To say this week has been chaotic is an understatement. As of this writing, the stock market has experienced significant losses, with the Dow Jones Industrial Average dropping over 1,100 points (approximately 2.8%) and the S&P 500 declining by 3.5%. $2.5 trillion dollars in value has been wiped out.
The catalyst for this market turmoil is the recent announcement of sweeping tariffs by the U.S. administration. Effective April 5, a baseline 10% tariff will be imposed on nearly all imports, with higher rates for specific countries—54% for China, 20% for the European Union, and 24% for Japan.
In response, China has announced retaliatory tariffs of 34% on all American imports, effective April 10, further escalating trade tensions.
Amid this uncertainty, businesses are urgently seeking strategies to mitigate the impact of these tariffs. One effective yet underutilized approach is leveraging Foreign Trade Zones (FTZs).
Call to Action: Brokers – It’s Time to Get Smart on Tariffs and FTZs
As commercial brokers, we’re used to tracking interest rates, lease comps, and absorption rates -but this week’s tariff news is a loud wake-up call that we also need to be dialed into global policy and how it shapes our clients’ decisions to expand, relocate, or consolidate.
Understanding Foreign Trade Zones
FTZs are designated areas within the United States where imported goods can be stored, processed, or manufactured without immediate customs duties or import quotas. These zones offer companies the flexibility to defer, reduce, or even eliminate tariffs, depending on their operations and the final destination of their products.
Benefits of Utilizing FTZs
- Duty Deferral and Exemption: Companies can defer paying duties on imported goods until they enter U.S. commerce. If the goods are re-exported, no duties are paid at all.
- Inverted Tariff Benefits: Manufacturers can benefit from lower duty rates on finished products compared to higher rates on component parts.
- Improved Logistics and Reduced Costs: FTZs can lead to streamlined customs procedures, reduced merchandise processing fees, and more efficient inventory management.
Colorado’s Foreign Trade Zones
Colorado is home to several Foreign Trade Zones that businesses can leverage. It is important to understand site activation and subzones if considering leasing in these areas, and the best information can be found through the International Trade Administration.
FTZ #123 – Denver
Grantee: World Trade Center Denver
Service Area: Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert, and Morgan Counties, and portions of Larimer and Weld Counties.
Active Sites:
- Great Western Industrial Park
- Denver International Airport
- Aspen Distribution, Inc.
FTZ #298 – Jefferson County
Grantee: Jefferson County Economic Development Corporation
Service Area: Boulder, Clear Creek, Gilpin, and Jefferson Counties.
Active Sites:
- Hestra Gloves, LLC
FTZ #112 – Colorado Springs
Grantee: Colorado Springs Foreign-Trade Zone, Inc
Service Area: El Paso County
Status: Currently not active
Sites:
- Colorado Centre Industrial and Commercial Community
- Arrowswest Business and Industrial Park
- Interquest Business and Industrial Park
- Colorado Springs Airport
Another Call to Action: Economic Developers – It’s Time to Activate
The writing is on the wall: companies across the U.S. will begin reevaluating supply chains and facility locations in light of this week’s sweeping tariff announcements. For communities hoping to remain competitive – or even attract new investment – economic development agencies must act swiftly and strategically.
Now is the time to prepare inactive Foreign Trade Zone sites for activation.
Many of Colorado’s FTZs, including Colorado Springs’ FTZ #112, currently sit idle – authorized but underutilized. With global trade policies shifting rapidly, these zones represent one of the most powerful tools economic developers have to support local industry, attract reshoring efforts, and insulate communities from economic shocks.
Here’s what needs to happen now:
- Audit and Assess: Review all approved FTZ sites in your jurisdiction. Are they active? Are businesses even aware of them?
- Engage Industry: Begin proactive outreach to manufacturers, importers, and distributors. Understand who is vulnerable to new tariffs and how FTZs can support their operations.
- Coordinate with U.S. Customs and Border Protection (CBP): Partner with your local CBP office to expedite the activation process, remove red tape, and provide guidance to local firms.
- Promote FTZ Benefits: Many business leaders still don’t understand how FTZs work. It’s time for economic developers to become educators and advocates.
- Prepare for Movement: As companies look to relocate or expand in order to mitigate tariff impacts, be ready to showcase FTZ-enabled sites with clear timelines, infrastructure, and workforce support.
Tariffs this week may be the spark—but the long-term strategy is about resilience and readiness. Activating your community’s FTZs may be the key to economic growth and stability in an increasingly protectionist world.
How we can support each other to be successful using FTZ’s:
✅ Start conversations now with manufacturers, distributors, and importers about how tariffs are impacting their business.
✅ Build relationships with local economic development teams and FTZ grantees.
✅ Ask if a site is in or near a Foreign Trade Zone—and if it’s activated.
✅ Advocate for speed. In this climate, delays kill deals. FTZ education and activation must be part of your advisory toolkit.