US Foreign-Trade Zones Offer Flexibility and Predictability Amid Tariff Uncertainty – Irmen

As manufacturers and importers across the United States grapple with an increasingly complex tariff landscape, the National Association of Foreign-Trade Zones (NAFTZ) says the US Foreign-Trade Zone (FTZ) stands as a strategic tool to manage trade uncertainty amid geopolitical tension.

NAFTZ Director of Advocacy Melissa Irmen, shares insight in an interview with Ndubuisi Micheal Obineme, Managing Editor, The Energy Republic, outlining the competitive advantages of the United States Foreign-Trade Zones, particularly in response to major tariff shifts from the IEEPA authorities and the layered patchwork of Section 301 and Section 232 measures — and what companies can do to protect their supply chains.

Irmen also highlighted how companies are adapting to a rapidly evolving trade environment, with emphasis on the risks and opportunities surrounding the United States–Mexico–Canada Agreement (USMCA), and how any changes to USMCA would impact North American trade flows and FTZ utilization.

Excerpts:

TER: How have recent tariff shifts following the United States Supreme Court’s ruling on IEEPA impacted day-to-day operations for companies operating within US Foreign-Trade Zones?

Irmen: Following the Supreme Court’s ruling and changes tied to IEEPA tariffs, the day-to-day operations for companies operating in U.S. FTZs have not fundamentally eased; the environment is even more complex. Businesses are navigating a patchwork of tariff mechanisms under Section 122 (limited in duration) along with ongoing Section 301 and Section 232 requirements, which have created a layered and evolving environment.

This means more frequent classification reviews, tighter inventory controls, and closer coordination between trade compliance and supply chain teams. For U.S. FTZ users specifically, there has been an increased reliance on the program’s duty deferral offering as companies work to stay in step with ongoing policy shifts.

TER: What immediate adjustments are importers making to manage supply chain uncertainty?

Irmen: Importers are prioritizing flexibility above all else – with some even diversifying sourcing strategies by shifting production to lower-tariff countries where possible, or splitting supply chains across multiple regions to reduce exposure.

Also, companies are reassessing inventory strategies and, in some cases, increasing buffer stock or accelerating shipments in anticipation of policy changes. We’re also seeing greater investment in trade compliance infrastructure and scenario planning as businesses try to anticipate multiple tariff outcomes.

Programs like U.S. FTZs are giving importers more control over when duties are paid – and importantly, allowing them to adapt faster as policies evolve.

TER: How are the Foreign-Trade Zones helping companies maintain competitiveness and make long-term investment decisions compared to firms operating outside the FTZ framework?

Irmen: U.S. Foreign-Trade Zones provide a level of financial and operational flexibility that is difficult to replicate outside the program. The most immediate benefit is duty deferral, which helps companies preserve cash flow in a high-cost environment. The Harbor Maintenance Fee is paid quarterly instead of at the time imports arrive, and the Merchandise Processing Fees are paid at the time goods leave the zone.

Overall, U.S. FTZs allow businesses to better align duty payments with revenue generation, which is important for manufacturers with long production cycles or large capital investments. This can materially improve project feasibility and influence decisions around where to site new facilities or expand operations. Another great benefit is better inventory control/security, which leads to better compliance with U.S. Customs and Border Protection (CBP) requirements.

By contrast, companies operating outside the U.S. FTZ framework often face upfront duty payments and less flexibility, which can put them at a disadvantage when margins are already under pressure from tariffs and supply chain volatility.

Nevertheless, realizing the full benefits of the U.S. FTZ program – particularly for manufacturing and capital equipment – requires planning, timing, and a structured application process.

TER: What are the competitive advantages of using the US Foreign-Trade Zones in today’s geopolitical environment?

Irmen: The real advantage is some level of ‘control’ in an environment defined by uncertainty. Since Liberation Day (April 2025), tariffs have become a structural feature of global trade. U.S. FTZs, however, give companies the ability to manage that reality more effectively.

Whether it’s deferring duties or allowing time to navigate compliance before goods formally enter U.S. commerce, these zones introduce a degree of predictability into otherwise volatile conditions.

TER: Can you elaborate on NAFTZ’s current advocacy work with the US GOVERNMENT regarding tariffs, and what specific changes are you pushing for?

Irmen: NAFTZ is actively engaging with policymakers to ensure that the U.S. FTZ program remains an effective tool for the nation’s competitiveness, particularly as tariff policy continues to evolve. Our advocacy is focused on maintaining and expanding the flexibility that U.S. FTZs provide to manufacturers and importers.

This includes ensuring that new tariff actions fully account for U.S. FTZ procedures – minimizing unintended consequences that could limit the program’s effectiveness and promoting policies that support duty deferral and streamlined compliance processes.

More broadly, we are working to reinforce the role of U.S. FTZs as part of a pro-growth trade strategy that supports domestic investment and supply chain resilience.

TER: Looking ahead to the 2026 USMCA review, what’s the biggest risk and opportunity for U.S. businesses? How would any changes to USMCA impact North American trade flows and FTZ utilization?

Irmen: The 2026 USMCA review presents both risk and opportunity. The risk lies in added uncertainty, particularly if negotiations introduce new rules of origin, compliance burdens, or tariff-related provisions that complicate cross-border supply chains.

However, there’s a real opportunity to modernize the agreement in a way that better reflects today’s manufacturing and trade environment. Strengthening regional supply chains, improving regulatory alignment, and reducing friction at the borders could enhance North America’s overall competitiveness.

From a U.S. FTZ perspective, any increase in trade complexity or cost pressure tends to drive greater utilization of the program. If uncertainty persists, we would expect more companies to look to U.S. FTZs as a way to manage exposure and optimize cash flow within an evolving North American trade framework.

To add some specificity: As one part of the USMCA review process, we’re advocating for changes that would effectively level the playing field for FTZ-based exporters dealing with our North American counterparts (Mexico and Canada), each of which currently has more favourable tariff structures than the U.S. (in transactions involving these three nations).