Foreign Trade Zone Benefits for Importers
How FTZs defer, reduce, or eliminate tariffs for companies importing into the United States
- Foreign Trade Zone Benefits for Importers
- Zone-to-Zone Transfers and Inverted Tariffs
- FTZ Cost-Benefit Analysis
Foreign Trade Zone Benefits for Importers#
Foreign Trade Zones let you store, process, and re-export goods without paying duties until goods enter US commerce. Key benefit: if you re-export 30% of imports, you never pay duty on that 30%. FTZ status can also allow you to choose the lower duty rate between raw materials and finished goods.
Zone-to-Zone Transfers and Inverted Tariffs#
Inverted tariff benefit: if the duty on finished goods is lower than on components, you can manufacture in an FTZ and pay the finished goods rate. Example: components at 12% duty, finished product at 3%. Manufacturing in FTZ saves 9% on every unit. This benefit alone can fund the entire FTZ operation.
Annual FTZ costs: $50-200K for activation, $30-80K ongoing.
FTZ Cost-Benefit Analysis#
Annual FTZ costs: $50-200K for activation, $30-80K ongoing. Benefits: duty deferral (cash flow), duty elimination on re-exports, inverted tariff savings. Break-even: typically $2-5M in annual imports. If you import $10M+ annually with any re-export or manufacturing, an FTZ almost certainly pays for itself.
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- How FTZs defer, reduce, or eliminate tariffs for companies importing into the United States
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How FTZs defer, reduce, or eliminate tariffs for companies importing into the United States
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