so diverse.”

"Everyone's using it because the tariffs are so enormous. What’s driving interest right now, with the economy the way that it is, is the cash flow benefit of being able to set everything inside of an FTZ tariff-free until it's needed."

FTZs can be a powerful tool in an organization’s toolbox, but there’s a lot of versatility in how they can be used. Jon Borman, vice president of supply chain and logistics at Prasco, explains the company’s FTZ provides them ways to strengthen professional relationships. "A large pharmaceutical company was having one of their drugs produced by a local company,” he explains, "but they were buying the ingredients in large bulk and needed somebody to hold it before the company needed drums to produce a batch of product.” So, they asked, “Would you be interested in becoming a foreign trade zone to assist us?”

"We investigated and found out, yep, we can qualify. We registered all three of our warehouses here in Cincinnati in December of 2024 and have been working with them ever since."

Chris Atkinson is assistant vice president of Trancy Logistics America Corporation. In his experience, the main benefit FTZs provide is the duty-deferred timeframe. "There is no time limit for maintaining a product in the foreign trade zone, so you could have things here for years if you chose to,” he explains. "So, if you bring in product that has not been sold to individual customers yet, you can bring it into the foreign trade zone, and as you're negotiating those sales, then you can distribute it for the quantities that they are purchasing and do it at that point."

Tanna Johnson, a senior manager at Ernst & Young Global Trade who often works to connect importers with FTZ grantees, points out that an FTZ can help organizations by providing additional support to operations. "We're really working to get the word out there and working to help support US-based companies mitigate some of the cost of running their operations,” she says. "It may streamline data flows, or it may correct inefficiencies, but overall, the program itself overlays in the operation to support the business rather than hinder it from its current processes. We also do educational packets and one-pagers explaining the benefits of a foreign trade zone, how it can help your company save duties and taxes that specifically hit margin. It's very industry agnostic, and generally it's customer-specific on the benefits that they see."

The overarching benefit for all importers, though, is clear. “The program itself is designed to promote and create global competitiveness,” says Cook. "The spirit of the program is to promote global trade."

More information about the Greater Cincinnati Foreign Trade Zone (FTZ 46) and Northern Kentucky Foreign Trade Zone (FTZ 47) can be found at gcftz.com.