US manufacturers operating in foreign-trade zones (FTZs) are lobbying Congress to fix a long-standing cost gap: components imported into an FTZ and used to make finished goods later exported to Mexico or Canada can still face duties, even when the products qualify for USMCA preferential treatment. Competing manufacturers in Mexico and Canada have access to duty-relief programs that can wipe out comparable costs.
Jeff Tafel, president of the National Association of Foreign-Trade Zones (NAFTZ), called the treatment “one of the most significant competitive disadvantages facing U.S. FTZ manufacturers.” The association is backing two bills—the Foreign-Trade Zone Export Enhancement Act of 2025 (H.R. 6792) and its 2026 Senate companion (S. 4793), introduced by Rep. Lance Gooden and Sen. Tim Scott, respectively. The measures would provide duty relief for qualifying merchandise manufactured or altered in an FTZ and subsequently exported to Mexico or Canada.
Tafel said Congress should act without waiting for the USMCA review to conclude. “American manufacturers shouldn’t have to wait for that process to conclude before this longstanding competitive disadvantage is addressed,” he said.
The FTZ program allows companies to defer duties on imported goods until they enter US commerce, and certain exports from FTZs can qualify for duty exemptions. But Tafel noted that some recent tariff actions require imported merchandise to enter FTZs under “privileged foreign” status, limiting traditional duty advantages. Even so, he said FTZs continue to provide value through duty deferral, streamlined customs procedures and inventory management efficiencies.
According to the US Foreign-Trade Zones Board’s 2024 Annual Report to Congress, FTZ operations nationwide received $963.8 billion in merchandise in 2024, up from $948.8 billion in 2023. Exports from FTZ operations totaled $133.5 billion, down from $148.8 billion the previous year. The program supported nearly 543,000 jobs across about 1,300 active operations, including 381 production operations. Texas ranked first nationally in both merchandise received and exports, with Houston, Laredo, El Paso, McAllen and Brownsville among its key trade gateways.
For companies with supply chains on both sides of the US-Mexico border, tariff uncertainty is complicating decisions. Tafel said FTZ operators are hearing from businesses still evaluating sourcing, freight volumes, warehousing needs, transportation patterns and even whether to relocate manufacturing or distribution across the border. But he cautioned that those discussions do not necessarily mean companies have already changed operations.
For Chinese exporters shipping to the US, the direct impact is limited, but worth watching: if US manufacturers shift some production or sourcing to Mexico due to the tariff gap, cross-border trucking and warehousing demand along the US-Mexico border could concentrate further, affecting the flow of ocean and truck freight into the US interior. Shippers using ocean-plus-parcel or ocean-plus-truck services to inland US points may want to factor potential congestion from Mexico cross-border flows into peak-season booking decisions.