MANSFIELD — Tariffs have been all over the news these past few weeks.
Barrett Thomas, senior director of economic development for the Richland Area Chamber & Economic Development, said foreign-trade zones can provide benefits to local manufacturers when it comes to tariffs.
Thomas said when manufacturers buy components from other countries and then manufacture their product and sell it in the United States, they delay paying certain tariffs until the product is sold.
“That puts the tariff closer to your revenue, which is easier on the cashflow,” Thomas said Tuesday.
The Richland County Board of Commissioners on Tuesday welcomed representatives from Summit County to discuss the future of the county’s foreign-trade zone — FTZ 181.
FTZ 181 established nearly four decades ago
Richland County, along with eight other Ohio counties, belongs to FTZ 181. It was established around 1990. The Akron-Canton Airport was the original administrator.
What’s a foreign-trade zone?
According to the International Trade Administration…
“A foreign-trade zone is a designated location in the United States where companies can use special customs procedures that help encourage U.S. activity and value added – in competition with foreign alternatives – by allowing delayed or reduced duty payments on foreign merchandise, as well as other savings.”
In 2019, the foreign-trade zone was reorganized, said Marvin Evans, an attorney with the Summit County Executive’s Office.
Richland, Stark and Summit counties essentially entered into an agreement which created a Joint Office of Economic Development.
JOED became known as the grantee of FTZ 181 by the Foreign-Trade Zones Board in Washington, D.C., Evans said. Through an agreement with Richland and Stark counties, Summit County was designated as the administrator of the zone.
A couple of years back, Elizabeth Whiteman became the executive secretary of the Foreign-Trade Zones Board. Evans said Whiteman questioned JOED’s legal authority to be the grantee of FTZ 181.
“I provided to the prosecutor’s office my analysis of various statutes that give a JOED and a county all the authority that they need to be the operator of a foreign-trade zone board,” Evans said. “They were not buying off on it.”
In February 2024, Evans asked the Ohio Attorney General’s Office to give an opinion as to whether or not JOED had authority. That request has not received a response.
Evans said urgency to take action increased last year as several companies were interested in establishing trade zones, but JOED was told no by the Foreign-Trade Zones Board.
“Instead of waiting for the AG opinion, we decided we were going to go transfer it (FTZ 181) over to the DFA (Development Finance Authority of Summit County),” Evans told commissioners.
He said DFA is likely “better suited” to handle the zone than Summit County.
DFA wants to increase partnership with county
According to its website, DFA of Summit County “specializes in community and economic development finance, primarily focused on Northeast Ohio.”
Among Richland, Stark and Summit counties, two of the three must agree to any “major changes,” such as transferring FTZ 181 to DFA. On Tuesday, county commissioners agreed to a memorandum of understanding with DFA in regards to the transfer.
Once two counties agree, the decision will be submitted to the Foreign-Trade Zones Board for approval — at which time JOED will be dissolved following approval, Evans said.
DFA has existed as a port authority for more than 25 years, said Rachel Bridenstine, president of DFA of Summit County.
“We’ve worked in coordination and have the desire certainly with foreign-trade zones to continue our relationship with your county (Richland) and increase that partnership,” Bridenstine told commissioners.