American companies importing goods from China are now rushing to convert their storage facilities into bonded warehouses to cope with sharply rising tariffs imposed under President Donald Trump’s trade policies. These bonded warehouses allow businesses to delay paying duties—taxes on imported goods—until the products are actually sold and leave the storage facility.
Currently, tariffs on Chinese goods can reach up to 145%, but many shipments face a base rate of 30%. Instead of paying those hefty fees upfront, businesses are finding relief through bonded warehouses where duties are only due upon withdrawal of the goods. This lets companies better manage their cash flow and adapt to the unpredictable nature of the current trade environment.
The U.S. has more than 1,700 bonded warehouses nationwide, but the surge in demand has filled many to capacity. Businesses are turning to the U.S. Customs and Border Protection (CBP) to apply for permission to convert their own spaces into bonded warehouses—a process that used to take just a few months, but is now seeing backlogs of six months or more due to the sudden spike in interest.
Bonded Warehouses Costs and Delays Pile Up
The rush has led to skyrocketing prices. According to logistics research firm WarehouseQuote, the cost of renting bonded storage has risen to four times the rate of standard warehouse space since the beginning of 2025. A year earlier, it was about double. This dramatic increase reflects the intense pressure on businesses trying to shield themselves from fast-changing import rules.
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Chris Huwaldt, vice president at WarehouseQuote, explained that converting a warehouse into a bonded facility can cost anywhere from a few thousand dollars to over $100,000. The final cost depends on the warehouse’s location, the company’s financial status, and any security requirements set by the CBP.
Utah-based LVK Logistics is one of the firms currently in the process of converting a warehouse to bonded status. CEO Maggie Barnett said the move is “in response to the tariffs” and expects the setup to take between three and four months.
S&P Global Market Intelligence’s supply chain lead, Chris Rogers, emphasized that companies with the resources can turn almost any warehouse into a bonded one, though it involves significant time and money. “If you are a big company and expect tariffs are going to remain elevated for an extended period, you can convert (existing) spaces into bonded warehousing,” he said.
Even smaller businesses are trying to adapt. Florida-based CargoNest is considering opening a third bonded warehouse to keep up with demand, but cofounder Vladimir Durshpek voiced caution. With policies constantly shifting, he said, “What we don’t want to do is rush into providing more capacity, and then things change.”
Past Mistakes and Present Pressures
During Trump’s earlier term, many importers simply paid the tariffs and moved on. But this approach proved costly. Companies found themselves stuck paying more over the long term and had to shift supply chains away from China, which also required additional investments.
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Cindy Allen, a shipping consultant at Trade Force Multiplier and former FedEx Logistics executive, said the use of bonded warehouses helps companies avoid repeating those past mistakes. While the warehouses don’t eliminate the need to pay tariffs, they allow payments to be spread out gradually. “It allows companies to pay duties in smaller increments as they are sold,” Allen said.
With the Trump administration’s tariff policy shifting from month to month—raising duties sharply in April before lowering them again—flexibility is crucial. That’s why more companies are treating bonded warehousing as a financial lifeline rather than a long-term fix.
Still, not every firm is diving in. DCL Logistics, based in Fremont, California, has not yet committed to converting any of its storage to bonded space. “It’s unclear if the demand will stay this high,” said Chief Revenue Officer Brian Tu.
Jacob Roseburrough of WarehouseQuote echoed this hesitation. “By the time a lot of warehouses would be able to achieve bonded status right now, these additional tariffs might be gone, and the demand for bonded space might not be there.”
For now, though, the stampede toward bonded warehousing remains intense, driven by rising tariffs, policy unpredictability, and the high cost of inaction.
