Sponsors (2)
The bill makes use of FTZ duty exemptions and clarifies customs rules to lower costs and boost competitiveness for firms using FTZs—potentially preserving jobs—but does so at the expense of tariff revenue and by shifting enforcement and resource burdens onto Customs while concentrating benefits among firms able to access FTZs.
Manufacturers, importers, and FTZ operators (including small businesses and government contractors) will pay no duties for qualifying HTSUS 9801.00.95 articles produced/changed in FTZs and face lower input costs, improving competitiveness and potentially lowering consumer prices.
Workers and communities with FTZs (including middle-class families and rural communities) are more likely to retain or gain manufacturing and distribution jobs as FTZ incentives help attract or keep operations.
Customs treatment is clarified by adding a specific HTSUS subheading and a statutory rule, reducing administrative uncertainty for Customs, FTZ operators, and trade participants.
Taxpayers may face higher net costs because duty-free treatment for qualifying FTZ-produced goods will reduce tariff revenue collected by Customs, potentially increasing federal budget shortfalls or shifting costs elsewhere.
Customs and CBP will face increased administrative and enforcement burdens (and possible rushed rulemaking due to the 90‑day deadline) without additional funding, straining agency resources and possibly lowering implementation quality.
Domestic manufacturers that do not use FTZs may face stiffer competition from lower-cost FTZ-produced goods, risking job losses in certain sectors and pressure on domestic producers.
Based on analysis of 4 sections of legislative text.
Authorizes duty-free entry for goods made or changed in U.S. foreign-trade zones that are classifiable under HTSUS 9801.00.95 and requires CBP regulations within 90 days.
Makes certain goods made or substantially changed in U.S. foreign-trade zones eligible to enter U.S. customs territory free of duty when they are classifiable under HTSUS heading 9801.00.95, and requires Customs and Border Protection to issue implementing regulations within 90 days. The change creates an explicit statutory duty-free rule for articles (and their components) manufactured or changed in condition in a foreign-trade zone despite the existing proviso that might otherwise impose duties.
Official title: Clarify provisions of the United States-Mexico-Canada Agreement Implementation Act and the Foreign Trade Zones Act with respect to the appropriate tariff treatment of merchandise in a United States foreign-trade zone, and for other purposes.
Introduced June 16, 2026 by Tim Scott · Last progress June 16, 2026