Big winners in China-US tariff truce: supply chain managers using FTZ's to build stocks, buy time

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Supply chain executives use just-in-time inventory management systems to carefully balance forecasted demand, against the high costs of stocking goods. But the escalation of tariffs between the US and China compelled them to fill all available warehouse space, in the hope that a resolution would be reached before tripling prices at the retail level. Foreign Trade Zones were a valuable tool to this end. FTZ's are scattered throughout the United States, and serve vast areas of the country. Wholesalers can legally import and stockpile product in bonded warehouses in FTZ's, and delay paying tariffs until the goods are withdrawn for sale or use. Supply chain executives took an expensive gamble that the tariffs would come down before their shelves emptied, and even directed Chinese shipments to warehouses in Canada to further build out available stock. With the tariff rates dropping from 145%-plus, to 30%, products can come out of the FTZ facilities and into stores, with sufficient additional stock pending the arrival of new shipments from Asia. Closing scene, Heung Yuen Wai Highway, Tai Po, Hong Kong Resources and links: Chinese-U.S. imports being diverted to Canada amid trade war https://truenorthwire.com/2025/05/chinese-u-s-imports-being-diverted-to-canada-amid-trade-war/ America’s Central Port: Foreign Trade Zone 31 https://www.americascentralport.com/foreign-trade-zone-31 Zerohedge, Chinese-US Imports Being Diverted To Canada Amid Trade War https://www.zerohedge.com/economics/chinese-us-imports-being-diverted-canada-amid-trade-war 2024 Top Free Trade Zones https://siteselection.com/u-s-foreign-trade-zone-activity-in-gulf-states-leads-to-a-record-breaking-year/ Reuters, Big US retailers' 'just-in-time inventory' habit makes a comeback https://www.reuters.com/business/retail-consumer/big-us-retailers-just-in-time-inventory-habit-makes-comeback-2023-08-23/ Wall Street Journal, Retailers Return to Bringing in Inventory ‘Just in Time’ https://www.wsj.com/articles/retailers-return-to-bringing-in-inventory-just-in-time-4613e3ee Plunging LA port volumes spell trouble for truckers https://www.freightwaves.com/news/plunging-la-port-volumes-trouble-truckers The trucking industry hits the brakes with tariffs set to dent imports https://www.nbcnews.com/business/business-news/trucking-industry-hits-brakes-tariffs-set-dent-imports-rcna202444 Chinese freight ship traffic to busiest U.S. ports, Los Angeles, Long Beach, sees steep drop https://www.cnbc.com/2025/04/22/busiest-us-ports-see-big-drop-in-chinese-freight-vessel-traffic.html Wall Street Journal, Pandemic-era shortages may return without trade-war deal with China, businesses warn https://www.wsj.com/wsjplus/dashboard/articles/pandemic-era-shortages-could-return-soon-absent-a-trade-war-truce-with-china-businesses-warn-467013e9 Walmart, Home Depot, Target Push Chinese Suppliers To Resume Shipments, Agree To Absorb Tariffs: Report https://finance.yahoo.com/news/walmart-home-depot-target-push-204214166.html South China Morning Post Exclusive | Walmart has told some Chinese suppliers to resume shipments: sources https://www.scmp.com/economy/china-economy/article/3308290/walmart-has-told-some-chinese-suppliers-resume-shipments-sources An Introduction to Foreign-Trade Zones https://www.cbp.gov/border-security/ports-entry/cargo-security/cargo-control/foreign-trade-zones/about Toyota Production System: Our world-famous lean manufacturing system https://www.toyota-europe.com/about-us/toyota-vision-and-philosophy/toyota-production-system How Toyota's Just-In-Time (JIT) System Revolutionized Manufacturing https://www.ineak.com/how-toyotas-just-in-time-jit-system-revolutionized-manufacturing/ Just-in-Time (JIT) Production and Its Integration with Lean Concepts https://www.qualitygurus.com/just-in-time-jit-production-and-its-integration-with-lean-concepts/ Just in case & Just in time. https://www.linkedin.com/pulse/just-case-time-same-bernardo-butler-iccfc/ New York Times, The Floating Traffic Jam That Freaked Us All Out https://www.nytimes.com/2024/06/02/business/economy/covid-pandemic-global-supply-chains.html Understanding the Supply Chain Bullwhip Effect https://www.truecommerce.com/blog/bullwhip-effect-supply-chain/ Carrying Costs in Inventory Management: A Guide to Reducing the Cost of Inventory in Your Business https://www.eturns.com/resources/blog/carrying-costs-in-inventory-management-a-guide-to-reducing-the-cost-of-inventory-in-your-business/ Free Trade Warehouses, Directory https://www.prologis.com/what-we-do/resources/what-is-a-free-trade-zone-warehouse 90-day tariff cut between U.S. and China may lead to import surge, temporary stability https://www.kiiitv.com/article/money/consumer/tariff-cut-between-us-and-china-may-lead-to-import-surge-temporary-stability/503-55456353-09f8-4123-a4bb-b8d430814bee Trump says US-China relations 'reset' as markets surge on tariff pause https://www.bbc.com/news/live/cedy09wq25qt