The Indicator from Planet Money The secret tariff-free zone
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Jun 11, 2025 Discover the hidden world of bonded warehouses at the Port of Baltimore, where you can store imported goods like Latvian vodka and Dutch beer without paying tariffs—at least for a time! Explore how these facilities allow shippers to manage costs and navigate changing trade policies. Dive into the strategies businesses use to optimize their cash flow and adapt to fluctuating tariffs. It's a fascinating look at the economic scene and how clever entrepreneurs are turning tariffs into opportunities!
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Tariff Limbo in Bonded Warehouses
- Bonded warehouses act as a tariff limbo zone for imported goods near ports.
- Importers pay tariffs only when taking goods out, allowing them to delay payments based on tariff changes.
Warehouse Stockpiling Before Tariffs
- Larry Smith's warehouse in Baltimore was flooded with stock before tariff changes.
- The warehouse stores diverse imports like French wine, Scottish whiskey, Latvian vodka, and Dutch beers.
Choosing Warehouses by Tariff Bets
- Businesses choose between bonded warehouses and foreign trade zones based on tariff trends.
- Foreign trade zones lock in low tariffs; bonded warehouses delay tariff payments hoping for rate drops.