NEW YORK, May 1 (Xinhua) -- As steep tariffs on imports throw ports in the Los Angeles-area, western U.S. state of California, into turmoil and chill industrial property leasing, one rare type of building is suddenly in hot demand - bonded warehouses where goods can be stored without paying tariffs until they are removed, reported The Los Angeles Times on Thursday.
Key personnel at bonded warehouses have to undergo background checks and the operator must put up a bond to protect potential government duty revenue. The customs bond typically starts at about 100,000 U.S. dollars.
Tariffs are otherwise assessed as soon as imported products touch American soil and the current 145 percent tariff rate on Chinese goods and the 10 percent across-the-board tariffs that apply to nearly all nations are expected to dramatically reduce imports at the ports of Los Angeles and Long Beach over the next few weeks.
The importers aim to keep their goods in these warehouses for a month or two until the trade conflict is settled, industrial property broker Danny Reume of JLL was quoted as saying. "At worst, the importers expect to take their goods out of the bonded warehouses a little at a time and pay the tariffs as they go, while keeping the rest of their imports away from the tax man," noted the report.
Typically, bonded warehouses are used by importers that bring in goods from one country before bundling them and shipping them to another country without having to pay tariffs. Importers may also perform some limited assembly or other improvements to goods in bonded warehouses.
Unfortunately for importers, only a "tiny" fraction of the roughly 2 billion square feet of industrial property in the region is bonded by U.S. Customs and Border Protection, according to the report. ■
