US foreign-trade zones (FTZ): defer, reduce or avoid import duties

Foreign-trade zones (FTZs) are sites in the United States licensed by the Foreign-Trade Zones Board where special customs procedures apply. Imported goods can be stored, handled or used in production there, and duties are paid only when the goods enter the US market, or not at all if they are re-exported.

Checked against official sources: 2026-10

At a glance

What they areDesignated sites licensed by the Foreign-Trade Zones (FTZ) Board

FTZ BoardThe Secretary of Commerce and the Secretary of the Treasury

SupervisionCBP handles the day-to-day monitoring of zone activity

Duty deferralCustoms duties and federal excise tax are deferred until goods leave the zone for the US market

Re-exportsNo duties or quota charges on goods re-exported from the zone

Inverted tariffCase by case, duty may be paid at the lower rate of the finished product leaving the zone

Weekly entryZone users can file one weekly entry instead of many, which can save processing fees

Privileged foreign statusRequired for goods subject to antidumping or countervailing duties and some Section 232, 201 and 301 actions

Benefits of a foreign-trade zone

Duty deferral: customs duties and federal excise tax are paid only when goods enter the US market.
No duties or quota charges on goods re-exported from the zone.
Inverted tariff relief: with FTZ Board approval for production, duty can be paid at the lower rate of the finished product.
Processing fee savings with one weekly entry instead of many.
No duties on waste, scrap and rejected or defective parts.

What can be done in a zone

Goods in a zone may be stored, assembled, exhibited, cleaned, manipulated or manufactured; production activity must be specifically authorised by the FTZ Board, and retail trade is prohibited. Goods in a zone are treated as outside US customs territory for formal entry purposes, although foreign merchandise in a zone is within the territory and jurisdiction of the United States. CBP monitors the activity day to day.

Special tariffs and privileged foreign status

Admission in privileged foreign (PF) status fixes the duty on the condition of the goods when they enter the zone, even if they are later transformed. The FTZ Board's regulations require PF status for goods subject to antidumping or countervailing duties, and certain Section 232, 201 and 301 actions have also required it. Inverted tariff relief is therefore not available for those goods, so check the current rules for each tariff before planning around a zone.

Step by step

Check whether your US buyer or logistics provider operates in a foreign-trade zone.
Decide what the zone is for: storage, re-export, processing or production.
For production, confirm that the activity is authorised by the FTZ Board.
Check whether your goods must be admitted in privileged foreign status because of special tariffs.
Plan withdrawals to the US market as weekly entries where possible.
Ship goods to the zone with documents matching the zone admission.

Documents you usually need

Commercial invoice and packing list
Bill of lading or air waybill
Zone admission records
Weekly entry or other entry filings for goods leaving the zone
Export documents for re-exported goods

Common problems and how to avoid them

A buyer wants to re-export part of the goods without paying US duty.

What to do: Goods re-exported from a foreign-trade zone pay no duties or quota charges.

Components carry a higher duty than the finished product.

What to do: Inverted tariff relief may allow duty at the finished product's lower rate, if production is authorised by the FTZ Board.

Goods are subject to antidumping duties.

What to do: They must be admitted in privileged foreign status, so duty is based on their condition when admitted.

Many small withdrawals create high processing fees.

What to do: Zone users can file one weekly entry instead of several.

Sources

About foreign-trade zones International Trade Administration, U.S. Department of Commerce

Rules change often. This note is practical guidance based on the sources above, not legal advice. Confirm current requirements with the authority, your importer or a licensed customs broker before you ship.

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Trade notes

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Common questions

What is a foreign-trade zone?

A site in the United States licensed by the FTZ Board where goods can be stored, handled or processed with duties deferred until they enter the US market.

Who runs foreign-trade zones?

The FTZ Board, made up of the Secretaries of Commerce and the Treasury, licenses them, and CBP monitors zone activity.

Do goods re-exported from an FTZ pay US duty?

No, there are no duties or quota charges on re-exports.

Can a foreign-trade zone reduce duties?

Yes, through inverted tariff relief when production is authorised, and by eliminating duty on waste, scrap and defective parts.

What is privileged foreign status?

A zone status that fixes duty on the goods' condition when admitted; it is required for antidumping or countervailing duty goods and some special tariff actions.

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