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Oklahoma City is designated as Foreign Trade Zone (FTZ) #106, supporting businesses engaged in international trade. This distinction is gaining attention as businesses face the threat of rising import costs due to international tariffs. To access FTZ benefits, local businesses must apply—a process The Alliance for Economic Development can assist with. Benefits include reduced or eliminated import costs and improved cash flow through delayed tariff payments.
An FTZ is a U.S.-based area considered outside the jurisdiction of U.S. Customs and Border Protection (CBP). In an increasingly uncertain trade environment, FTZs offer a critical economic advantage, particularly amid potential tariffs on goods from Canada and Mexico. Oklahoma City’s FTZ #106 helps businesses stay competitive by reducing or eliminating import duties, improving cash flow, and lowering production costs. Companies can source materials internationally, manufacture products, and distribute them without facing immediate tariff burdens. With a central location and access to major transportation hubs, FTZ #106 enhances supply chain efficiency.
Oklahoma City businesses can gain a major financial advantage by adopting FTZ status, particularly through Duty Deferral, Duty Exemption, and the Inverted Tariff. For businesses relying on imports, these perks are invaluable.
FTZs allow companies to defer import duties until goods enter the U.S. market, improving cash flow and reducing upfront costs. If products are re-exported or sold to another state, businesses avoid duties altogether, creating further savings. The Inverted Tariff structure lets manufacturers pay duty on either imported materials or the finished product—whichever is lower—often reducing or eliminating duties. Since duty rates on components are typically higher, most companies prefer to pay on the finished product.
Common FTZ users include manufacturers, logistics professionals, and businesses importing high-value goods that must carefully manage cash flow. Industries like construction, which depend on Canadian steel or lumber, are particularly vulnerable to potential tariff increases. For builders already grappling with housing shortages, added costs could have a serious impact. Because FTZ applications take several months, Alliance staff recommend starting the process as soon as possible.
These benefits lower production costs, increase profitability, and improve supply chain efficiency. As global trade conditions fluctuate, companies utilizing FTZs can stay competitive, protect against tariffs, and boost economic growth. More Oklahoma City businesses should seize this opportunity to strengthen their bottom line and safeguard against future import challenges.
Kenton Tsoodle is the president of The Alliance for Economic Development of Oklahoma City.
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