The year’s most famous automotive and car parts show is on right now and, after the 2020 show was canceled, hopes and expectations are high for 2021. Pictures have been pouring in since the weekend of classic collectible cars, modified vehicles, new technology and gadgets, and things that make most grown men act like children. The car mecca that is SEMA never fails to impress it’s patrons and for anyone who has been lucky enough to attend the SEMA show in Las Vegas, it’s an experience that will have you wanting to come back each year.
For most of us, it’s easy to get there. We just hop in our own cars, modified or not, and map our way to Vegas with friends and fun in tow. The SEMA exhibitors and manufacturers that bring their exciting new products into the US have to use a much different path, and for many of them unfortunately, it involves customs border costs, duty fees, tariffs, and taxes.
ITC Diligence has demonstrated by using foreign trade zones for over 2 decades that they understand how to ease this burden for businesses who import and export in the US. A foreign trade zone, or FTZ, is a designated area within the US where companies can set up operations with deferred or exempted custom border costs. These areas offer specific and unique advantages to business owners and the experts at ITC Diligence can help use these advantages for your benefit.
Car parts and automotive manufacturers pay an especially gauging tax on their goods. As the trade war between US and China kicked off, the automotive industry had a big bullseye on their back which means today importing and exporting anything auto related can carry a 20% to 30% tax markup. When a company is looking to showcase their cutting edge tech, sexiest gadgets, and exciting new models, importing fees are probably the last thing they want to think about. It’s not any different when a company is just trying to manage their day to day operations. In our current climate, the ‘boatmaggedon’ that persists off our coasts adds another layer of difficulty to bringing merchandise into the hands of the buyer.
Foreign trade zones give a significant amount of flexibility to importers and exporters, and even put them in the driver seat, granting them time and at times an advantage over many of their competitors. As an example, businesses can import parts of a vehicle, rather than a fully assembled car, into an FTZ and then put the vehicle together in the FTZ, and rather than paying taxes on the entire cost of the vehicle, they pay only on the parts. This strategy can defer and even reduce the amount of overall custom fees that are paid.
This year, ITC Diligence will be at SEMA sharing exactly how these foreign trade zones work, and who they can benefit. Hint; every exhibitor at SEMA can benefit. It will be the mission of ITC Diligence to make sure everyone they meet at SEMA has the opportunity to learn about the benefits of using FTZ’s and how they can help keep their business moving forward, especially during times of political uncertainty.
It’s exciting and relieving to see the SEMA show continue to have life. The automotive industry is changing drastically. Looking toward the future, electric cars will be taking front stage, and the push for renewable energy will continue to drive the car industry in a cleaner and more sustainable direction. This is a positive thing for commerce, for humans, and our whole world, and ITC Diligence will be there providing support to importers and exporters across the planet regardless of political climate, trade war tariffs, or how lifted your truck is.