Foreign trade zones (FTZs) in the United States are seeing a dramatic surge in interest in 2025, as businesses look for ways to navigate the latest round of tariffs and supply chain disruptions. Once a specialized tool for a handful of industries, FTZs have become a mainstream strategy for managing tariff exposure, cash flow, and inventory risk. The spike in demand is reshaping how companies approach international trade and is making FTZs a central feature of the current business landscape.
The numbers tell the story: Following the Trump administration’s announcement of sweeping new tariffs in April 2025, interest in FTZs has jumped fourfold, according to logistics providers who help companies set up and manage these zones. Applications for new FTZs are way up, with businesses across the country moving quickly to secure access to these tariff shelters. The Commerce Department and industry experts confirm that FTZs, once considered a niche solution, are now a go-to strategy for U.S. importers in a volatile trade environment.
This surge is not just anecdotal. Companies are accumulating inventory in FTZs at record rates, and the number of formal FTZ applications has spiked. The heightened visibility of FTZs in business media and trade circles is also fueling the trend, as more executives realize the potential benefits for managing both tariffs and supply chain uncertainty.
Foreign trade zones are secure areas, typically located near ports of entry, where companies can import goods without immediately paying customs duties. Goods can be stored, assembled, or manufactured inside these zones, and duties are only paid when the goods leave the FTZ for the U.S. market. If the goods are exported, no duties are paid at all. This gives businesses flexibility in managing inventory, cash flow, and compliance costs.
The FTZ program, created during the Great Depression, is regulated by U.S. Customs and Border Protection and the Foreign-Trade Zones Board. Each zone operates under strict guidelines, but the appeal is clear: FTZs help companies stay competitive and support domestic jobs by reducing the incentive to move operations abroad.
The surge in FTZ use is directly tied to the latest tariffs. With new duties affecting nearly every country and product category, companies are using FTZs to delay or reduce the impact of these costs. Many are importing products into FTZs and holding inventory duty-free until it makes sense to release it for U.S. sale. If market conditions shift or customers balk at higher prices, companies can export goods from the FTZ without ever paying U.S. tariffs.
For example, Audio-Technica imports fully assembled products from Japan and China into its FTZ, deferring tariffs until the goods are sold domestically. About 80 percent of these products are sold in the U.S., while the rest are exported, avoiding U.S. duties entirely. Helly Hansen, an outerwear manufacturer, has also leaned into FTZs, achieving significant savings by deferring and sometimes avoiding duties altogether. The company’s annual savings from FTZ-related efficiencies reached $200,000, and its move to a larger FTZ facility was driven by these benefits.
Automotive manufacturers, electronics firms, and apparel companies are among the biggest users. BMW, Ford, General Motors, and Toyota operate within FTZs to manage global supply chains and reduce costs on imported parts and vehicles. In some cases, companies even certify their entire factories as FTZs, allowing them to import parts duty-free, assemble finished products, and pay lower tariffs on the final goods.
The flexibility of FTZs is especially valuable as tariff rates on some goods, particularly from China, have soared to as high as 145 percent. FTZs give companies a way to “wait out” tariffs, holding inventory until they can pass costs onto customers or until tariff rates change. While recent policy changes have locked in some tariffs at the time of import, FTZs still offer a crucial buffer, allowing companies to manage when and how they pay duties and to export unsold goods without penalty.
FTZs are not just a workaround for tariffs, they also help companies better manage inventory, reduce customs brokerage fees, and improve cash flow. In 2023, nearly $1 trillion worth of goods moved through FTZs, representing almost a third of all U.S. imports that year. The zones support over 500,000 jobs nationwide and have become economic catalysts for many communities. Facilities like BMW’s in South Carolina and Airbus’s in Alabama have transformed their regions into major export hubs.
Foreign trade zones are no longer a quiet backwater of U.S. trade policy. As tariffs and global uncertainty ramp up, FTZs have become a central feature of business strategy for companies looking to stay competitive, manage risk, and keep supply chains moving.
