Kristina Roberts
Many US companies that import goods from China are quickly turning their warehouses into special “bonded” storage spaces. These bonded warehouses allow them to delay paying high tariffs set by former President Donald Trump. The companies hope these tariffs won’t last long, but for now, they need a way to save money while storing their products.
What Are Bonded Warehouses?
Bonded warehouses are special storage facilities where imported goods can be kept without paying customs duties or tariffs right away. Instead, companies only pay these fees when the goods leave the warehouse and enter the US market. This helps businesses manage their cash flow better, especially when trade policies keep changing.
Right now, the US has over 1,700 bonded warehouses. But because of Trump’s tariffs—which can be as high as 30% on Chinese goods—many of these warehouses are full, and prices for storage space have gone up.
Why Are Companies Rushing to Create More Bonded Warehouses?
Many businesses think Trump’s high tariffs might not last forever. By setting up bonded warehouses now, they can avoid paying extra costs immediately. If the tariffs are removed later, they won’t have to pay them at all.
For example, LVK Logistics, a company based in Utah, is working on making one of its warehouses bonded. “We’re doing this in response to the tariffs,” said Maggie Barnett, the CEO of LVK Logistics. She expects the process to take three to four months.
Chris Rogers, an expert from S&P Global Market Intelligence, explained, “You can bond more or less anywhere. It involves money and it takes time, but if you are a big company and expect tariffs are going to remain high for a long time, you can convert regular spaces into bonded warehousing.”
Delays and Costs in Getting Warehouse Approval
The process of getting a warehouse approved as bonded isn’t quick or cheap. Many companies are facing long delays because US Customs and Border Protection (CBP) is dealing with a lot of applications.
Chris Huwaldt from WarehouseQuote, a logistics research firm, said, “Some applications are backlogged by over six months. Last year, this process would have taken just a couple of months.”
The cost of setting up a bonded warehouse also varies. “It could cost thousands of dollars or it could cost six figures,” Huwaldt added. The price depends on where the warehouse is located, the company’s financial situation, and the security measures needed.
Why Bonded Warehouses Are a Smart Move Right Now
Trump’s tariff policies have been unpredictable. In April, tariffs on some Chinese goods went as high as 145% before being lowered again. Because these rules keep changing, bonded warehouses give companies flexibility. They can store goods without paying tariffs right away and decide later when to bring them into the market.
High Demand for Bonded Space
With so many companies trying to avoid tariffs, bonded warehouses are in high demand. Some logistics firms say prices for bonded storage have “skyrocketed.” Businesses that rely on imported goods—like clothing, electronics, and auto parts—are scrambling to find space.
Risks of Relying on Bonded Warehouses
While bonded warehouses help companies save money now, there’s no guarantee tariffs will go away. If Trump’s policies stay in place for years, businesses will still have to pay the fees when they finally move their goods out of storage.
Also, if too many companies try to use bonded warehouses, the government might change the rules to limit them. This could make the strategy less effective in the future.
For now, bonded warehouses are a smart way for US importers to deal with Trump’s tariffs. They help businesses avoid big upfront costs while waiting to see if trade policies change. But the process takes time and money, and there’s no promise that tariffs will disappear soon. Companies must weigh the risks and benefits before making the move.
