New Trade Bill Grants Duty-Free Status for Specific Goods Re-Exported from Foreign-Trade Zones

The aptly named “Foreign-Trade Zone Export Enhancement Act of 2025” is a straightforward piece of legislation designed to give U.S. manufacturing a shot in the arm. Essentially, it’s a targeted tax break aimed at businesses that use Foreign-Trade Zones (FTZs) to process goods before shipping them back into the U.S. market. The bill’s stated purpose is clear: boost U.S. competitiveness in manufacturing and distribution while preserving and creating jobs.

The FTZ Loophole Just Got Official

To understand this, you need a quick primer on FTZs. These are designated areas near ports where foreign goods can land without immediately being subject to U.S. Customs duties. Companies often bring in components, assemble them into a finished product in the FTZ (creating U.S. jobs in the process), and then ship the final product out. If that finished product is later re-imported into the U.S. market, it usually triggers duties. This bill changes that for a very specific type of merchandise.

The core of the Act is Section 3, which mandates duty-free entry for certain articles that are re-imported from an FTZ. Specifically, this applies to goods classified under a highly technical customs code: HTSUS 9801.00.95. The bill makes this duty-free status ironclad by stating it applies “Notwithstanding other procedures,” effectively overriding any existing rules that might typically impose a tariff. This means if a company uses an FTZ to assemble components and then re-imports that specific product, they skip the import tax entirely.

Who Wins and Who Pays

This is great news for any business that relies on FTZs for complex assembly and manufacturing, such as the auto parts industry or certain electronics manufacturers. By eliminating the duty on these specific re-imported goods, the bill lowers the cost of doing business and makes U.S.-based manufacturing operations more cost-competitive globally. For the workers in those FTZs, this is a job security measure, as it incentivizes companies to keep those assembly and distribution jobs here.

However, every tax break has a cost. The federal government collects less revenue because those duties are no longer being paid, which means the U.S. Treasury takes a hit. More importantly, domestic manufacturers who do not rely on FTZs and produce similar goods might feel the squeeze. They will now be competing against a product that has benefited from a duty exemption, potentially making their domestically sourced product relatively more expensive.

The 90-Day Clock for Customs

To ensure this new system rolls out smoothly, Section 4 puts the U.S. Customs and Border Protection (CBP) Commissioner on a tight timeline. CBP must issue the necessary regulations to implement this change within 90 days of the bill becoming law. This fixed deadline is a positive sign for businesses, as it prevents the new rules from getting stuck in bureaucratic quicksand. It means the benefits—and the competitive shifts—will start hitting the market relatively quickly. This is a targeted, technical change that aims to keep specific manufacturing jobs anchored in the U.S., but it’s worth watching which industries benefit most and how domestic competitors adjust to the new, duty-free playing field.