By shipping unassembled goods to a free trade zone in an importing country, a marketer can lower costs in a variety of ways. One of these ways is that import taxes are completely skipped by following such a practice.

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By shipping unassembled goods to an FTZ in an importing country, a marketer can lower costs in a variety of ways: Tariffs may be lower because duties are typically assessed at a lower rate for unassembled versus assembled goods. If labor costs are lower in the importing country, substantial savings may be realized in the final product cost. Ocean transportation rates are affected by weight and volume; thus unassembled goods may qualify for lower freight rates. If local content, such as packaging or component parts, can be used in the final assembly, tariffs may be further reduced.

By Shipping Unassembled Goods to a Free Trade Zone in an Importing